The guidelines of a business strategy

This task will give you an understanding what values, goals and objectives are, of an organization and how they are affected by the organization culture, I will support my finding with appropriate academic theories, models, quotes, examples and references.

I will start by defining what strategy is according to Michael Porter in an article: “what is strategy” (Havard Business Review article, 1996), he illustrates that “competitive strategy is about being different. It means purposely choosing a different set of activities to deliver a unique mix of value.” By assessing this quote, Porter states strategy is about differentiating yourself from the eye of the stakeholders; it’s about choosing a different form of activities from your competitors, to enhance to your unique value.

Henry Mintzberg, presented 5 “P’s” as a way to define strategy. Each “P” defines what strategy is, this provide a all-inclusive overview that is more effective than just a definition. Henry Mintzberg, five P’s are as follows:

Strategy is a plan, a guideline in getting from here to there

Strategy is a pattern a pattern of actions that emerge, unintended or intended over time.

Strategy is position; Locating its firm in its environment this reflects in decisions in selling products and services in specific markets.

Strategy is perspective, that is, vision and direction

Strategy is a ploy, a specific manoeuvre intended to outwit an opponent or competitor.

In summary the plan provides the direction in which the firm intends to achieve its goals, ploy add a a special manoeuvre to outwit an competitor such as competitor advantage, pattern emphasizes that strategy is not a once off event but a constant stream of decisions and resultant actions that drive the firm forward, over time, towards its goal, position adds that different firms have different mixes of markets, clients and services that they provide to those clients and finally perspective provides an insight onto how the firm and its strategists are informed by their own professions, their perceptions of business, and the unique characteristics of each firms own world (Millard, 2006).

Mintzberg points out that with many advantages of implementing a strategy, it however does provide disadvantages, as he points out that strategy sets direction, while this is clearly beneficial, the downside is that it may cause “blinders” on our thinking to appreciate new ideas, possibilities and prospects.

So evaluating these points strategy is the direction of where the organization is going, and how a business intends to achieve its end goal. It’s a set guidance for a path to follow, and decisions they take with adapted flexibility to unknown hindrance to an end destination.

Fred Nicklos (2000) parallels on my view on strategy, by saying: “In short, strategy is a term that refers to a complex web of thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides general guidance for specific actions in pursuit of particular ends.”

Culture is important to an organization as it affect the strategy that is implemented within the company.  For example, the three largest companies that distribute and manufacture technology are AMD, Intel, and National Semiconductor.  Even though they all sell products in the same industry, they each have their own unique strategy and culture that influences the way they compete in the industry.  AMD’s strategy is to offer good service and focus on the marketing and selling of a quality product.  In addition, they respect their employees and value hard work, diversity, responsibility and embracing their success. (AMD)  Intel focuses on being leaders in innovation and creativity.  They were one of the first companies to offer a health plan that allows the employees to manage their own expenses which gives the employees more responsibility.  Responsibility is one thing that Intel values strongly.  Also, Intel encourages their employees to participate in programs that are good for their community.  Intel has chosen to create products that bring value to the world and to the communities around them.  Intel’s culture and strategy are two factors that contribute to their success in the technology industry (Otellini).  National Semiconductor focuses on selling cost leadership.  They have a cost control that is stringent and culture that is more concerned about the numbers than anything else.  Their strategy has a sense of brutality which is why they are called, “Animals of the valley.”  It takes the people, structure and culture for a strategy to be successful.  But sometimes strategies in an organization change and when they do, their culture must also change.  If a company has a strong culture, they may gain a competitive advantage over their competitors.  (Staw, pgs. 312-314)

Now leading to our next subject, goals are targets which like to be achieved in a time frame according to (Sunderland and Canwel) the expression of aims is sometimes used as an alternative to mission.

Goals are valuable as they give a simple and sufficient answer which is transparent to everyone to comprehend; it gives a “helicopter factor” which gives an overview of the organization which helps in communicating the vision of the organization to the stakeholders.

Disadvantage with utilizing goals is that it may become inappropriate in the climate it was set as the world is changing all the time, it may come inflexible to sponsoring change and innovation in a time of rapid change and great uncertainty.

My above disadvantage was illustrated in BP’s goal “To carry on its business in an environmentally responsible manner, and develop cleaner energy and renewable energy sources. The group is committed to the responsible treatment of the planet’s resources and to the development of sources of lower-carbon energy “BP (2010) However there was an incident which happened April 2010; in were a Deep-water Horizon well explosion which caused biggest oil spill in US History according to BBC News (2010) which resulted in eleven people killed due to a drilling which exploded. BBC News (2010) also reported that that “The thick crude has already permeated more than 70 miles (110km) of Louisiana’s coastline, threatening fragile wetlands and putting the vital fishing industry at risk.” Which contradicts with their goal in by doing business environmentally responsible manner and responsible treatment of the planet’s resources.

M&S has defined their mission as, “To make aspirational quality accessible to all” (M&S, 2010). This mission has been kept by way of Marks and Spencer boasting with over 895 stores in more than 40 territories around the world, over 600 domestic stores in the UK and over 300 international stores. (M&S, 2010).

Drucker himself highlights success of Marks & Spencer by perceveing that: Marks & Spencer redefined its business as the subversion of the class structure of the nineteenth-century England by making available to the working and lower middle classes upper-class goods of better then upper-class quality, and yet at prices the working and lower middle-class customer could well afford…What made Marks & Spencer unique and successful…was it conversion of the definition of “what our business is, and should be”, into clear, specific, operationally effective and multiple objectives. (Drucker, 1974: 96)

Now we come to, values these are beliefs of a company, which is customarily inputted in a business mission statement. A value is a belief, a philosophy that is meaningful.

