Strategic Management Aspects Essay
Avalue chain in an organization is the sequence of activities anorganization has to undertake so as to add value to its products. These activities exist as either primary or support activities.According to Grant(2010),these are the activities that add value to an organization’s finalproducts to make them deliverable to the market. The primaryactivities are those that add value to the product directly. Thismeans that the value they add to the products of a firm can beidentified with the product. Examples include the activities ofdirect production, packaging and other activities of direct labor. Onthe other hand, support activities are those that indirectly addvalue to the product by facilitating its production and delivery. Forinstance, research and development and procurement activities aresupport activities.
TheBalanced Scorecard
Thescorecard concept is a system of strategic planning and managementthat aids in aligning the activities of a firm to its strategy,vision and mission. The balanced scorecard is aimed at monitoring theperformance of an organization against its goals. According toKaplan and Norton (2013), a balancedscorecard is also aimed at improving internal and external process ofan organization towards achieving its goals. Strategic Management Aspects Essay.
Themain advantage of the balanced scorecard is to enhance thecontrolling function of the management by providing a structures wayof evaluating the performance of a firm. In addition, the balancedscorecard helps in the identification of flaws in an organization byevaluating the processes of a firm against the predetermined goals(Kaplan &Norton, 2013).Moreover, the balanced scorecard helps organizations to retain itsfinancial and operational measures as a way of promotingeffectiveness in a firm.
References
Grant,R.M. (2010). ContemporaryStrategy Analysis. 7th ed.New York: John Wiley & Sons
Kaplan,R., & Norton, D.P. (2013). Alignment:Using the Balanced Scorecard to Create Corporate Synergies. Harvard:Harvard Business Press
Strategic management is defined as a process of specifying the objectives of the organization, developing policies and planning to achieve the objectives, and then allocating resources so that plans can be implemented. Strategic management is considered to be the highest level of managerial activity that the Chief Executive Officer of the organization performs and also the executive team. Strategic management normally provides the overall direction of the entire organization. According to Durand, (2006), he describes strategic management as a set of actions and decisions that result to the formulation and implementation of approaches designed to achieve the objectives of the organization. This is a continuous process that is normally involved with the attempt of matching the organization with the changing environment in a manner that is advantageous. Strategic management is extremely critical in the survival of the organization. This paper will focus on discussing different aspects of strategic management and its impact to the survival of the organization. The paper will also discuss the importance of strategic management in home health care.
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Elements of strategic management
Organizations are supposed to select the directions in which it will move towards. Strategic management has three major elements, which include strategic analysis, strategic choice, and strategy implementation.
Strategy analysis
Strategy analysis is usually concerned with understanding the organization’s strategic position. This is an element that is concerned with the changes that are going on in the environment and how the changes are going to affect the activities of the organization. Other factors that are considered in this element are the strength of the resources in the organization, in the context of the changes. Strategic Management Aspects Essay. It also focuses on what the associated groups in the organization aspire to and how the changes affect the present position and the future position of the organization (Durand, 2006). Strategic analysis usually aims at creating a view of the factors that can have an impact on the future and present performance of the organization. When strategic management is performed in the right manner, it helps in selecting the correct strategy.
There are certain factors that should be considered during strategic analysis. The first factor includes the environment. It is hard for organizations to exist without interacting with a complex, political, commercial, economic, social, cultural, and technological environment. The environmental, changes are sometimes complex for certain organizations than others. Therefore, when organizations are faced with the environmental changes, they should have a clear understanding of the impacts so that to be able to formulate a strategic plan. The central importance of strategic analysis is to understand the environmental effects to the organization (Durand, 2006). It is necessary to consider the environmental effects on the business and also the present and expected changes in the environment.
The second factor is the organization resources, which are internal influences. When thinking about the strategic capability of the organization, it is necessary to consider the weaknesses and strengths. The weakness and strengths of organizations can be identified by considering the organization resource areas like its management, physical plant, products, and its financial structure. This aims at forming an observation of the internal influences and restriction on the strategic choice.
The final factor is the prospects of the different stakeholders in that the development of the organizations depends a lot on the expectations of the stakeholders. The assumption and beliefs of the stakeholders greatly constitute them culture of the organization. A lot of influence in decision making concerning the strategy is normally influenced by the organization’s stakeholders and degree of the stakeholder’s impact on the strategy depend on the respective power of every group of stakeholders (Durand, 2006). The beliefs and assumptions of the stakeholders are usually influenced by the resource and environmental implications. The influence that tends to prevail normally depends on the group that has the greatest power. Strategic Management Aspects Essay.It is extremely necessary to understand this as it helps in recognizing why the organization is following a particular strategy.
