Sustainable Strategic Management Capabilities †MyAssignmenthelp

Question: Discuss about the Sustainable Strategic Management Capabilities. Answer: Introduction Every business has a strategy before its commencement. The success of a business depends upon how well its strategy is. Strategy works as a roadmap for an organization. Without it no organization can survive in this competitive market. Now we come to strategic management, strategic management ensures whether the organization is running as per the strategy. Strategic management refers to a plan which helps an organization to achieve its objectives by efficient utilization of available resources and manpower. Strategic management evaluates the strengths, opportunities, weaknesses and threats of the business to use the strengths and opportunities in this way that it will minimizes the weaknesses and threats of the business. Strategic management is a continuous process which includes internal and external environmental scanning, strategy formulation, strategy implementation, evaluation and control. Strategic management firstly make a plan in accordance with the SWOT of the organization, then it executes the plan and then evaluates the actual results to identify whether the actual results match the desired results and if there is any difference in actual and desired results then changes are required to be made in the strategy. A strategy can be formed at three levels i.e. Business unit level, Corporate level and Functional or Departmental level. Strategic management focuses on analyzing the external environment of an organization because without judging the competition level that an organization is going to face, strategy cannot be formed (Godfrey, 2015). In other words, strategic management is known as the mission of an organization. Mission refers to how the organization will achieve its vision or objectives or goals. Strategic management makes sure that the management of the business goes hand in hand with the internal and external forces. Current Standard Linear Approach Under this approach, the managers focus on creation of an effective business strategy and on its proper execution. This approach focuses on making a strategy in such a way that it will lead to achievement of organizational goals. This approach analyses the goal and stresses on making a strategy with all possible ways of achieving that particular goal. In fact, the Linear approach refers to step by step process in which when the first stage completes then only the organization can start working on another stage i.e. the output of first stage is the raw material of second stage. Linear approach is an organized approach (Linear Approach, 2017). The strategy made through this approach is totally in an arranged manner. So because of the organized manner this approach guarantees success to the business. The major shortcoming of this approach is that if there is a delay in the first process then it will delay the whole project because the other stages are dependent on the outcome of first stage. Another disadvantage is that it is very time consuming because if there is any fault in the output of any process them it will also influence the other processes because all the processes are inter-related.and it will not allow the employees to give their opinions. Bridoux and Stoelhorst (2014) observed that stakeholder approach to strategic management emphasizes on importance of making investments in improving relationship of organization with its key stakeholders. According to this approach, the stability of relationship with stakeholders can be achieved through organizations compliance to core principles of values. Stakeholders are the people that exist within the organization and outside the organization. In support of this De Brucker et al. (2013) said that without stakeholders, the existence of a business is impossible. Stakeholders include shareholders, creditors, government, community, customers, suppliers, employees, directors and managers. As per the analysis of stakeholder approach to strategic management, the stakeholder relationship is a readymade component in business; rather it is created by organizational efforts. Shareholders are the people that takes the shares of the company, Creditors provides loan to the company, government passes rules and regulations for the ethical running of the company, community is the place where the company exists, customers are the people that purchases the companys products, suppliers provides the raw material to the company, employees are the workers of the company, directors and managers are the persons who will take care of the whole management of the company. Bur Freeman (2010) pointed out that the only difference is that directors are at top level and managers are at middle level. In this way these all are very important for any company or organization for its survival. Stakeholders are those, who are affected by or can affect the organization. There are two types of stakeholders i.e. one is primary stakeholders that includes those who are connected to the organization officially and the other are secondary stakeholders which are connected with the organization through the society. So every organization is having a corporate social responsibility towards its secondary stakeholders because the organization is taking the natural and human resources from the society so it is the responsibility of every organization to return these resources in the form of manufactured products according to the desires of the consumers keeping