There are many views in strategic management in this assignment, however I
will concentrate on three: 1. Rational Planning 2. Institutional Theory 3. Chaos
Theory The Rationalist strategy has been heavily based upon military experience
where it’s principles are: 1. Describe, understand and analyse the environment
2. Determine a course of action in the light of the above analysis 3. Carry out
the decided course of action In reality it is more of a common sense principle
used in everyday life for all matter of situations. The Corporate equivalent to
this principle is a SWOT analysis. By using this approach it is intended to make
the company aware of trends in it’s competitive environment, acknowledge and
prepare for a change in it’s environment due to technological and social
advances. A typical company that upholds this startergy would be British
Airways, as their old fashioned structure of business, i.e Mission & Vision
statements and goals. Institutional theory is based upon the idea that strategic
management is not based on the formal process of rationalisation, but rather how
managers experience subtle changes in the environment and react accordingly.
This theory is based upon the argument that rationalist theory is ineffective as
it is impossible to understand the complexity and change in the environment. The
theories of chaos and complexity from science are being increasingly applied to
organisational and social life.
Some of these ideas include - Order leaps out of disorder and the Butterfly
effect, large unpredictable consequences flow from tiny, microscopic events in
systems Chaos leads to its twin science of complexity. Chaotic systems are
complex. That is, you cannot predict or describe their structure. Complexity
theorists argue that managers should allow creativity and efficiency to emerge
naturally within organizations rather than imposing their own solutions on their
employees. They can do this by setting some basic ground rules and then
encouraging interactions or relationships among their employees so that
solutions emerge from the bottom up. Managers can't predict what the solutions
will be. But just as a flock of birds can achieve more than a bird flying solo,
it's likely that the energy and enthusiasm that are unleashed when employees are
working together will yield successful results. One company who use Chaos Theory
is VBT. VBT's products provide cutting edge systems to the life science
community with the most comprehensive line of integrated and automated systems
for DNA research and analysis, protein and peptide characterization and
analysis, carbohydrate analysis, separation and detection, as well as data
research, management, and analysis. Application of excellence in microbial
biotechnology (bacteria, yeasts, fungi), process design, scale-up and operation
(batch, fed-batch, and continuous), and recombinant organisms is combined with a
genuinely entrepreneurial culture and a receptivity towards external
collaboration for business development. In the biotech industry overall,
diversification of revenue line has become the name of the game - building
businesses around such areas as research, manufacturing, contracting, shared
development costs, co-marketing and co-promotion, desktop tools for scientists,
bio-information systems, and, in some cases, actual product sales. VBT have
recognized a need to divide their company into two worlds. The old style
manufacturing world where cost is king and a new style knowledge-based world
where survival itself may be dependent upon new innovation and adaptation. It
actively employs a technique which its executives refer to as flocking. Flocking
is the ability of the organization to recognize good opportunities and to flock
resources around those opportunities. Having the ability to flock is having the
ability to take advantage of opportunity. This is much easier said than done
however. However in such an emerging market there are too many opportunities
chasing too few resources. VBT has two distinct processes to help this along --
first, researchers (and this is a select group at VBT) are free to seek out
their own resources among the company components, and second, VBT has a group
(which they label operations) whose function is to satisfy the bureaucratic
demands of the organization and keep the bureaucrats away from these select
researchers. Conclusion One could say that traditional attitudes to strategic
management do not guarantee organizational success. Traditionally managers have
concentrated on the fit between the company and its environment, on the
allocation of resources among competing investment opportunities and on the
long-term which inherently involves the acceptance of risks.
Though it could be wrong to suggest that the traditional approach has been
incorrect, they advocate a different framework, in which the concept of stretch
supplements the idea of fit, influencing resources is as important as allocating
them, and the long term has as much to do with consistency of effort and purpose
as it does with appetite for risk. One view is that strategic competitiveness is
not so much a matter of social harmony, rational planning or, say, the conflict
between competing products or companies, but rather a matter of mentality.
Corporate strategies that do not recognise the complexities of the present, and
the uncertainties and changes of the future, will certainly be of a rigid
structure and most likely fail. Companies which embrace the strengths of all
strategies incorporated into one amalgamated strategy focusing and analysing on
it’s environment in my opinion will have a better chance of succeeding.
Bibliography
Eadie, Douglas C. 1993. Beyond Strategic Planning: How to Involve Non-profit
Boards in Growth and Change. Washington, D.C.: National Centre for Non-profit
Boards. Of Chaos and Complexity: Managerial Insights From A New Science
Management Decision, Vol. 35, 1997, Number 3 Exploring Corporate Strategy, Fifth
edition 1996, Johnson & Scholes
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