Every individual or organization has a core set of personal values. Values can range from the commonplace, such as the belief in hard work and punctuality, to the more psychological, such as self-reliance, concern for others, and harmony of purpose. Collins and Poras puts this way that set values is the grounds on your policies and actions of an company and your values come before your goals

According to Milton Rokeach (1968) a value is “a learned orientation or disposition, toward an object or situation which provides a tendency to respond favourably or unfavourably to the object of situation”. Rokeach, attempted to differentiate between `instrumental values` and `terminal values`. Instrumental values consist of values such as being ambitious, broad-minded, obedient or self-controlled. Terminal values are factors such as world peace, freedom, salvation or self-respect. These values give individuals standards by which we motivate our behaviour. Organizations will utlize this to attempt to clarify which values and behaviours are critical for carrying out strategies and fulfilling missions.

Google’s culture is very exciting and rewarding.  Google has 17 cafeterias that offer free food to its employees.  Employees such as Stacy Sullivan, the HR director enjoys the Irish oatmeal with fresh berries at their Plymouth Rock Café (CCN, 2007). Joshua Bloch, a Java expert loves to eat their roast quail at their Café Seven (CCN,2007).  The food is just one of many perks of becoming an employee at Google.  There is a place where you can drop off your laundry, get an oil change and get your car washed.  In addition, there is a fitness centre and a place to get your haircut.  Google even has a pool table in their employee lounge. But of course it’s not just fun and game

With an income over 6.5 billion dollars income, it is not hard for Google to have such a lavish lifestyle and work at the same time, this gives google employees of a feel of work is “home” this will improve their productiveness, Not only Google and its employees do this very successfully but they enjoy doing it. (Lashinsky)  and they will be able to achieve their mission “Google’s mission is to organize the world’s information and make it universally accessible and useful.”(Google)  

Objectives/Goals

According to Sunderland and Canwell (2004) Goals/Objectives are targets within an organization wishes to achieve in a set time. So according to this statement goals are list of affairs in which organizations aim to achieve in a set time frame to aid a business.

A goal or an objective can be short term or long term. Thompson (1987) supply a definition by outlining that a “Long term objectives relate to the desired performance and results on and on-going basis”. So fundamentally long term goal is where you aspire to be a sample of a long term goal will be: sell your business for a multi-million pound fee before you retire.

Short term objective is slightly differentiated from a long term goal it is concerned with near performance targets that the organization is working towards in pursuing its long term objective. This is essentially saying that short term objectives needs to be accomplished in a short time period such as make an increase profit in the end of the financial year.

In setting an objective a business will use an acronym called SMART, this is a remedy as objectives may not be specific or achievable, this term SMART stands for: Specific( the objective we need to be clear and well defined), Measurable (The achievement will need to be checked this enables managers to see how far they are in accomplishing there objective), Achievable (The objective needs to be attainable), Realistic – (The objective has to be practical to enable you to achieve it) and Time related(The objective has to be times scaled in the date of the achievement or review of progress).

This remedy which enables the objective to be effective has many advantages such as it helps managers effectively plan their objective, by asking questions such as: Is the objective specific in what we need to achieve or is it realistic with resources our company has ?, this will inevitably lead to another advantage by using this process as it will identify problems, but with many advantages there are disadvantages such as it doesn’t give a direct guideline in accomplishing the goal but just gives you an guideline in how to manufacture an objective an additional objective is that there is danger of inflexibility to change of objective.

Not all businesses seek for merely for profit some organizations utilize alternative objectives an example will be Co-Op according to their official website (Co-Operative, 2010) there goal is to be an ethical leader and to inspire others through co-operation.

The Walt Disney Company is another company that is successful with an interesting culture and a winning strategy.  Disneyland has an objective to make “everybody happy” The Disney Company is a business of feelings that is filled with joy and laughter. 

A part of Disney’s image is the look and feel of the employees and the Disneyland culture itself.   One of the goals of Disney’s employees is to lift up their guests’ spirits.  The Disneyland culture is reinforced by the employee’s actions and behaviour.  Of course, the culture is not the only factor that contributed to Disney’s success.  With the creativity and dedication from their marketing, engineers, and Walt’s vision & dream; they became the primary choice for family entertainment.  Furthermore, they ranked #1 in being the best place to launch a career, according to Business Week of 2006. 

Because The Walt Disney Company has a winning strategy and pleasant culture to achieve its objective, the Disney Institute was created to show other businesses how to apply the same tools and strategies that are being used at Disney’s resorts today.  The Disney Institute has helped hundreds of organizations in improving their existing business processes and has helped them get much better returns on their investment by incorporating the same winning businesses strategies as Walt Disney.  Their program trains businesses in the following areas: loyalty, people management, quality service, organizational creativity, team experiences and other custom strategies they have trained business such as Volvo and Miami International Airport.  (Disney Institute)

In concluding, culture in an organization is crucial to its success.  If an organization has a strong culture than it is likely their employees will have a high level of commitment and loyalty.  Also, they will have a low employee turnover and absenteeism rate.   Culture inspires, brings employees together and educates them.  Furthermore, it is a form of social control that influences the way people act and behave in an organization this will inevitably affect the values, the objectives and the goals.