in mind that such products are not harmful for the consumers (Carroll and Shabana, 2010). The four types of corporate social responsibility are economic, legal, ethical and philanthropic responsibilities. Economic responsibility means the company should try to become a good corporate citizen and for this the company must be profitable. For example: If a company faces losses then it will terminate the empl oyees firstly. Legal responsibilities includes that the company should have to follow the policies and procedures given by the laws. Ethical responsibility is the third responsibility of an organization because any organization can think of this responsibility only if it has met the economic and legal responsibilities. Examples of ethical responsibility are: paying fair wages to workers, not harming the environment, not using the natural resources that are banned etc. Pino, et al. (2016) have articulated and observed that Philanthropic responsibility includes doing something better for the society. For example, giving goods to the society at free of cost, doing charity, etc. Philanthropic social responsibility is only adopted by an organization which is highly profitable because such organization can think of donating money and products to the society. This philanthropic responsibility is only done by companies that are having higher profit margins. Example of stakeholder theory: Every automobile company is required to focus on consumer safety. There is a case of Toyota, where the company was hiding the brake pedal fault instead of releasing it. The U.S. agencies put fine of $16 million on Toyota for not releasing the fault then the interested stakeholders made an effort to deal with this problem. Dynamic Capabilities As per the findings of Lin and Wu (2014), the framework of dynamic capabilities in strategic management can help in wealth creation in an organization. It helps the organizations to identify the sources and methods of wealth creation and guides to adopt rapid technological changes for maximization of its wealth. A dynamic capability refers to the ability of an organization to adapt the environmental changes from time to time or to adapt an organizations resource base. Dynamic capabilities include controlling the factors of external and internal environment that affects the business. On the other hand, Peteraf et al. (2013) have commented that the dynamic capability framework suggests that the wealth creation in private sector is highly influenced by companys ability to stay competitive in the market. The competitiveness can be measured in terms of uniqueness of company products, brand image, technological competency etc. Second example is of smart phones where the smart phones compan ies are adding new technological features to their products like Apple launched the censored home button in iphone 7 and vivo is focusing on the camera. In the views of Cordes-Berszinn (2013), the dynamic capability framework emphasizes on three aspects such as the process, the position and the paths. The processes are the routines, pattern of practices and learning. At the same time, position can be measured in the aspects of technology level, IP, customer base, complementary assets and the external relations. At the same time, the paths are the strategic alternatives that can help organization to improve its current business and competitive market position. Companies should focus on resource based perspective while looking to improve their competency level for achieving the competitive business position in market. Sustainable Approach According to De Brucker et al. (2013), the sustainable approach to strategic management directs or guides the management of companies to consider the interest of each stakeholders of company including nature or environment, because sustainability is the key to success. While making strategy, the main focus is to make a strategy that will guarantee sustainability to an organization. Sustainability refers to long-term survival of a business to maintain competitive advantage. Similar to this, Witek-Crabb, (2011) has argued that if an organizations vision is high profits then it will only be possible through sustainability. Sustainability can be affected by three things i.e. the environment in which the organization exists, resources that organization needs presently and in future and whether the organization is beneficial to the economy. Sustainability leads to competitive advantage to an organization. Adobe is an example of company that has adopted the sustainable business practices. T his company aimed to reduce carbon emission by 75% by end of 2015. It emphasized on key practices of usage of renewable energy technologies, virtualization of many of its systems, improving cooling efficiency, usage of hydrogen fuel cells, solar energy equipments etc. The involvement of company in such as practices improves the public image of company. Competitive advantage occurs when a company continuously gives excellent performance over other companies in the same industry. For example, Wal-Mart is a latest example of sustainable competitive advantage. The strategies and detailed distribution channel of Wal-Mart makes it different from its competitors because it is providing goods to the consumers at a lower price than its competitors (Stead, 2014). However, if the company fails to fulfill its responsibility towards environment or society in sustainable manner, then it can invite negative consequences. For example, Coca Cola has faced the legal action in December 2003 due to