Strategic management focuses on effectiveness and organizational efficiency “making the right decisions” and “using resources wisely”. The large volumes of theoretical work supporting management practice aim to develop optimal performance strategies…
There are numerous techniques and approaches that support strategic decision making, like PEST, SWOT, portfolio matrixes, life cycles, value chain concepts and many others. The most important aspect of these academic tools is to “what extent [these tools] enhance or inhibit creative competitive strategy making in organizations” (Clark, 1997, p. 417).
Some authors argue (Eilon, 1980, cited by Clark, 1997, p. 418) that there is an absence of strong focus on academic tools because they play a secondary role being “the means to an end, not an end in [itself]”. Still, the usage of academic business models should not be underrated, because these promote the development of “strategic thinking in organizations” (Clark, 1997, p. 418). Strategic management tools perform basically a “support role” (Clark, 1997, p. 418) in the strategic management process. This is so, because academic instruments offer useful insights into the benefits of different strategies and suggest a more systematic approach towards strategy implementation. These tools provide information generation, framework for analysis, also coordination and control mechanisms (Clark, 1997, p. 418). Further on, schemes and visualized models have the benefit of presenting ideas, model relationships and help management identify opportunities and convict others about the usefulness of suggested strategies.
2. The use of tools during the different strategic management stages
Academic models are visible throughout the strategic management process, from planning and defining of mission and purpose to crafting different strategies and strategy execution and evaluation (Thompson et al, 1996, p. 3).
Analysis of the business environment is regarded "as a fundamental part of the strategic management planning process" (Pickton, 1998, p. 102), because academic strategists have realized that environmental changes are constant and unavoidable. A research undertaken by Clark (1997) points out that for many companies environmental analysis includes evaluation of remote environment, meaning PEST analysis; and evaluation of the companies' operating environment, meaning competitors, customers, markets, suppliers and stakeholders. PEST and Porter's five forces model are basically similar tools for environmental audit and are ranked in the top set of tasks in UK (Clark, 1997, p. 423). In an increasingly diverse competition, industries are no longer viewed as isolated independent markets. This makes the application of the Porter's model insufficient, because it "tends to be focused on the single industry or strategic business unit", which means that it's much narrower in its scope.
Another largely used academic tool is SWOT analysis, which is regarded as the simplest "easy-to-use technique for getting a quick overview of a firm's strategic situation" (Thompson et al, 1996, p. 92). SWOT is praised for its simplicity and practicality and is widely adopted uncritically (Pickton et al, 1998, p. 101); it underscores the basic principle that strategy must be a good fit between a company's internal capabilities and its external situation. Authors like Farjourn (2002) observe that SWOT is only suitable to a stable and predictable world. Too simplistic adoption of SWOT is reflected by the fact that most academic papers review it as a static strategic framework (Pickton et al, 1998, pp. 102-103); academicians simplify it to a list of factors and fail to conduct further analysis, which limits the usability of the model.
Another tool, the value chain concept is a "primary analytical tool of strategic cost analysis"; it identifies costs and value drivers for primary and ...
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