Prescriptive & Emergent Strategies - Essay Example

INTRODUCTION Companies in the current corporate world need to develop strategies which comprise series of decisions and plans developed focusing on achieving the company goals and objectives. All forms of organizations require strategic plan to ensure that they achieve the set objectives whether they are small or large. Strategic management is a core aspect of an organization and comprises of various approaches adopted in various companies. Therefore to evaluate a strategic plan of a given company, it is important to acknowledge and explore other available alternatives. It is notable that prescriptive and emergent strategic planning strategies are popular and mostly used in various companies. These two strategies go head to head in much argument and it is important for companies to evaluate their relevance and effectiveness given economic climate that the specific company is operating (Analoui 2003). In the context of the current economic climate the one that will ensure that the organization attain its long-term and short-term objectives shall emerge to being on top. The current economic climate It is notable that the current economic climate in most countries in the world is very much turbulent. This has become a key determinant in regard to strategic planning of most organizations and companies. According to Charles Hill (2009) he asserts that in UK and USA and many other countries it is notable that they are out of economic crisis and recession, there is much fear that the economic situation may return to recession (Hill 2009). The most affected companies are the retail companies which have opened stores in many countries. This economic situation in some countries has gone out of hand leading to these giant companies going under receivership. Much has been blame on these companies not adopting appropriate strategic planning approaches that could have reduced the damage attributed to turbulent economic climate. Despite of this economic climate of crisis and turbulence there is signs that it will stabilize. With no immediate indication of fluctuations and appropriate strategic planning, companies expect to be relieved and their operations return to normality. Companies have adopted varying strategic planning which have been debated much in the context of organizational management (Hill 2009). Prescriptive and emergent strategic planning strategies are the two common approaches and their suitability can be determined by evaluating their effectiveness and relevance in the context of economic climate. Prescriptive Strategic planning Strategic planning in the context of organizations is where companies define their core priority objectives identifying the core elements before they establish the appropriate strategy to adopt or implement. This strategy in challenging and turbulent economic climates emerges as companies set out strategies to counter the consequences arising from this situation. Aforementioned analysis on challenging economic environment is shifted considering it to the compatibility to the company. According to Farhad Analoui (2003) companies through their strategic managers creates a plan on how to achieve the set goals and the employees are delegated to implement within the set controls and supervision (Farhad 2003). Companies achieve this ascribing to the long term approaches so as to sustain themselves in the challenging economic climate. According to Christopher M. McDermott (2002) rational and linear approaches forms the core basis in the adoption of prescriptive strategic planning and management in many companies (McDermott 2002). Company strategic planning in the context of prescriptive approach entails analysis, development and formulation of strategies and finally implementation. The analysis stage in the context of strategic management planning usually begins with a critical investigation and analysis on the current competitive and challenging economic environment that companies ands retail stores are operating. Attributed to the current economic climate, companies face the challenge of determining real and fair reflection on the challenging competitive environment. The effect of this is that more often companies end up creating inappropriate and imbalanced strategic plans. It is notable that it is easily to carry out firm analysis when the economic climate is stable as opposed to when it is turbulent (Hill 2011). Therefore as a company try to determine the suitable strategic plan approach to adopt the underlying prior stages should be carefully implemented. Within the prescriptive management approach and its strategies it is accepted that it is possible to predict the future accurately given the trends of the economic climate and this allows proper planning to be executed (Farhad 2003). This has been argued otherwise by other scholars the in an event where there is unexpected change the whole process of future prediction can be invalid. Countries that retails stores and multinational operate have a high likelihood that unexpected change occurs in during the current economic challenging economical environment. After the company is done with the relevant analysis an agreed purpose is identified which entails the compare core objective (Hill 2009). In retail stores industry is to maximize profits as provided by most prescriptive theorist. Another major objective and organizational goal is to gain competitive advantage in the industry and this applies to competing profit making companies, non-profit organizations and they adopt the underlying prescriptive strategic planning approach. Prescriptive Strategic planning overview According to Sekhar (2009) who had influence in regard to the field of prescriptive strategy provides prescriptive strategy to involve analytical formal processes leading to establishment of set strategies and a suitable corporate plan. From this assertion it can be argued that this provision is narrow as it ignores geographical locale. Hill (2011) provides that in certain cases companies operating in certain countries