Strategic Management: Business Level and Function Level

Strategic management deals with important and main initiatives taken by managers on behalf of owners. These initiatives involve resource utilisation so that performance of their firms is enhanced in external environment. Organization’s vision, mission and objectives are specified by strategic management. Not only this but also developing plans and policies for organization, projects and programs that are due to fulfill these objectives and also allocating proper resources to implement plan, project, programs and policies is also tasks of strategic management. To evaluate the whole performance of the business and its growth towards objectives, a balanced scorecard is frequently used. Strategy needs to initiate with stakeholders expectations and use a customized balanced scorecard which takes in all stakeholders are also stated by latest studies and foremost management theorists. Strategic management is nothing but a level of managerial activity that is responsible for setting goals and all the necessary strategies. Providing the overall direction toward which the business or the organization vision to move forward is also the responsibility of strategic management.

According to Gary Hamel and Michael Porter, the role of strategic management is to figure out the core competencies, and then bring together a set of assets that will offer a competitive advantage and increase value added. It is also stated that to make it happen innovation, organizational structure and reputation, these 3 types of capabilities are essential. Enterprise strategy has its own three levels. It is formulated and implanted in these three levels. These levels are: Corporate level, Business unit level, Functional or departmental level. At the business stage, people are accountable for creating value through their businesses. People do so by managing their portfolio of businesses, which ensures that businesses are winning over the long term, rising business units, and from time to time ensuring that every business is well-matched with others in their portfolio.

Business units are the core of product or service development. Products and services are developed by business units. The role of the corporation is to manage its business units, products and services so that each is competitive and so that each contributes to company purposes.

Corporate level strategy basically is alarmed with choice of businesses in which company should struggle and with development and harmonization of that portfolio of businesses.

Strategies:

Corporate level strategy is concerned with:

Defining the issues that are corporate everyday jobs. These might include identifying the on the whole vision, mission, and goals of the company, the type of business firm should be concerned, and the way in which businesses will be integrated and managed. It’s known as Reach.

Defining where in firm competition is to be limited to a small area. It’s nothing but Competitive Contact.

Business strategy seeks to develop synergies by sharing and bringing together employees and other assets across company units, investing monetary possessions across business units, and using trade units to harmonize other commercial business activities, its Managing Activities and Business Interrelationships.

Corporations make a decision, how business units are to be governed: through direct corporate intervention (centralization) or through independent government (decentralization). And it is Management Practices.

Business Unit Level Strategy

A tactical industry unit may be any profit center that can be designed separately from the other business units of business. At the business unit level, the planned issues are about both realistic management of operating units and about developing and at the bottom of a competitive advantage for the products and services that are produced.

Functional Level Strategy

The functional level of your organization is the level of the operating divisions and departments. The strategic issues at the functional level are related to functional business processes and value chain. Functional level strategies in R&D, operations, manufacturing, marketing, finance, and human resources involve the development and coordination of resources through which business unit level strategies can be executed effectively and efficiently.

Functional units of your organization are involved in higher level strategies by providing input into the business unit level and corporate level strategy, such as providing information on customer feedback or on resources and capabilities on which the higher level strategies can be based. Once the higher level strategy or strategic intent is developed, the functional units translate them into discrete action plans that each department or division must accomplish for the strategy to succeed.

Whittington’s and Mintzberg’s strategy concepts:

Now, to perform well, some strategy models are really important. Not necessarily all models are quite good or updated with modern business but they do influence either internal or external or both environments. But to treat an organization properly managers have to think it as a whole being. Measuring different parts can lead to misjudgment and further situation where loss can occur. As Mintzberg, Ahlstrand and Lampel stated, the story of blind men is not new to anyone. To them different parts of the elephant felt totally different. As, one felt the leg as a tree, other one felt the trunk as a big snake. But they got a wrong perception coz they were blind and with touch they only could perceive limited parts. But managers of organizations are not blinds; moreover they are very conscious for everything. But the developed models that are already in market is limited to different parts of the organization. If those models are not updated according to recent times, it would be not only hard to use them but also less profitable. Now if we consider mintzberg’s comparative analysis of ten schools, the n we need to know first about the schools. There are total ten schools, The Design School, The Planning School, The Positioning School, The Entrepreneurial School, The Cognitive School, The Learning School, The Power School, The Cultural School, The Environmental School, and The Configuration School. These schools focus on different aspects of the total business reminding managers that one part remains untreated and the business can fall very quickly. Mintzberg thought of strategic planning thoroughly but he was unable to come to one point. So he drove more deep and then he found out that there may not be only one strategic planning while so many people are using it too differently to match. So, he concluded that there is no one strategy there is five types of strategies. These are listed as: Strategy as plan, Strategy as ploy, Strategy as pattern, Strategy as position, Strategy as perspective. These five types of strategies were actually developed in process of 10 schools of thoughts which are already given above. These ten schools were grouped into three categories. It goes like this prescriptive or normative (informal design and conception school, the formal planning school, and the analytical positioning school), 2nd group (entrepreneurial, visionary, or great leader school, the cognitive or mental process school, the learning, adaptive, or emergent process school, the power or negotiation school, the corporate culture or collective process school, and the business environment or reactive school) it mainly focuses on how strategic management is actually performed rather than how its hypothesized as to be done. The 3rd group (the configuration or transformation school), it’s more like a hybrid of other schools. According to Mintzberg, strategies are less theoretical and more practical and that’s why it’s more dynamic and flexible than management perceives it.

In 2001, Whittington, categorized the strategy concept in four approaches: Classic approach, evolutionary approach, process approach, systemic approach.

There is nothing more to describe about these approaches but what is important that Whittington himself put an end to his perspectives like elaborating strategy is hard enough and there is no one or another way. But when it comes to real life, implication and performance is well influenced by each of these approaches. So we can say that each of these approaches has a place in reality.

Strategic management is also not above limitations. When it comes to hard situation that demand instant act, fluidity is much appreciable than rigid methods or direction to do the work. It not only make the performance non-innovative but sometimes it also pay by loosing many opportunities. It also ends up defining the organization narrowly. Now, if it comes to strategic theories, it’s always not so dependable. Modern business is so dynamic that one or two theories can’t possibly cover all the fact or parts equally. It covers some parts but not full. But if we think a business as a being, we can’t possibly look at only one or two parts; we have to look for the whole thing. A part or parts may lead to many misconceptions, when the full views can give totally a different view.

As a matter of fact like theorists there is more to say about limitation. Gary Hamel in 2000 coined the name strategic convergence to give details of the incomplete range of the strategies being used by competitors very much differing circumstances. He mourned that strategies converge further than they should, because the more flourishing ones are mimicked by businesses that do not recognize that the strategic process involves scheming a modified strategy for the particulars of each circumstances.

Ram Charan, arranging in a line with a admired marketing tagline, considers that strategic planning must not lead action. “Just do it!”, whereas not quite what he intended to mean, is a phrase that on the other hand comes to mind when fighting analysis paralysis.

In the real world in which strategies have to be put into practice, the three fundamentals are mutually dependent. Means are as likely to determine ends as ends are to determine means. The objectives that an organization might wish to follow may be limited by the lack of feasible approaches available out. There is typically only a little number of approaches that will not only be technically and administratively achievable, but also acceptable to the full collection of organizational stakeholders. In turn, the choice of feasible implementation approaches is determined by the accessibility of resources.

Conclusion:

Till now all the factors, analysis, theories has been collected, it’s quite clear that strategic management is not as much powerful as it seems in theories or when someone is describing it. After all nothing can be in ceteris paribus when it’s the real business world we are talking about. So, why it has to be different than journals if one might say, it’s obviously has to be different coz the journal can’t be updated in every second but unfortunately the world is changing, creating new opportunities and threats in every second. So many things are happening in one second that it’s quite unimaginable. So it’ll be quite awkward and foolish to think that it’ll be always like as it is said in case of strategic management after all strategic management is not so different than other theories or conceptual works. It must to have its own lacking. Dynamic business world demands process that can be changed so easily that one might be able not to pay the price for time limit. As time restriction is so terrifying that one moment one have an opportunity to grasp the next moment it’s taken by someone else. So if there is no much flexibility, opportunities are going to be lost in the depth of abyss. So, this statement – “Strategic Planning makes little or no contribution to the firm’s prosperity in today’s turbulent environment”, may not be so wrong a statement if we really consider all of the scenes. At the end it’s the full matter of means and end.

Ways that allow the means to meet the ends is suitable for the dynamic world whether it is so called theories or something new.