negative effects of operations on availability of drinking water in a village of Kerala, where company operates its beverage operations (BHRRC, 2017). Such kinds of lawsuits can impose huge legal fines that are harmful for its profitability position. The purpose of this approach is to help you to understand in detail about strategic management. These are th e findings of the report: Viability of Approaches Stakeholders approach avoids the conflicts between different departments of employees of the organization. Stakeholders approach results in the performance measurement of the organization. Boutilier (2011) has asserted that stakeholder approach makes healthy relationships between the organization and the stakeholders. Stakeholders help in managing the risks and to overcome the threats of the organization. Through stakeholders approach, an organization is valuing the opinions of the people working within the organization which motivates the employees and they will contribute towards achieving the goal. Those organizations who are adopting dynamic capabilities approach believe in innovation. Wheelen and Hunger (2010) have indicated that Dynamic capabilities results in valuable, rare, inimitable and non- substitutable business. It helps the organization to create value by altering their resource base. Sustainable approach contributes to effectiveness and efficiency which are the core co mpetencies of every business. Through Sustainability, organizations are able to maintain competitive advantage. High sustainable companies value their employees. In this way, these three approaches help the business to succeed and grow. The major benefit of strategic management is that it helps the organization to identify its opportunities. Strategic management helps the organization to analyze the cost- benefit relationship. Those firma which are using strategic management are more beneficial than firms that are not using strategic management in their operations (Cordes-Berszinn, 2013). Another benefit of strategic management is that it helps in developing team building skills among the employees of the organization. Strategic management helps the organization to take decisions at the time of sudden crises. Strategic management also clears the confusion from the minds of employees regarding their duties. Implementation Issues Implementation is the action plan of strategic management process so it requires full attention. The success and failure of strategy can be judged after this phase. This is the practical version of strategic planning done so far. In this phase, we have to put the plan on paper in action. 90% of firms fail to implement their strategic plans. This is the most important phase so many issues are also related to this phase. The first issue is putting right people to right place because for this the manager needs to identify the skills and potential of each employee. The major issue is the unpredictable future (Godfrey, 2015). Because strategy is made on hypothesis and no one knows what changes can happen in the future. So if any sudden changes occur them it leads to failure of the strategy. These sudden changes includes Technological changes, increase in the cost of raw material, changes in government rules and regulations, conflict among the stakeholders, etc. One more issue is the incre ase in budget if the desired results do not match the actual results then the strategy needs to be revised. Conclusion No doubt strategic management is full of advantages to an organization but there are also some limitations of strategic management. The major limitation of strategic management is it is a very complex process because it involves analysis of critical components like internal and external environment, structure of the organization, economic crises, etc (Cordes-Berszinn, 2013). The factors of external and internal environment are inter-related to each other. So if there are changes in one factor then it will automatically affect the other. For example: if there are economic crises then it in that case the company needs to reduce the number of employees so in this case economic crises is a external factor and the reduction of number of employees is a internal factor (Carroll and Shabana, 2010). In this way the external factor affected the organizations internal factor and the increased employee turnover rate will automatically reduces the productivity of the organization. The next limita tion is that the Strategic management process is very time consuming because it includes five major stages. First is analysis the organizations SWOT, second stage is strategy formulation, third stage is strategy implementation, fourth stage is strategy evaluation and the fifth stage is controlling. References Boutilier, R. (2011) A Stakeholder Approach to Issues Management. USA: Business Expert Press. Carroll, A.B. and Shabana, K.M. (2010) The business case for corporate social responsibility: A review of concepts, research and practice, International journal of management reviews, 12(1), pp. 85-105. Cordes-Berszinn, P. (2013) Dynamic Capabilities: How Organizational Structures Affect Knowledge Processes. USA: Palgrave Macmillan. Freeman, E. (2010) Strategic Management: A Stakeholder Approach. UK: Cambridge University Press. Godfrey, Richard. (2015) Strategic Management: A Critical Introduction. UK: Routledge. Hill, Charles W. L. Schilling, Melissa A. Jones, Gareth R. (2016) Strategic Management: Theory: An Integrated Approach. USA: Cengage Learning. 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