CORPORATE STRATEGY

STRATEGY

A Strategy is a long term plan of action designed to achieve a particular goal, most often "winning." Strategy is differentiated from tactics or immediate actions with resources at hand by its nature of being extensively premeditated, and often practically rehearsed. Strategies are used to make the problem easier to understand and solve.

Strategy is about choice, which affects outcomes. Organizations can often survive -- indeed do well -- for periods of time in conditions of relative stability, low environmental turbulence and little competition for resources. Virtually none of these conditions prevail in the modern world for great lengths of time for any organization or sector, public or private. Hence, the rationale for strategic management. The nature of the strategy adopted and implemented emerges from a combination of the structure of the organization (loosely coupled or tightly coupled), the type of resources available and the nature of the coupling it has with environment and the strategic objective being pursued.^[1] Strategy is adaptable by nature rather than rigid set of instructions. In some situations it takes the nature of emergent strategy. The simplest explanation of this is the analogy of a sports scenario. If a football team were to organize a plan in which the ball is passed in a particular sequence between specifically positioned players, their success is dependent on each of those players both being present at the exact location, and remembering exactly when, from whom and to whom the ball is to be passed; moreover that no interruption to the sequence occurs. By comparison, if the team were to simplify this plan to a strategy where the ball is passed in the pattern alone, between any of the team, and at any area on the field, then their vulnerability to variables is greatly reduced, and the opportunity to operate in that manner occurs far more often. This manner is a strategy.

In the field of business administration it is possible mention to the "strategic consistency." According to Arieu (2007), "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context."

Planning

Planning in organizations and public policy is both the organizational process of creating and maintaining a plan; and the psychological process of thinking about the activities required to create a desired future on some scale. As such, it is a fundamental property of intelligent behavior. This thought process is essential to the creation and refinement of a plan, or integration of it with other plans, that is, it combines forecasting of developments with the preparation of scenarios of how to react to them.

The term is also used to describe the formal procedures used in such an endeavor, such as the creation of documents diagrams, or meetings to discuss the important issues to be addressed, the objectives to be met, and the strategy to be followed. Beyond this, planning has a different meaning depending on the political or economic context in which it is used.

Two attitudes to planning need to be held in tension: on the one hand we need to be prepared for what may lie ahead, which may mean contingencies and flexible processes. On the other hand, our future is shaped by consequences of our own planning and actions.

"Take hold of the future or the future will take hold of you." Patrick Dixon, author of Futurewise

MISSION STATEMENT

A mission statement is a brief statement of the purpose of a company

Companies sometimes use their mission statement as an advertising slogan, but the intention of a mission statement is to keep members and users aware of the organization's purpose. In the case of public commercial companies, the primary purpose must always be to uphold the interests of shareholders, whatever the mission statement..

Structure of a mission statement

The following elements can be included in a mission statement. Their sequence can be different. It is important, however, that some elements supporting the accomplishment of the mission be present and not just the mission as a "wish" or dream.

Purpose and values of the organization

(products or services, market) or who are the organization's primary "clients" (stakeholders)

What are the responsibilities of the organization towards these "clients"
What are the main objectives supporting the company in accomplishing its mission

A mission statement explains the company's core purpose and values.

Stakeholder conflict resolution

The mission statement can be used to resolve differences between business stakeholders. Stakeholders include: employees including managers and executives, stockholders, board of directors, customers, suppliers, distributors, creditors, governments (local, state, federal, etc.), unions, competitors, NGO's, and the general public. Stakeholders affect and are affected by the organization's strategies. According to Vern McGinis, a mission should:

Define what the company is

Define what the company aspires to be

Limited to exclude some ventures

Broad enough to allow for creative growth

Distinguish the company from all others

Serve as framework to evaluate current activities

Stated clearly so that it is understood by all

Mission statements and vision statements

Organizations sometimes summarize goals and objectives into a mission statement and/or a vision statement:

While the existence of a shared mission is extremely useful, many strategy specialists question the requirement for a written mission statement. However, there are many models of strategic planning that start with mission statements, so it is useful to examine them here.

A Mission statement tells you the fundamental purpose of the organization. It concentrates on the present. It defines the customer and the critical processes. It informs you of the desired level of performance.

A Vision statement outlines what the organization wants to be. It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria.

Many people mistake vision statement for mission statement. The Vision describes a future identity while the Mission serves as an ongoing and time-independent guide. The Mission describes why it is important to achieve the Vision. A Mission statement defines the purpose or broader goal for being in existence or in the business and can remain the same for decades if crafted well. A Vision statement is more specific in terms of both the future state and the time frame. Vision describes what will be achieved if the organization is successful.

A mission statement can resemble a vision statement in a few companies, but that can be a grave mistake. It can confuse people. The vision statement can galvanize the people to achieve defined objectives, even if they are stretch objectives, provided the vision is SMART (Specific, Measurable, Achievable, Relevant and Timebound). A mission statement provides a path to realize the vision in line with its values. These statements have a direct bearing on the bottom line and success of the organization.

