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Friday, March 25, 2011

Organisational Culture and Strategic Management

This is in continuation to our blog on Strategic Management Perspectives. One of the perspectives of strategy is that organization culture could have lot of impact on whether company’s strategy would be achieved or not. In simple words, organizational culture is the way a particular organization does things. Organization culture is the software of an organization that decides what kind of behavior is awarded and what is punished, what are the rules and operative procedures and what kind of management structure company follows. Schein (1984) has defined organizational culture as “the pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid and therefore to be taught to new members as the correct way to perceive, think and feel in relation to those problems” (Schein, 1984). According to Graves (1986), it is the glue that hold organization together.

Culture and strategy are both social processes and many strategists argue that culture and strategy are interlinked. If a particular strategy, planned by strategist does not match with the organization culture than it could be almost impossible to achieve intended outcome from the planned strategy. There is no best culture and there is no best strategy. Fit between strategy and culture has to be very dynamic and continuously evolving.

There is a relation between resource based view of strategy and seeing organizational culture as strategy. According to resource based view, organizational competitive advantage is rooted in its capabilities and resources. Organization culture could be a great resource for company and could help company easily achieve its strategies and developing itself as a strategic capability.
It could be argued that organization culture could be definitely help or hinder in achieving a particular strategy however issue with organization culture is that can it be really influenced or modified as desired by the management and developed it as strategic capability. Organizational culture can be studies with several models such as 7S, Cultural Web by Johnson and Scholes, Handy’s (1985) typology, Schien’s three levels of culture.

A strategist shall pay a careful attention to fit between organization culture and strategy. However a particular organization culture should not justify inertia and shall be used to achieve organization goals.

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Monday, March 14, 2011

What is Logical Incrementalism with definition in Strategic Management?

Quinn (1978) studied strategic management process of a range of companies and found that strategies of most of the companies do not come to existence by following a long term plan or merely a positioning approach or follow just environment led or resource based approach. Quinn (1978) coined the term ‘Logical Incrementalism’ to explain how the strategies of companies come in existence in real world.

Logical Incrementalism approach towards strategic management is that strategies are not formed and come in existence as some long term plans which are made once a while and then whole organization starts working on them. Rather strategies emerge over time in an incremental way. However, this incremental way is not random but logical as top managers make changes and take strategic decision as they learn by implementing small steps of strategies. There is constant critical evaluation of all the decisions that are taken to come to a realized strategy for businesses.

Strategies are made over a period of time and strategists formulate strategies by searching, experimenting, learning and not being tied to any one course of action. Process of strategic management is scattered, small steps and unstructured approach. Realized strategies of companies, according to Quinn (1978) are partly random and partly logical.

This approach helps companies to reduce risk in strategic decisions though managers may focus more on taking short term decisions. Companies also take investment decisions more prudently for strategic decision as they learn from their past decisions. Managers are expected to take decisions proactively as they come in terms with results of internal decisions and change in environment. In this approach towards developing strategies, managers are continuously negotiating with stakeholders to make a consensus for strategic decisions and a ‘muddling through’ approach in a logical manner is followed.

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Wednesday, March 9, 2011

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Monday, March 7, 2011

Critical Evaluation Market Based and Resource Based View of Strategy

In our previous posts, we discussed about strategy market based and research based view of strategy. Basically, Market based strategic view concerns the position of a company in the industry and emphasizes over the strategy of the company by strongly focusing over the environment in which company operates. In market based view of strategy is based over the external factors (Baier, 2008). On the other hand, resources based view concerns the capability of a company’s resources and internal factor for the purpose of maximum utilization. The strategies based over the resource views generally based over the internal factors. This blog will critically evaluate the Market based and Resource based view of strategy.

Critical Evaluation of Market based View

According to Poser (2003), market based view of strategy helps the organizations to identify and select competitive dimensions and promote the management to meet the appropriate winners. In the market based view of strategy, the main focus of strategy is to gain attractive position in the industry. Market based view is helpful in selecting the product market combination in which a company uses its strategy. With the help of market based view, a company analyzes the industry structure and according to the structure it creates its structure and strategy for effective positioning in the industry. For making effective and suitable strategy, company uses external resources in market based view that is quite effective to analyze the impact of external environment over the business operations (Poser, 2003). Market based view of strategy is also helpful in expansion plan for company and for this purpose, it considers political factors, customers, market condition, technology, social etc. factors for making strategy.


At the same time, the market based view of strategy also has some limitations. According to Poser (2003), market based view is a time consuming and costly process that may affect the decision making effectiveness of the businesses. This process takes lot of time in industry analysis. Market based view concern only external factors rather than internal factor of the company in order to explain competitive advantage that also limits the success of a business over external factors only. Market based view identify only competitive advantage that are based on the positioning advantage d doesn’t consider other areas that are also equally important.

