Strategic Administration Approaches

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Strategic Administration approaches

Strategic administration approaches

There are different explanations for the formation of strategies, so it could hardly be affirmed that there is a single interpretation that is applied in an organization, rather, it should be understood that the formation of strategies is carried out through a combination of processes that take place inthe strategic planning task;that is, in the three stages and its feedback. (Hernandez, 2014)

According to Gerry Johnson and Keven Scholes, there are seven most important approaches in the process of strategic administration:

  1. Natural selection approach: an organization has a better or worse performance than another and respond in different ways to the variations that occur in organizational processes, structures and systems. Organizations that have a better performance can be able to retain, duplicate or reproduce these positive variations, and thus improve their position related to other organizations.
  2. Planning approach: It is the most traditional way of understanding how anticipated decisions are made in organizations. The elements that include are the purpose of objectives, the analysis of the environment and the resources.
  3. Incremental logical approach: from the end of the fifties it was suggested that it was not realisticpredetermined and precisely defined. It was concluded that the management process could be better described as a logical increase;That is, managers have the vision of where they want to go in the coming years, but try to move towards said position in an evolutionary way.
  4. Cultural approach: It consists of the application of the accumulated directive experience over many years. Managers do not work in isolation, but interact with others. His experience is not based only on individual experience, but is based on the organizational and group experience accumulated over time. It suggests that the organizational experience is more likely to be based on reference frameworks on what has been seated and contributed by a managers or group of managers. This group could be, for example, a management function such as the financial one, an association such as counters, an entire industrial sector, or even a general culture.
  5. Political approach: It is considered that powerful individuals and groups exercise influence on the identification of the key aspects and even in the strategies finally selected. It would be wrong to assume that these arise in a politically neutral environment. A political vision of early decision making would suggest that strategies arise through dribbling, negotiation and exchange of political interests.
  6. VISIONAL APPROACH: The visionary strategic direction is related to executives that have intuitive, especially high abilities;Executives that naturally are oriented to the identification of new possibilities, new schemes and ideas, rather than the detailed search for causes and effects or in detail of the day -to -day management. They are likely to see what other managers do not see, that they adopt new forms of work and, perhaps sometimes, that neglect practical implications. It also looks like the training of managers to represent more than planning the future of the organization. It can be affirmed that some market environments are so turbulent that it is useless to try to predict, predict or plan how they will be.

 

The strategic administration process is composed of eight steps that cover strategic planning, its implementation or implementation and evaluation. Although the first six steps describe the planning that must be given, their implementation and evaluation are equally important. Even the best strategies can fail if management does not perform or evaluate them in due manner. (Management 2.0, 2012)

Identification of the current mission of the organization, its objectives and strategies

Each organization needs a mission that defines its purpose and answers the question: what is our reason for being in business? Defining the mission of the organization forces management to identify the scope of its products or services with all care. These statements provide keys to what is the reason for being of these organizations. When a company fails to define its purpose and the scope of that purpose, the results can be disastrous. Determining the purpose or reason for a business is as important for non -profit organizations as it is for lucrative.

It is also important that management identifies the objectives and strategies currently used. The objectives are the basis of planning. The objectives of a company provide the measurable performance goals that workers seek to achieve. Know the current objectives of the company gives managers the basis to decide whether these objectives need to change or not. For the same reasons, it is important that managers identify the strategies that are currently used.

External environment analysis

Analyzing the environment is a determining step in the strategic process, since the environment of an organization defines, to a greater degree, the options available for management. A successful strategy will be one that fits well to the environment.

Managers of each organization need to analyze their environment. They have to know, for example, what the competition does, that legislation could affect the organization and what is the availability of labor in the localities where it operates.

This step will be complete when management has an exact control of what happens in its environment and is aware of the important trends that could affect its operations.

Identification of opportunities and threats

After analyzing the environment, management needs. Opportunities are external factors of the positive environment while threats are negative.

Keep in mind that the same environment can present opportunities for an organization in the same industry and represent threats for another due to its different resources administration.

Organization resources analysis

After observing the exterior of the organization, let’s see its interior. This consists in evaluating, for example, the skills and abilities that the employees of the organization have;What is the company’s cash flow;how consumers perceive the organization and quality of their products or services, etc.

This step forces management to recognize that each organization, regardless of their size or power, is somehow restricted by the resources and skills available.

Identification of strengths and weaknesses

The analysis of the previous point must lead to a clear evaluation of the internal resources of the organization.  You must also point out the organization’s abilities to perform different functional activities. Any activity that the organization does well or any resource available are known as strengths. Weaknesses are activities that the organization does not do well or resources it needs but does not have. If any of these organizational capabilities or resources are exceptional or unique, they are called distinctive competition of the organization. Management can use these unique capabilities to determine the competitive weapons of the organization.

Understanding the culture of the organization and its strengths and weaknesses is vital for management in this step, and often ignored. Specifically, managers must be aware that strong and weak cultures have different effects on the strategy, and that the content of a culture has an important effect on the strategy chosen. Cultures differ in the degree to which they encourage to assume risks, exploit innovation and reward performance. Since strategic elections include these factors, cultural values influence management preference for certain strategies.

Formulation of strategies

It is necessary to establish strategies for corporate, business and functional levels. The formulation of these strategies comes after the decision -making process. Specifically, management needs to develop and evaluate strategic options, then select strategies that are compatible at each level and allow the organization to better capitalize its strengths and opportunities of the environment.

This step is completed when management has developed a series of strategies that will give the organization a competitive advantage. That is, management will also seek to position the organization so that it can gain a relative advantage over its rivals. This requires a careful evaluation of competitive forces that dictate the rules of competition within the organization’s industry. Successful managers will choose strategies that give their organization the most favorable competitive advantage;Then they will try to hold that advantage over time.

Implementation of strategies

The penultimate step in the strategic administration process is the implementation. A strategy is only as good as its implementation. Regardless of how effective a company has planned its strategies, it will not be able to succeed if the strategies are not implemented as it is due.

It is likely that management needs to recruit, select, train, discipline, transfer, promote and even the possibility of having to fire employees to meet the strategic objectives of the organization. Also, since more and more organizations use work teams or the ability to generate and manage effective teams is an important part of the strategy implementation.

The leadership of senior management is a necessary ingredient for a successful strategy. So is a group of motivated managers of medium and low level that develop the specific plans of the General Directorate.

Evaluation of results

The final step in the strategic administration process is the evaluation of results. It consists in evaluating how effective our strategies have been, and examining what adjustments are necessary.

BIBLIOGRAPHY

  • David, f. R. (2013). Strategic Administration Concepts. Mexico: Pearson Education.
  • Management 2.0. (January 17, 2012). Obtained from https: // igestion20.com/el-process-de-administration-strategic/
  • Hernandez, Z. T. (2014). STRATEGIC MANAGEMENT. Mexico: Editorial Group Patria, S.A. Of c.V. Obtained from https: // elibro.net/es/ereader/libraryueb/39403?fs_q = administration__strategic __ & pre = fs

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