Consideration of the resources, expectations, environment, and objectives in the political and cultural framework of the organization provide the foundation for strategic analysis in the organization. In order to be able to understand the strategic position that the organization is in, it is essential to examine the extent of the implication and direction of the current strategy and the objectives the organization is following if they are in line with and can manage with the strategic analysis implications.
Strategic choice
Strategic analysis usually creates a foundation for strategic choice. After strategic analysis has been done, it is now ready to make a strategic choice. Strategic choice is normally defined as the practice of selecting the best possible course of action, and it is usually based on the evaluation of the available strategic options. Strategic choice has three parts that include the generation of strategic options, evaluation of the options, and selection of the strategy (Heracleous, 2003). During strategic choice, there may be many strategic options; therefore, it is necessary to ensure that the selected option is the best.
The second part of strategic choice is the evaluation of the strategic options. Examination of the strategic option can be done in the strategic analysis so that to assess their relative merits (Heracleous, 2003). When the organization is deciding on any of the options, it might decide to ask several questions. The first questions that might be considered is the option built upon strengths, one that will take advantage of opportunities, and overcome weaknesses while it is minimizing threats that the business is faced with. By focusing on the following factors, it is referred to as searching for the suitability of the strategy. Strategic Management Aspects Essay.There are several questions that the organizations may consider when it is evaluating the strategic options.
The third part is the selection of the strategy which is the process of selection the options that the organization is going to pursue. Sometimes the selected choice is usually a matter of the management judgment. It is extremely essential to understand that, in the selection process, it cannot always be viewed as a purely logical, objective act. During strategic choice, the selected strategy is normally strongly influenced by the manager’s values and other groups with an interest in the organization (Heracleous, 2003). This at one point reflects the power structure of the organization.
Strategy implementation
This is the third major element of strategic management that is concerned with strategy translation into action. This is the stage where the strategy is translated to action. The implementation of the strategy requires proper deployment of the organization resources, effective change management, careful handling of the possible changes in the structure of the organization, and also careful planning. There are several parts that are involved in strategy implementation. The first part is in planning and allocation of resources. During implementation, it is involved with resource planning that includes the logistic of implementation (Jones, & Hill, 2012). The second part is organization design and structure. During strategy implementation, there are certain changes in organization structure that should be done. It is also likely for the need to arise for adapting the system used in managing the organization (Jones, & Hill, 2012). The third part is the management of the strategic change.
When a strategy is being implemented, it also requires that the strategic change to be managed. Action from the managers is required in the way the change process will be managed and the mechanism that they are going to use. Strategic Management Aspects Essay. The mechanisms that the managers use are concerned with the redesign of the organization, changing daily routines and organization cultural aspects, and the political barriers to change.
The three elements of strategic management are interconnected in that in order for a strategic choice to be selected, there must be an analysis of options so that to determine the strategy that is going to be effective and efficient for the organization. Strategic implementation normally depends on strategic choice. The implementation of a strategy is normally done after different strategies have been considered so that a conclusion is arrived at on the choice that the organization will implement (Jones, & Hill, 2012). This is a choice that will accomplish the expected goal.
Strategic management in survival of organization
Strategic management has emerged as a primary value in helping organizations to successfully operate in complex, dynamic environments. In order for organizations to be competitive in the complex, dynamic environments, the organizations are supposed to be less bureaucratic and should be more flexible. In environments that are stable, competitive strategy involves defining the competitive position and then defending it (Cole, 2003). With strategic management, it allows companies to be more flexible. Organizations are supposed to develop in a strategically flexible way so that they can have the ability of shifting from a dominant strategy to another.
Strategic management is extremely necessary in organizations. When strategic management is employed in the organization, it helps the organization to formulate strategies that it will focus on in the changing environment. There are several factors that need to be considered when formulating strategies. One of the factors is the changing environment. Strategic management helps the survival of the organization because the management is able to formulate strategies in which will result to the success of the organization despite of the various barriers it might experience (Cole, 2003). In a business, environment is ever changing; therefore, there is the need to reflect if the organization will cope with the environmental changes. Because of the changes, it is likely for the strengths of the organization to also change. With strategic management, it helps the organization to consider whether the present strengths will continue to being strengths in different situations.
Strategic management is important because it gives people the opportunity to consider the goals of the stakeholders because the goals help in understanding the behavioral patterns and the impact they will, have in the future and present conditions.Strategic Management Aspects Essay. When all this factors are considered, it helps in developing a business strategy through the employment of strategic management (Cole, 2003). Strategic management is very essential as it is a method for developing, executing, and evaluating the organization strategy.
