Corporate strategic management.docx

Corporate strategic management.docx

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Corporatestrategicmanagement

Corporatestrategicmanagement:

PrescriptiveApproach&EmergentApproach

Introduction

Inthestudyabouttheconceptofcorporatestrategy,Andrews（2003）statedthatthecorporatestrategyisthetoolofdeterminationswhichisusedtodecidedorrevealgoals,purposesorobjectives,andestablishtheprimarypoliciesandplanstoachievethegoals,anddefinetherangeofbusinessinwhichthecompanymightbechallengedbyotherenterprises;meanwhilethetypeofeconomicandhumanorganizationstheyaretrytocontributetheirnatureofeconomicandnoneconomiccontributiontomaketoitsshareholders,employees,customersandcommunities.Theargumentofcorporatestrategicmanagementhasalwaysexisted.Therearetwocontrastingviewshasbeenwidelyaccepted,whichareprescriptiveapproachandtheemergentapproach.Itdependsonthecompany'soverallpurposeandsize.Inthemodernviewofcorporatemanagement,itincludesthespecificlong-termobjectives,commercialvalueaddedanddealwiththevariabilityofthemodernsociety.Theprescriptiveandemergentapproachesaregeneralrecognizedasthebasicstrategicdevelopmenttheories.Bothoftheseapproachesshouldbeadaptedtotheconstantlychangingenvironment,fiercecompetitionandenterpriseglobalization.Thepowerfulexternalpressurescouldpromptthecompaniestoreducecosts,increaseoutputsandconfirmnewchancesfordevelopment.Nowadays,thereasonthatmanyenterprisesareforcedtomakehugeenhancementarenotonlyforthecompetitionandprosperity,butalsoforsurvivingintherealitiesofbusinesscircumstances.

ThePrescriptiveApproach

Theprescriptiveapproachappearsinapointintimeandiscomposedofasetofrules,completelyformulatedandimplementedsufficientpreparation.Provisiononthemethodofstrategicdevelopmentisconsideredasasystematicandcertaintyoftheprocessontheanalysisoftheorganization,itsinternalandexternalcontextofperformancepromotestheformingofseasonableandlong-termproject.

Theprescriptiveapproachfirstlyshouldanalysetheenvironmentofcompetitionandthecompetitiveresourcesoftheorganization.Theresultofthisanalysisofthemainfactorsofstrategypurposeandthemainfactorsofdevelopmentstrategyaredefinedbeforethestrategystarts.Purposecouldbeadaptedasenvironmentalorotherconditionschanges.However,thetargetmustbestillclearlydefined.Thestrategyisaplancreatedbyplanners.Seniormanagementisresponsibletoconfirmtheultimategoalandarrangement,andthenputintopracticebydifferentlevelsoforganization.Theprocessoftheprescriptivestrategyisfirsttodevelopordefineorganization'sobjectives.Then,analyseandinterpretoftheexternalenvironment,whichhasopportunitiesorthreats,andsurroundingtheorganizationandthecapabilitieswithin.Furthermore,itneedstoreconsideroriginalobjective,whichcanbechangediftheenvironmentrequiresit.Moreover,establishstrategicoptions,andchoicetheonemostlikelytoachievethecompany’sobjective.Finally,implementchosenstrategicoption.

Porter’s（2008）builtFiveForcesModelforanalysingindustryandValueChainAnalysis（Porter,1996）areincludedinthetechniquesofthisprocess,inwhichemphasizethesolidfoundationabilityexistencecompetitiveadvantage.Ansoff（2007）pointedoutthatcompanyinafast-paced,competitiveenvironmentwhichalwaysuseamethodicalprocessforstrategicplanningtocontinuetocontrolthemarket.Therational,systematicmethodallowsthecompanytodeveloppredictable.Meanwhile,proactivestrategiescouldhelpthecompanyfindpotentialornewopportunities.Moreessentially,thismethodmakesorganizationofcomplicatedactivitiesbecomepossibleandappliesagreaterlevelofmanagementdiversebusinessunits.Forexample,Tescoisplanningdevelopmentleadedtolong-termobjectivesandobviousbordersforitsUKandinternationalbusiness.Itsuccessfullygotconsistentdevelopmentandachievementinallthesefieldsovertheseyears.Intheplacethatstrategymanagementplanoccupiesaveryimportantproportionintheadvantageofexistingabilityisconsideredtobeasecuritybasisofthecompanywhichshouldidentifyitselfandimproveitsposition,specificallyintheperiodoffastandchaoticopportunity.Forinstance,Motorola’ssuccessisthatithasfoundtheneedsofemergingmarkets,usingitspowerfulelectroniccomponentsbasedtechnologyprogressfromprovideTVandcarradiotelecommunicationservices.Logicmethodmeansthatthisstrategydevelopmentisalwayscogitative;strategyisimplementedaccordingtoplan.However,accordingtotheoutcomebyempiricalstudy,Mintzberg（1994）gotevidencetothecontrary;hepointedthatthereonly10%to30%oftherealisticstrategiesaretheintentionalstrategy.Themainreasonofthissituationmaybesomeunpredictableeventsoccurring,suchasintroducingnewtechnologies,orimplementingnewregulations,willoftenacttodrivethescheduledstrategyfromitstrack.