opt to forego profit maximization focusing other objective such as maintaining good relationships with government bodies. The core major focus of prescriptive planning strategies is to seek market share but this has not been effective because most markets is saturated with competing companies hence seeking to gain and sustaining competitive advantage is the key major area of focus. There are various competitive advantages by companies notably in retail industry and operating in various countries. According to (Stonehouse 2012) this strategic management approach enables organizations to be able to completely have a complete observation overview of the organization (Sekhar 2009). This can be argues to allows the company management team to have a direct contrast and comparison in regard to their predetermined goals and objectives. This approach further facilitates greater control, supervision and monitoring of the company departments, subsidiaries and subsidiaries. The underlying assumption in regard to this approach is that individuals, group of people and the management team have the power and authority to choose from any strategic options (Farhad 2003). Therefore many of the strategies established and developed by this prescriptive process are not fully implemented thus the assumption is flawed. Lesley (2006) in the study of strategic management approaches in turbulent economic climates provides that it is impossible to fully adopt prescriptive strategies in multinational retail stores and companies because of varying economical climate, politics environment and consumer changes in taste and preference. Political changes entailing instability can affect price rise and changes in tax regulations this leads into economic alterations. Consumer variation has become a key major challenge and a subject of concern to address by companies due to its complexity and rigidity. However, consumer changes are the most complicated to address. This therefore necessitates companies to adopt new strategies that are different as prescribed before thus rendering this strategy ineffective (Lesley 2006). It is notable that high profile corporate retail companies such as Blockbusters, HMV, Jessop’s, McDonalds and Comet whose major strategic approach is prescriptive strategy some have succeeded while others have failed. From these cases it can be asserted that despite this strategy being rigid it is important to alter and adapt it to the economic environment if necessary. It can also be argued that although prescriptive strategy emphasizes mostly on strictness and focus, retail stores and companies need to adapt or alter them in order to realize full effectiveness and relevance to challenging economic climate in various markets. Sometimes this alteration process may be lengthy and may render it inappropriate hence companies need to be flexible to adopt other strategies such as emergent. Lesley (2006) summarizes prescriptive strategy adopted as company strategy focuses on foregoing short term benefits and emphasizes on sustainable long term rewards. The major setback in the adoption of this strategy is that those involve in company decision making are not willing follow this strategy because they cannot forego short term benefits easily (LOORBACH 2010). This strategy is popular in most companies taking into consideration the current economic challenging environment because of the underlying risks and uncertainties. These companies do not focus on immediate benefits to speculate profitability in the future considering risks and uncertainties. The prescriptive strategic planning involves strategies that will enable companies to adapt the current challenging economic environment using the available resources. Therefore in the context of the current economic climate, this strategy should be acknowledged. This strategic planning approach is more effective and relevant when the company is aware of its resource availability and capability. In summary this strategy can be adopted by companies considering the current economic climate, to determine the relevancy and effectiveness of prescriptive approach critical analysis of other alternatives should be determined. Emergent Strategy According to Peter (2008) emergent strategic planning is an approach usually develops in organization overtime (Peter 2008). Most of these strategies are incorporated in organizational strategic plan without being outlined in their specific mission, visions, goals and objectives. Peter (2008) suggests that these strategies are realized at the course of its operations since it is not intended (Peter 2008). Therefore it can be argued that this strategy arises from colliding intentions attributed to challenging economic environment which has to be accommodated within the organization strategic strategy. Emergent strategic planning is considered to be a complimentary to a prescriptive strategic planning approach (McDermott 2002). In the past, there has been a debate on the superiority between prescriptive and emergent strategic planning. Emergent strategic management approach is notably contradictory to the prescriptive approach. According to Lynch (2006) asserts that this strategy develops overtime and it is established with no main goal or objective. He further asserts that this strategy develops incrementally and uninterrupted (Lynch 2006). Therefore it can be argued basing on these provisions that with the changing reality in the context of economic climate, this strategic plan cannot be developed in advance contrasted with prescriptive planning. This strategy has its foundation and basis from events that occurs and is not expressly intended. Organization strategic managers formulate these strategies by chance in their companies without any aspect of long term planning. These decisions takes place as day to day decisions are made while they are running the company at their tactical and routine level of management. According to LOORBACH, D. (2010) this is an ever changing strategic respondent to the new and emerging opportunities in a challenging economic climate (LOORBACH 