Strategic management help in the success of the organization which later result to the survival of the organization in the global market. With strategic management, it usually integrates experience and knowledge that has been gained in various functional areas. With strategic management, it helps the organization in understanding and making sense of the complex interaction found in various areas of management. With strategic management, organizations are able to plan ahead. When the organization is planning ahead, it has to make sure that it is planning the way in which it will stay long in the market and also be productive (Sadler, 2003). Strategic management normally gives the organization direction, sense of unity and direction towards the goal of the business. Therefore, strategic management proves to be important in the survival of the organization.
Strategic management usually enables the organization to achieve its goal in a manner that is efficient and effective. It has to consider the mission and vision of the organization. A strategic management process that is improved helps in facilitating the development of more complex management structures which the organization requires for its survival and growth (Sadler, 2003). This helps the organization in articulating, communicating and monitoring the strategy implementation by use of the interlinked system with the long term vision of the organization.
According Jeffs, (2008), formalized strategic management usually result to superior performance of the organization. Several studies have been conducted that indicate that organizations that are able to adopt strategic management have been able to improve their financial performance (Sadler, 2003). This is because, the organization is able to know the strategies that they will use so that they can be able to penetrate through the market and how they can adapt to the changing business environment. Strategic Management Aspects Essay. Strategic management is a powerful tool to the success of the organization whereby the value of its success lies on the executive and the ability of using the strategic management tool to manage the organization effectively.
Strategic importance to home health care
Strategic management is considered to be the collection of the ongoing processes and activities that an organization uses so that to systematically coordinate and align the resources and actions with the vision, mission, and strategy all through the organization. The activities in strategic management usually transform the static plan in the system that provides strategic performance feedback in decision making and enabling the plan to grow and evolve as the requirements and several other circumstances change (Stock 2009).
Home health care is the health care that is provided in the homes of patients by the health care professionals. Home health care is normally provided by personnel who are licensed. With this form of health care, patients are usually provided with care while at their homes. Home health care is of great advantage for many health care organizations and also patients because it aims at making it possible for people to remain in their homes instead of using institutional based nursing care (Naylor 2006). The services that are provided include professional health care services and also life assistance services.
The importance of home health care to health care organizations is that it helps in reducing the cases of avoidable re hospitalization. Most of the cases of patients who go back to hospitals can be avoided. Strategic Management Aspects Essay.This helps in reducing the cost that organizations may incur in admitting the patients (Panzer et al 2008). Home health care is also important because it helps in creating more space for other patients who cannot be treated at their home and must be admitted in the hospitals. In the United States, hospitalizations are found to account for almost two trillion dollars that are spent on health care. However, a large number of the patients who are hospitalized are the ones going back to the hospital even if their cases can be avoided.
Therefore, home health care is a better strategy for ensuring that the issues of over population in the health care organizations are reduced and that the hospitals can be able to provide the needed services to all patients. The use of home health care is a good strategy for saving the medical costs. The strategy for reducing the medical costs has resulted to a reduction in the length of hospital stays and early discharge of most of patients to home care (Panzer et al 2008).
Conclusion
Strategic management is a continuous process which is essential in the success of the organization. Organizations are supposed to make sure that they engage in strategic management because organization success and survival depend on strategic management. The strategic management approach of decision making derives both financial and non financial benefits. In order for organizations to be able to reap the benefit of strategic management, it is necessary for the workers and managers to have a good relationship. Strategic Management Aspects Essay.
Strategic management is a continuous process of formulating, implementing and controlling broad plans that facilitate an organization in achieving the set objectives. It can also refer as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objective. (Bratton, n.d). Strategic management is an ongoing activity and requires an invariable modification among the three traditional poles of a strategic plan including: values of senior management, environment and the resources available. It can also be defined as the set of decisions and actions that determines the long-term performance of an organization.