Theprescriptivemodelalsohasseveralweaknesses,suchascannotmanageuncertaincontext,becausethatprescriptivestrategyassumescompaniescanseeaheadforseveralyearsandalwaysmakefirmplanseventheenvironmentchangingsofast.Inaddition,theprescriptivestrategyplandoesnotconformtoagreementforanyfactorstobeassimilatedintothestrategiesandthisalsocanrestrictthefirm’sflexiblyresponsecapabilityinnowadaysconstantlychangingcircumstance.Thenarrow-mindedwaythatistoestablishareasofbusinessandabilitieswillaffectseriouschangevariationpatternistheplacewherenecessary.Afurthercriticismisthattheprescriptiveapproachfallsshortatcomplementingmodernorganizationcultureswherejuniorstaffscouldbecontainedintheprocessofmakingdecision.Thiskindofdecision-makingprocessisoftenfoundinthefirmwithsmallersize.Bycontrast,itisrarelyappearedinlargeenterprises.Therefore,theorganizationcreativitymaybeinhibitionandemployees’dissensionmayhappen.Finally,theprescriptivestrategyignoresinnovation,becauseittendstoreplicateexistingmarketopportunitiesratherthandeveloptotallynewofferings.

TheEmergentApproach

Duringthespreadofwesternsustainedeconomicgrowthandindividualwealth,theprimarystrategymanagementarticleswerepublished.AuthorslikeAnsoff（1965）startdevelopingenterprisestrategicconcept,itwascontinuinguntilthe70satlastcentury.Theseconceptionswouldformtwocoremethodsofenterprisestrategicmanagementlater.Oneofthemisprescriptivecorporatestrategy.Atthesameperiod,anotherimportantstrategyofcorporatestrategicmanagement–emergentcorporatestrategy–wasalsoproduced.TheexperimentalresearchesofPettigrew（1985）,Johnson（1986）,andMintzberg（1990）haveshownthattheemployee,policyandcultureofanorganisationcouldaffectcorporatestrategicmanagement.Inaddition,theirempiricalstudiesshowthathypothesisstrategyisrationalandlogicalaredefective;itdoesnotconsiderthemanagementdecision-makingofmanagementinreallife.

Anemergentstrategysometimescalledrealizedstrategyisamodedevelopmentactivityovertimeinacompanyinthelackofaparticularmissionandobjectives.Theemergentmodelisanemergingandchangingstrategythatsurvivesbyadaptingastheenvironmentitselfchanges.Mintzberg（1987）statedthatstrategieswouldbedevelopedaccidentallyandslowlyovertime,likethebehaviourofthecompaniestothechangingreality.Ratherthanmeetadeliberatedesign,hethoughtthatevolutionstrategybyalearningprocess,adjustandexperiment.Parallelstrategicimplementationandmanagersinmultipleorganizationlevelimportantinputtotheactualstrategypursuitoforganization.Theemergentstrategicdevelopmentwhenafirmadoptsagroupofbehaviours,withthepassageoftimeintoaconsistentmodelofbehaviour,inspiteofitsintention.Thismodelfocusesonthemotivationoflearninginmodernresearchesthatemphasizeonthevalueofknowledgeasthemainabilityoforganisationalcompetitiveadvantage.Theemergentstrategyreferstoamoreinventiveandsensitivestrategyformulationforunpredictableandcompetitiveenvironmentinmodernsociety.Surprisingly,PrahaladandHamel（1990）figuredoutthatthemostsuccessfulcompaniesintheworld,suchasMicrosoftandIBMdonotbindthemselveswithassignment,objectives,purposesandtheprearrangedplans.

Comparedwiththeprescriptivemethod,whichfocusesonestablishingcreatematchingnatureadvantagesandnewopportunitiestofacechallenges,andemergencysituationcreatesuchintentionallyinthesefactors.Emergentstrategymeansthataunionislearningwhatworksinexercise.Mixedintentionallyandemergencystrategyinsomeextenthelpsanenterprisetomanageitscourse,atthesametimetoencouragethelearningprocess.Therefore,itismoresuitableforinstigatingactivelyorganize,transformanddiversificationchangesorreorganization.Italsohasmoreadvantagesandhelpsreduceresistancechangesitallowstimetobuildsupportstaffs,strategyhasbeguntotakeshape.Inanegativerecord,thereishighriskywhenformulationandimplementationofstrategy,forthereasonthatthedevelopmentwillbecometooslowanddisorderofaprocess.Itmeansthattheimportantchancemaybemissedaboutthismanner.Meanwhile,inconsistentlygoalsfromdifferentorganizationscanpreventstrategicmanagementdevelopment,especiallywhenthereisapowerfulconversionoccurringduringamainstrategicopportunitysuchasmergers.Withoutstrictlyanalyzingandidentifyingtarget,theobjectivewilllackofclarityandtheremaynotbetr