Session 6.2 Strategic Management Approaches

The constructs of Strategic Planning and Strategic Management are largely artefacts of the evolution of contemporary business enterprise models, developed through the late 20th century. There are many differing approaches to defining Strategic Management, it all depends on where you start and for what purpose you intend to ‘manage strategically’.
“If the practice of strategic management is like a chameleon changing its pattern and colour in response to its environment, then, as with the chameleon, underlying principles are waiting to be discovered if one is prepared to look beneath the surface patterns. Even after its camouflage is stripped away, however, a chameleon remains enigmatic and difficult to describe and understand. So too with strategic management.” (Forster & Brown, 1996)
For all the varying approaches to strategic planning and strategic management, however, there remains one significant area that is clearly common and critical to success:
“One of the most important facets of strategic management is the setting of objectives. To be able to define a problem and the range of possible, sensible solutions, there must be an achievable objective. Solutions to a problem make sense only in so far as they move towards an objective or objectives.” (Forster & Brown, 1996)
However, current thinking with regard to the development of strategic management processes and practices within organisations draws distinctions between the more classical approach to ‘rational’ decision making, based on clearly defined, coherent and mutually consistent objectives and purposes, and the less sharply defined construct of a focused ‘mission’ or goal to which the organisation aspires.
Indeed, an effective strategic management approach must needs address and align both the internal ‘strategic intent’, very often internalised within the company, and its more externally focused sense of ‘strategic mission’.
“Strategic intent is internally focused. It is concerned with identifying the resources, capabilities, and core competencies on which a firm can base its strategic actions. Strategic intent reflects what a firm is capable of doing with its core competencies and the unique ways they can be used to exploit a competitive advantage.
Strategic mission flows from strategic intent. Externally focused, strategic mission is a statement of a firm’s unique purpose and the scope of its operations in product and market terms. A strategic mission provides general descriptions of the products a firm intends to produce and the markets it will serve using its core competencies…… Together, strategic intent and strategic mission yield the insights required to formulate and implement strategies.”
(Hitt, Ireland & Hoskisson, 2005)
The setting of objectives within such a strategic planning and management framework becomes a tool used to achieve measurable advance towards more complex goals within the scope of ‘strategic intent’ but within the overall framework of a sense of ‘strategic mission’. A form of ‘logical incrementalism’ in which strategic decisions and achievement of subsequent enabling objectives leads to substantive changes in existing ‘internalised’ strategies and in turn, change in the external strategic positioning of the organisation.
Such an approach reflects the inevitably turbulent commercial environment that most organisations find themselves operating in. An environment in which continuing technological change can lead to substantive change in market expectations and demands.
Organisations that are in turn impacted on by such changes, typically imposed on them through external pressures often beyond their control, need to have in place enabling strategies or response mechanisms.
Mechanisms that enable them to respond quickly, or indeed to predict such changes, in order not only to be prepared, but to be strategically positioned to take advantage from consequential opportunities.
Indeed, in thinking of the development of forward looking ‘predictive’ strategies, it may be conceded that strategic management has often been associated with the implementation of transformational radical interventions, rather than piecemeal incremental change. For example introducing e-commerce into an organisation.
The actual way in which strategic management is implemented invariably differs with each organisation and often reflects for example the level of maturity and/or level and acceptance of uncertainty and ambiguity that exists within the organisation.
Key aspects within the organisation that may have significant affect on the style and characteristics of local strategic management implementation and practice may include:

technical competence of the organisation,

eg. technologically sophisticated and mature versus – undergoing rapid technological transformation

social conditions

both in terms of social behaviour, social interaction and practice within the organisation and the impact on and image of the organisation in external society

political environment

both in terms of stable or otherwise internal relationships and complexity of relationships with external interest groups and stakeholders

cultural arena

both in terms of the ‘culture’ or ethos of the organisation itself as well as the surrounding cultural environment within which the company operates and competes.
At its simplest level, strategic management is differentiated from tactical or operational management by its inevitable focus on the future of the organisation and through grappling with often ambiguous levels of uncertainty and a capacity to proactively manage exposure to risk and change.

STRATEGIC MANAGEMENT
OPERATIONAL MANAGEMENT

Ambiguous
Routinised

Complex
Simplified

Uncertainty
Continuity

Risk taking
Security conscious

Organisation-wide
Operationally specific

Common strategic focus
Individual task orientation

Predictive
Responsive

Fundamental
Established practice

Long-term implications
Short-term implications

Fig. 6.4 Differentiating characteristics of a Strategic Management Environment
Given that the focus of strategic management is on the organisation as a whole (a classically holistic approach in the language of systems thinking) it is hardly surprising that strategic management theorists should repeatedly emphasise the importance of considering all aspects of an organisation including its structure, internal relationships, processes, products, services and external influences.
A consequential effect of the holistic nature of corporate strategy and related strategic management approaches, is that of providing corporate management with an integrative perspective of the enterprise as a whole. A perspective that takes into account and attempts to integrate, the various discrete and at times widely differing realms of organisational theory and practice impinging on organisational performance.
Understanding the interplay between such realms of theory and practice and their input to overall enterprise performance, provides a backdrop to the development of effective strategic management approaches and the introduction of strategic information technology based systems. (Forster & Brown, 1996)

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Session 6.2 Strategic Management Approaches was first posted on August 31, 2020 at 1:34 pm.
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