The strategic management process has five steps; mission and goals, environmental analysis, strategic formulation, strategy implementation and strategy evaluation. The strategic management model starts with top management evaluation of organization’s current position with respect to its set current mission and goals. The Mission reveal what an organization wants to be and whom it wants to serve and how? Mission Statements are essential for effectively establishing objectives and formulating strategies. Goals are the desired ends sought through the actual operating procedures of the organization and typically describe short-term measurable outcome. Strategic management second step is the environmental analysis which consists of two parts internal assessment and external assessment. Strategic formulation is the third step in the strategic management model which involves making strategic choices and making strategies at three different levels corporate, business and functional. Strategic Management Aspects Essay. Strategy Implementation the fourth step which means involving employees and managers in order to execute the formulated strategies. It is referred as the most difficult stage of strategic management process. It requires personal discipline and commitment. The final stage in strategic management process is strategy evaluation in which management analyzes the consequences of implemented strategies and controls it by adopting corrective measures. (Bratton, n.d)
In diversified business organization, strategic management is applied on different levels of hierarchy based on their strategic needs. The hierarchy of strategy can be classified into three levels as: corporate, business and functional. Corporate-level strategy explains what business we are in? It provides the overall strategic direction in diverse areas of an organization that facilitates in smooth running of its different business units. Business-level strategy focuses on effectiveness and efficiency of a business unit. The basic purpose of this strategy is to take decisions that would make a business unit more competitive in the market place and therefore, it is primarily concern with the process of how do we compete?(Bratton, n.d). Porter (1985) (as cited in Bratton, n.d) had introduced a framework for business strategy which is based on three competitive strategies; cost leadership, differentiation and focus. These strategies are worldwide known as Michael Porter’s Generic strategies. Cost leadership strategy emphasize on producing standardized products at a very low per-unit cost for consumers who are price sensitive. Two alternative cost leadership strategies are classified as Type 1 and Type 2. Type 1 can be defined as a low cost strategy that offers products or services to a wide range of customers at a lowest price available in the market. Type 2 can be described as a best value strategy that offers of products and services to a wide range of customer at the best price value on the market. It aims to offer customers a range of products and services at the lowest price available compared to rival’s products with similar attributes. Differentiation is a strategy focused at producing products and services considered unique industry wide and intended for consumers who are relatively price insensitive. Focus strategy emphasize on producing products and services that fulfill the needs of a small group of consumers. Strategic Management Aspects Essay. The two alternative of Focus strategies are categorized as Type3 and Type 4. Type 4 is a low cost focus strategy that offers products or services to a small range (niche group) of customers at the lowest price available on the market. Type 5 is a best value focus strategy that offers products or services to a small range of customers at the best price value available on the market. (David, n.d). Miles and Snow (1984) (as cited in Bratton, n.d), identified four levels of business strategies that are called four modes of strategic orientation: defenders, prospectors, analysers and reactors. Defenders are companies with limited product line and management focus on improving the efficiency of their existing operations. Prospectors are companies having broad product lines that focus on product innovation, creativity and market opportunities. Analysers are companies that operate in at least two different product areas, one stable and one variable. Reactors are companies that lack a consistent strategy structure culture. Rather than defining a strategy that suit to specific environment, they respond to environmental threats and opportunities in ad hoc fashion. Functional level strategy emphasizes on continue improvement of functions within a business units including: research & development, marketing, manufacturing, finance and HR. It has been highlighted with strong emphasize in the several strategic management literature that the synergy among different levels should be present. Therefore, when the strategies at different levels are fully integrated, organization would effectively able to achieve its sets targets.
The term strategic human resource management is coined as a result of significant contribution made by management gurus in the field of HRM. Strategic human resource management has some presence in manpower planning literature. Strategic Management Aspects Essay. Ouchi (1981) and Peter & Waterman (1982) (as cited in Bratton n.d) have identified one of the important sources of competitive advantage that an organization can achieve by managing its people effectively. This new direction in search of competitive advantage has open new dimensions for scholars and finally the research work emphasized heavily on the significance of strategic role of human resource management. Since then the prefix “strategic” has been attached to “human resource management”
(Michael E. Poter, 1996) Competitive strategy is about being different it means consciously choosing a different set of activities to deliver a unique mix of value. Competitive advantage occurs when firm have resource heterogeneity and resources immobility. Firm resource heterogeneity this concept suggests that firms all have the different amount and kind of physical, human and organizational resources and they vary across firms. Firms resource immobility refers that competing firms are enable obtain resources from others.
