Strategy Planning of a Business Process - Essay Example

Introduction: Strategy can be conceptualized as a guide through whom an organization moves from one to another The second is a desired state in the future. It is not just a template by which decisions in daily life are made but a tool that is used to chalk out future plans and the course of action to be under taken to implement those plans. A strategy gives a company the opportunity through which it can align itself and be able to exploit its potential to the maxim. While doing so, the environment and other factors are continuously accounted for and changes apportioned to the strategy accordingly. In other words strategy defines where an organization is, where it heading to and how is it going to reach there. As a formalized business process, strategy planning has been in place for as long as four decades ago. However it is commonly observed that most organizations have no idea of where to head to and even if they know that, they don't know how to conduct the planning process effectively. This has led to the failure of most strategic plans which are no less than sitting un-used puppet. Actual implementation is barely observed. Luckily, since the past decades, steps have been taken to make strategy planning and execution more effectively. Intended Strategy formulation: As the organizations are subjected and exposed to the pains of recession in this crippling world economy, tradition business models need to be turned inside out. It is very important to turn the traditional business models upside down and shape new ways of for strategy implementation and formulation. There are two ways in which strategy can be defined in every company. These are both independent and simultaneous processes through which strategy is defined. In the first strategy making process, the formulation is conscious and analytical in nature. It involves the assessment of market nature, competitive edge, the weakness, customer needs and the main agents of market grown. In this kind of process, strategy is formulated with a concrete beginning and end. Such processes are mostly managed by the top management. The end result of this process is an intended strategy. Intended strategy is also called deliberate strategy. Intended strategy is made a process which is called strategy formulation. In intended strategies, a pattern of decisions are formulate before an action can be undertaken. It is prior to action. It is known to be implemented provided that three conditions are met. One, all those associated with the organization should be able to comprehend each and every clause in the management's intended strategy. Two, if a collective action needs to be undertaken to implement there should be common understanding throughout the organization keeping in line the views of the top management. Thirdly, the actions must take place, irrespective of the political, technological or market conditions outside. Because it is very rare to find circumstances where all three conditions can be met, intended strategy is rarely implemented. Emergent strategy formation . A strategy gives a company the opportunity through which it can align itself and be able to exploit its potential to the maxim. While doing so, the environment and other factors are continuously accounted for and changes apportioned to the strategy accordingly. In other words strategy defines where an organization is, where it heading to and how is it going to reach there. The second strategy making process is called the emergent strategy making process. Emergent strategy is on the actions itself. It is a result of every day priority decisions made by different stake holders in the organization. They could be middle managers, engineers, sales people, financial staff etc. The decisions are independent of the intentions. The decisions are made despite the absence of "intentions". Most managers do not consider this decision a strategic decision but call it tactical in nature and character. For instance, Intel's decision to try out Unicom order. This was a second tier Japanese calculator that led the companu on the path to microprocessors. There were no decisions made prior to action in this regard. Strategy found itself after the action had been taken. Sam Walton decided to build a second store in the same vicinity as his first one called Bentonville, Arkansas instead of opting for a larger city. This led to the discovery of Wal-Mart. The main idea being building large stores in small towns. Thus emergent strategies are ado. They are a result of a manager's daily response to problems and opportunities that he comes across. There is no deliberate strategy making. The analysis and planning follows each day's action. There are various factors that make up a company's strategy and they are these factors which determine whether it is a going to be an intended or an emergent strategy. The resources are then asked to flow through a common filter. This is the resource allocation process in strategy making. A company's actual strategy is a manifestation of the line of products, processes, and acquisitions to which the resources are allocated. The resource allocation process is more of a filter which decides which initiatives should be funded and which shouldn't. To what processes should the resources be allocated and to what processes should resources be not allocated too. It's not a simple process but rather a complex one that takes place every day in the organization at various levels. For instance, a sales person's decision on which call to attend and which call not to attend. Which customer to visit and which customer not to visit. During the meeting, she has to decide which factors to focus more on and which factors should rather be ignored. It could be anyone. It could be an engineer too or he may be working on a lot of projects at a time. Now he has to decide which project he should work on and which project he shouldn't work on. Likewise senior management has to keep taking key decisions regard which projects are worth investing funds and which projects aunt worth it. All these decisions taking place at various levels in an organization make up the resource allocation process. Evaluate the strategy formulation process: how suitable is it for the organisation Take into account the advantages and disadvantages of formal planning systems, the implications of emergent strategy, and the effectiveness of the processes used. Strategy formulation can be at the corporate level. It can be at the Business level and it can be a functional level. It takes into account all the broad decisions which have to be considered where an organization's scope and direction is concerned. What changes need to be incorporated to achieve the growth objective and the kind of strategy needed to pursue it. It also takes into account, the lines of business an organization is in links three various kinds of strategy together. These are the: 1) Growth or directional strategy - what makes up the organization's growth objective that is. How should the growth objective be achieved How should we go about accomplishing it 2. Portfolio strategy-what should be the portfolio of the lines of businesses we plan to be a part of. What kind of diversification do we need Should it be reconsidered 3. Parenting strategy: How should the resources is allocated and how should the capabilities be managed. What kind of activities will be undertaken to support the portfolio. Where and to what extent various lines of businesses should be integrated. At the business level the strategy is competitive. It is decided how will the company compete and fight in each line of business it has ventured into. These lines or business are also called strategic business units. At the functional level, strategy determines how to effectively put to use all the available resources to maximize resource productivity. It's more localized. Formal planning systems while giving a company a clear direction in which to go through have to be re-evaluated over and over again because the business environment is never the same. It keeps changing and so will the formal planning also have to be changed with each changing climate. If it is not revised it will stand stagnated and would lose its purpose and stay standing on the bookshelf with little focus on its implementation. These kinds of strategies are devoid motivation. Emergent strategy processes come with soaring levels of motivation. The action has already been taken. What needs to be done is capitalizing on the action to its complete potential. There is more room for change and a bigger synergy of ideas. Recommendations: Keep coming up with new ideas and incorporating them in the strategy formulation at every level. Make sure to take ideas from lower level employees as well because they are directly related with the business processes. Take concrete steps to implement strategy because mere strategy formulation won't do unless prior implementation takes place. Sources: Fayol, H. (1949).General and Industrial Management.5th edn, Pitzman Press Gosling, J., Case, P. & Witzel, M. (2007) John Adair: Fundamentals of Leadership. 1st edn, Palgrave Macmillan. AS, L. (2001). MIS-Quarterly . Bournemouth University. (n.d.). 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