Critical Evaluation of Resources based View

According to Connor (2002), resources based view is an important, essential and an inside-out management concept that is useful in developing successful strategy. Resources based view strategy identifies and emphasizes on the important of resources in achieving competitive advantage. It concerns the capability and effectiveness of internal resources. Both tangible and intangible resources are included in resources based view. The resources based view of strategy also creates a frame work for the executives to think about their strength and weakness, understand marketing issue that helps to improve corporate performance (Falkenreck, 2010).. This strategies based over this view are also helpful in understand the nature of internal resources ad their optimal utilization.

Resources based view suggests that a company should use the internal resources for gaining market advantages (Poser, 2003). Resources based view is a long term view and it satisfies the key characteristics of the strategy. Effective resources based view requires external environment knowledge for the purpose of effective resource utilization. Resources based view is also helpful in formulating mission statement and the company goal as different companies have different type of resources and can get market opportunity through its effective utilization.

Resources based view has a lot of advantage but at the same time, it also has a lot of loops and limitation. Resources based view of strategy concern only internal factors and on the basis of internal resources it determined the key characteristic of the resources. In resources based view, company determines the value of resources based on the characteristics of product markets (Priem, & Butler, 2001). It concern only individual company resources and explain how to exploit the resources, while the resource of competitors and changes in environment are also essential to determine the competitive advantages (Falkenreck, 2010). Thus, the resource based view is also not beneficial for a business individually. To increase the effectiveness of decision making, an organization should use combined views of strategy will be beneficial.

If you need further explanations about these concepts of strategy or any other management assignment help, please do visit our website www.assignmenthelpexpets.com or write us to info@assignmenthelpexperts.com or call us 001-877-839-9989

References
Baier, C. (2008). The Alignment Performance Link in Purchasing and Supply Management. Germany: Gabler Verlag.
Connor, T. (2002).The resource-based view of strategy and its value to practising managers. strategic change,11 (2002), 307-316.
Falkenreck, C. (2010). Reputation Transfer to Enter New B-to-B Markets: Measuring and Modelling Approaches. New York: Springer.
Priem, R. L. & Butler, J. E.(2001). Is the Resource-Based "View" a Useful Perspective for Strategic Management Research? .The Academy of Management Review, 26 (1), 22-40.
Poser,T. B.(2003). The Impact of Corporate Venture Capital: Potentials of Competitive Advantages for the Investing Company. Germany: DUV.

Wednesday, March 2, 2011

What is Resource Based View in Strategic Management?

Almost all business management courses have a module that includes study of strategic management. Our homework helps experts have expertise in the field of strategic management. There are different perspectives and approaches to field of strategic management. This blog post would discuss in detail what resource based view of strategic management is.

This perspective stresses and based on the perspective that resources of the company whether tangible or intangible like brand name, assets, cash, customer loyalty, research and development capabilities are an important and main aspect while forming or pursuing a unique strategic position for a company. This concept of strategic management rather than being driven by the environment is internally resource driven and in this perspective of strategic management the organization is viewed as a collection of capabilities and competences. Organizations leverage new actives from its existing core competencies.

According to Barney (1991) analysis of the impact of a firm’s environment on its competitive position is based on two assumptions. First, firms within an industry or a strategic group are identical in terms of strategic relevant sources they control and the strategies they pursue and second, these models assume that should resources heterogeneity develop in an industry or group will be very short lived because the resources that firms use to implement their strategies are highly mobile i.e. they can be bought or sold in factor markets (Barney, 1991).

Resource based view assumes that companies within an industry or group may be heterogeneous with respect to the strategic resources they control and these are not perfectly mobile, thus heterogeneity can be long lasting (Barney, 1991). Simply, it is suggested that firm resources may be heterogeneous and immobile.

According to Daft (1983), "firm resources include all assets, capabilities, organisational processes, firm attributes, information, knowledge, etc. controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness". According to Barney (1991), firm resources that hold the potential for sustained competitive advantage must have four attributes which are valuable, rare, In-imitable, and non-substitutable.

So in resource based view of the firm, strategy of the firm is basically dependent on firms’ resources. This view again as the market based view is focus on some important aspects but at the same time ignores some other basic aspects of strategy formulation for a company. So resource based view of the firm is also not a balanced view.

We hope that this blog post is useful for the students and practitioners of the field of strategic management. Please email us to info@assignmenthelpexperts.com if you need any strategic management help regarding the module of strategic management.