(Jay Barney, 1991) Sustainable Competitive advantage is a value creating strategy not simultaneously being implemented by any current or potential competitors as well as competitors are unable to duplicate the benefits of these strategies. According to Porter, 1985 (as cited in Ulrich, n.d) competitive advantage can be defined as firm’s ability to generate unique products or services which are valued by users of those products. In search of its sources, executives have come across three traditional means of gaining competitive advantage (economic, strategic & technology capabilities). (Jay Barney 1991) Four attributes that gives potential to firm recourses to achieve sustained competitive advantage are: valuable, rareness, imitability and substitutability. Strategies are valuable when they facilitate an organization to envision of or implement strategies that improve efficiencies and effectiveness and recourses are rare when a value creating strategy not simultaneously implements by large number of other firms, the resources must be imperfectly imitable and it is possible when any firm has one or a combination of three reasons (a) unique historical condition (b) causal ambiguity (c) social complexity, the resources cannot be substituted with another resources by competing firms. (Pankaj Ghemawat, 1986) Sustainable competitive advantage has three categories: size in target market, superior access to resources and restrictions on competitors options. Strategic Management Aspects Essay.
Organizational survival in highly turbulent environment has become the major concern of organizations today. Since last decades, due to the extreme globalization and increased technological influences the business environment has gone through major changes and become the focus of attention. Such changes have emphasized executives to focus on means that help to create and achieve competitive advantage. (Ulrich, n.d). In order to remain competitive and perform effectively in rapidly changing environment, decision-makers need to seek out factors that provide organizations sustainable competitive advantage. (Hussain, n.d).
According to Porter, 1985 (as cited in Ulrich, n.d) competitive advantage can be defined as firm’s ability to generate unique products or services which are valued by users of those products.
In search of its sources, executives have come across three traditional means of gaining competitive advantage (economic, strategic & technology capabilities) (Ulrich & Lake 1991; Ulrich 1997). Reviews on traditional means of gaining competitive advantage highlighted that these traditional means may be necessary but not sufficient. Executives have realized that additional sustained competitive advantage lies in recognizing and creating organizational capabilities through better deployment of human resources. (Schuler & MacMilan, 1984; Ulrich 1986; Ulrich, n.d).
Organizational capability can be defined as firm’s ability to manage people to gain competitive advantage. (Ulrich and Lake, 1991). It focuses on employee commitment and competence. (Ulrich and Lake, 1991). Organization’s human resources is prove to be the key differentiating factor in developing future competiveness when traditional sources of competitive advantage are easily imitated. (Hussain, n.d). Strategic Management Aspects Essay. It is something that is difficult to imitate and hence it creates uniqueness. (Ulrich and Lake, 1991). There are several models to measure organizational capability that include (cited in organizational capability- what does it mean, n.d): Hase and colleagues (2000), Dill and Delahaye (2003).But one the widely used model is EFQM. The model is based on nine criteria: five enablers (leadership, people, policy & strategy, resources and processes) and four results (people result, customer result and society result). When organizational capability has become the source of competitive advantage and HR professionals are the driving force behind it, than there is a need to develop new agenda for both HR practices and HR professionals. (Ulrich, 1997). Ulrich emphasized that HR professional who contribute to CA must become strategic business partner and acquired new set of personal and professional competencies. (Ulrich, n.d).
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The concept of strategic business partnering was introduced by Dave Ulrich in his famous book Human Resource Champions in the mid 1990’s. (CIPD, n.d). Human resource business partner is a new emerging role in organizations today. In this capacity HR professionals are the human resource specialists, involved in strategic planning of organization to improve business performance and develop organizational culture. (Dash et al, n.d) Lawler and Boardreu shared their views on HR as strategic business partner and highlighted that in this new role HR is a member of senior management team and is directly involved in the major business decisions of the organization, including the formation of strategy, the design of the organization and the implementation of the business model.( Lawler and Boardreu, n.d).
It has been observed that, during the past decades HR was solely viewed as administrative support function, involved in processing employee paper work, benefits, maintaining personal files. (Dash et al, n.d).Strategic Management Aspects Essay. Ulrich (as cited in Lawler and Morhman, 2003) has also highlighted the fact that HR function has been viewed an administrative function led by individuals who was primarily responsible to control cost and look after the administrative affairs.
As highlighted by Ulrich, HR is the key to success.( Ulrich, 1997). Several studies have highlighted that HR function has the essence to become a strategic partner and by doing so it would then be a more value-added function. Research by Becker and Huselid (1998) (as cited in Lawler and Morhman, 2003) also identified a relation between HR practices and the performance of an organization. Other studies also highlighted the need and emphasized the fact that due to the increased competition for HR talent, HR must mould itself in strategic business partner role. (Lawler and Morhman, 2003). Ulrich discussed that HR needs to become a strategic business partner. (as cited in Lawler and Morhman, 2003) He has emphasized that the HR function should become strategically proactive, that it needs to go beyond administrative expertise and try to be an expert in three important roles that are strategic business partnership, change management, and employee advocacy. (Ulrich, 1997). Strategic Management Aspects Essay.