2010). Companies and organizations need to examine their business models to facilitate and accommodate emergent strategies so as to adapt the changing economic business environments. Companies that have successfully adopted these strategies stand a better chance to adapt to unintended changes common in turbulent economic climates than other companies which are inflexible in their business models (McDermott 2002). In comparison of various business models and strategic planning, companies emerging models puts emphasis on adapting and suiting to the current economic environment which is competitive and challenging. It is notable that freelance contracting is an emerging common trend instead of higher employee status previously adopted by most companies. This is an emerging corporate strategy adopted by companies to meet human resource demands (Hill 2009). According to Hill (2011) emergent strategic planning approach in organizations offers a more flexible approach to the overall organizational planning. This is attributed to it creating a more creative and flexible responsive process which is essential in the context of the current turbulent and volatile economic climate. The company ability to alter already set plans should adequately fit the current market and economic situation more than the inflexible rigid prescriptive strategy as stated earlier. This is consistent with Sekhar (2009) provision that it is not possible to acknowledge the development of future explicit goals and objectives within unpredictable challenging economic environment. Therefore, it is argued by scholars that emergent strategic planning giving room for alteration in contrast to setting objectives like those organizations that have adopted prescriptive strategy. Most scholars of strategic management consider emergent strategic planning to be popular because of the uncertainty in nature of the economic climate. In the very nature of the strategy it core basis challenges the principles of prescriptive strategy (LOORBACH 2010). Emergent strategic planning does not revolve on identifying or determining any strategy that enables company objective to be achieved. According to Lynch (2006) emergent strategic planning is characterized with changes and dynamism in which various organizational objectives are involved. This author further asserts that this strategic planning approach has come into force attributed to the general nature of human nature. Emergent strategy has qualified to this because any strategy needs to adapt to the human approaches. Prescriptive strategic planning also acknowledges human to be logical human beings and rational. Emergent Strategy overview Emergent strategy has a minimal level of focus on the ability to predict the economic environment, whereas prescriptive strategy has this aspect embedded in its core founding principles. According to Lynch (2006) provides that emergent strategic planning works well in uncertain times and more risk and challenging market conditions. Emergent strategic planning takes into account roles of people within an organization and what they mean to the overall strategic planning adopted by the company’s strategy. LOORBACH, D. (2010) asserts that strategies are adopted in all the levels and departments of an organization. He further asserts that emergent strategic planning develops from multiple smaller ideas rather than the one central idea. In the context of emergent strategic planning any one in an organization can come up with a strategy. Therefore it can be argued that this strategy is more of trial and error approach and it is difficult to underline a simple process for creating an emergent strategic planning approach. Because of the dynamism it has because difficult to analyze this approach (McDermott 2002). The relevancy and effectiveness of this strategic approach is based on its ability to address the challenging economic climate. This approach is considered advantageous because it is an adaptable approach and flexible. However, disputed may arise on its feasibility attributed to the budget of the company. An extended time perspective is necessary to evaluate and observe how strategic planning evolves in the context of emergent approach. Conclusion It can be concluded that prescriptive strategies are relevant and effective as emergent strategies. It is important for companies to take consideration on the current economic climate and its challenging competitive environment in choosing either of it. It is notable that there are various aspects on both of these strategies that are effective in the current economic climate. Focus should be made to ensure that they are not mutually exclusive. There is possibility for a company to adopt both strategies successfully. The context of the current economic climate has both hindered and boosted the relevancy and effectiveness of both prescriptive strategic planning and emergent strategic planning approaches. References Charles Hill, G. R, 2009, Strategic Management: An Integrated Approach, New York: Cengage Learning. Charles W. L. Hill, G. R, 2011, Essentials of Strategic Management, New York: Cengage Learning. Christopher M. McDermott, G. C, 2002, Managing radical innovation: an overview of emergent strategy issues, Journal of Product Innovation Management , 424–438. Farhad Analoui, A. K, 2003, Strategic Management: In Small and Medium Enterprises, New York: Cengage Learning EMEA. George Stonehouse, B. H, 2012, Business Strategy. London: Routledge. Lesley Partridge, M. S.-H, 2006, Strategic Management, Hertfordshire: Select Knowledge Limited. LOORBACH, D, 2010, Transition Management for Sustainable Development: A Prescriptive, Complexity-Based Governance Framework, International Journal of Policy, Administration and Institutions, 161–183. Lynch, R. L, 2006, Corporate strategy. London: Financial Times Prentice Hall. Peter Murray, D. P, 2008, Contemporary Issues in Management and Organisational Behaviour. New York: Cengage Learning. Sekhar, G. V, 2009, Business Policy And Strategic Management, New Delhi: I. K. International Pvt Ltd. Read More