Which comes first? The mission statement or the vision statement? That depends. If you have a new start up business, new program or plan to re engineer your current services, then the vision will guide the mission statement and the rest of the strategic plan. If you have an established business where the mission is established, then many times, the mission guides the vision statement and the rest of the strategic plan. Either way, you need to know your fundamental purpose - the mission, your current situation in terms of internal resources and capbalities (strengths and/or weaknesses) and external conditions (opportunities and/or threats), and where you want to go - the vision for the future. It's important that you keep the end or desired result in sight from the start.^{[citation needed]}

Features of an effective vision statement include:

Clarity and lack of ambiguity
Vivid and clear picture
Description of a bright future
Memorable and engaging wording
Realistic aspirations
Alignment with organizational values and culture

To become really effective, an organizational vision statement must (the theory states) become assimilated into the organization's culture. Leaders have the responsibility of communicating the vision regularly, creating narratives that illustrate the vision, acting as role-models by embodying the vision, creating short-term objectives compatible with the vision, and encouraging others to craft their own personal vision compatible with the organization's overall vision.

STRATEGIC PLANNING

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors.

Organizational structure

An organizational structure is a mostly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim.

Organizations are a number of clustered entities. The structure of an organization is usually set up in one of a variety of styles, dependent on their objectives and ambience. The structure of an organization will determine the modes in which it shall operate and will perform.

Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities. Ordinary description of such entities is as branch, site, department, work groups and single people. Contracting of individuals in an organizational structure normally is under timely limited work contracts or work orders or under timely unlimited employment contracts or program orders.

Operational organizations and Informal organizations

The set organizational structure may not coincide with facts, evolving in operational action. Such divergence decreases performance, when growing. E.g. a ‘’wrong’’ organizational structure may hamper cooperation and thus hinder the completion of orders in due time and within limits of resources and budgets. Organizational structures shall be adaptive to process requirements, aiming to optimize the ratio of effort and input to output. An effective organizational structure shall facilitate working relationships between various entities in the organization and may improve the working efficiency within the organizational units. Organization shall retain a set order and control to enable monitoring the processes. Organization shall support command for coping with a mix of orders and a change of conditions while performing work. Organization shall allow for application of individual skills to enable high flexibility and apply creativity. When a business expands, the chain of command will lengthen and the spans of control will widen. When an organization comes to age, the flexibility will decrease and the creativity will fatigue. Therefore organizational structures shall be altered from time to time to enable recovery. If such alteration is prevented by internal or external forces, the final escape is to turn down the organization to prepare for a re-launch in an entirely new set up.

- By Mary Chong - RCC

Success factors

Common success criteria for organizational structures are:

Decentralized reporting
Flat hierarchy^{[citation needed]}
High transient speed
High transparency
Low residual mass
Permanent monitoring
Rapid response
Shared reliability

etc.

History

Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures.

Organizational Structure Types

Pre-bureaucratic structures

Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks. The structure is totally centralized. The strategic leader makes all key decisions and most communication is done by one on one conversations. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development.

They are usually based on traditional domination or charismatic domination in the sense of Max Weber's tripartite classification of authority.

Bureaucratic structures

Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations. They usually adopt a tall structure. Then tension between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalker's (1961) distinction between mechanistic and organic structures.

Post-Bureaucratic

The term of post bureaucratic is used in two senses in the organizational literature: one generic and one much more specific (see Grey & Garsten, 2001). In the generic sense the term post bureaucratic is often used to describe a range of ideas developed since the 1980s that specifically contrast themselves with Weber's ideal type Bureaucracy. This may include Total Quality Management, Culture Management and the Matrix Organization amongst others. None of these however has left behind the core tenets of Bureaucracy. Hierarchies still exist, authority is still Weber's rational, legal type, and the organisation is still rule bound. Heckshcer, arguing along these lines, describes them as cleaned up bureaucracies (Hecksher & Donellson, 1994), rather than a fundamental shift away from bureaucracy. Gideon Kunda, in his classic study of culture management at 'Tech' argued that 'the essence of bureaucratic control - the formalisation, codification and enforcement of rules and regulations - does not change in principle.....it shifts focus from organizational structure to the organization's culture'.

Another smaller group of theorists have developed the theory of the Post-Bureaucratic Organization. Heckscher and Donnellson [1994], provide a detailed discussion which attempts to describe an organization that is fundamentally not bureaucratic. Charles Heckscher has developed an ideal type Post-Bureaucratic Organization in which decisions are based on dialogue and consensus rather than authority and command, the organisation is a network rather than a hierarchy, open at the boundaries (in direct contrast to culture management); there is an emphasis on meta-decision making rules rather than decision making rules. This sort of horizontal decision making by consensus model is often used in Housing cooperatives, other Cooperatives and when running a non-profit or Community organization. It is used in order to encourage participation and help to empower people who normally experience Oppression in groups.

Still other theorists are developing a resurgence of interest in Complexity Theory and Organizations, and have focused on how simple structures can be used to engender organizational adaptations. For instance, Miner and colleagues (2000) studied how simple structures could be used to generate improvisational outcomes in product development. Their study makes links to simple structures and improviseal learning. Other scholars such as Jan Rivkin, Kathleen Eisenhardt Nicolaj Sigglekow, and Nelson Repenning revive an older interest in how structure and strategy relate in dynamic environments.

Functional Structures

The functional structure groups employees together based upon the functions of specific jobs within the organization. For example, a division of an internet service provider (ISP) with a functional organizational structure might be as follows:

Vice President

- Sales Department (sales function)

- Customer Service Department (customer service function)

- Engineering Department (engineering function)

- Accounting Department (accounting function)

- Administration Department (administration function)

Matrix Structure

Matrix structure groups employees by both function and product. This structure can combine the best of both separate structures. An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. Matrix structure is the most complex of the different organizational structures.

•Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.

•Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional mangers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing power is delicate proposition.

•Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed.

Note: There is no good or bad Matrix.

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