Making Strategy Strategic Management

Questions: 1. Compare and contrast emergent and deliberate processes of strategy development? 2. Discuss the arguments for and against prioritising shareholders over other stakeholders when devising a companys strategy? Answer: 1. An organisation selects effective and potential strategies in order to achieve the predetermined goals. The organisational strategies are classified as emergent and deliberate. A deliberate strategy can be describes where the collective goals, visions and intentions of an organisation is articulated in broad manner. A deliberate strategy if possible should be communicated to the associated employees, as they are the major responsible for further implementation of the strategy. On the other hand, the emergent strategies can be considered where the consistencies arrive in the behaviour of the organisation. Eden and Ackermann (2013) have mentioned that emergent strategy can be employed when the environment imposes the pattern of actions in direct manner. However, there are no universal consensuses, which will reveal that which approach is perfect for the organisation. Deliberate strategy is facilitated with the help of three processes strategic leaders, who use strategy to manifest leadership; strategic planning mechanisms, which involve systematic analysis and exploration for development of organizational strategy; and external imposition of strategies by stakeholders. On the other hand, emergent strategy is developed with the help of four processes - logical incrementalism that helps the development process by experimentation and gaining of knowledge from partial commitments instead of global formulations; learning organization that is capable of getting regenerated continuously with the help of knowledge, experience and skills within an encouraging organizational culture; political processes that involves the development of strategies in the form of negotiation outcome amongst stakeholders; and continuity strategy takes form because of continuous strategic moves, strategic decisions and taken-for-granted culture in organizations. Both the deliberate and emergent strategies possess own advantages and disadvantages. It is up to the management of the organisat ion in order to determine the appropriate strategy. According to Wiesnerand Millett (2012), the business experts of an organisation should understand the type of strategies before implementing those. The goals, vision and mission of an organisation should be considered before incorporating the proper strategies. The management understand the basic differences in between the realised and intended strategies. There are always requirements of understanding a perfect balance in between the emergence and the strategic design. As opined by Mirabeau and Maguire (2014), deliberate strategies involve plans for future and effective thought. The deliberate strategies are always formulated, which the emergent strategies are not. The deliberate strategies can be unrealised or realised in potential manner. On the other hand, the deliberate strategies are considered as smart strategies than the emergent strategies. Emergent strategies are made from the patterns of present, past and future of the organisation. Emergent strategies can be used when the vision of the organisation provides a general sense of direction. The potentiality of the emergent strategy suggests its reaction to the existing business activities. This particular strategy also reacts to the new opportunities and the potential threats that may damage the brand image of an organisation. Hillet al. (2014) have mentioned that the deliberate strategy focuses on the control and direction, whereas the emergent strategies involve the basic notions of the st rategic learning. Both the emergent and deliberate strategies identify the fundamental intention of the activities within a corporation in together manner. Any kind of business can fall under either the emergent strategy or the deliberate strategy. Both of these strategies occur in the large business functions instead of small ones. Both the deliberate and emergent strategies always address a specific kind of concentration on the exact content of strategy. The deliberate strategies attempt to reduce the outside influence on the business activities. According to Vaara and Whittington (2012), the employees of the organisation should learn adequate familiarity with the future business operations and goals. Following the deliberate strategy, the employees should discuss every action and think properly in order to achieve the objectives of the company. On the other hand, the emergent strategies can be considered as the realised strategies, the emergent strategy creates an opposite effect of the deliberate strategy. The emergent strategy can mark a specific pattern of the business functions, which has been developed over time. Even this particular strategy is more contemporary than the deliberate strategy. The actual pace of the transformation in current business environment is gradually staggering. The formal economic theory of strategy states the existing ideas within the management. This particular theory suggests transparent interpretations and permit analysis that help to make suitable decisions for further development of the organisation. This particular theory involves the importance of strategy as an essential solution to the problems that exists in the company (Chariet al. 2014). On the other hand, the theory of the strategic planning involves the constant strategy development of the organisation. This particular theory helps the business experts and the management to plan efficient budgets and to adopt much more disciplined and systematic approach while implementing the effective strategies. Papadakis and Barwise (2012) have contradicted that the theory of the strategic planning involves a perfect planning, commanding, organising, controlling and coordination of the strategies. The critical evaluation of the theories related to the strategies of the companies suggests the concentration on the governmental competence and competitiveness among competitor companies. There are also arguments, which clearly reveal the fact that there are hardly any fair scopes for the business experts of the organisation to follow the theories related to the strategy. The management generally follows the contemporary trends in the particular industry before implementing effective strategies in their corporation (Neugebaueret al. 2015). The deliberate strategy can be considered as top-down, which is akin to the strategic planning. This specific strategy needs to be coordinated with the three actions, such as the management should address every critical explanations for make the strategies successful. The management should perceive the picture of the implemented strategy in order to align the actions of the organisation. Birkstedt (2012) has contradicted that the emergent strategy is more cumulative effect on employees and sales persons rather than the higher authority. Aspial Corporation, a famous retail chain in Australia operates its business operations in the gradual changing industry. The industry of Singapore is very much dynamic and its business environment changes with the improvement of the business laws. The management of Aspial Corporation has truly understood that if there are any drawbacks within the newly implemented deliberate strategies in order to continue their present business activities, then it w ill surely influence their current business scenario. The emergent strategy of this company also supports the competitiveness in the specific industry. Aspial Corporation encounters a high level of competition in the retail industry of Singapore from the retail companies like Popular Holdings, Sheng Siong and NTUC FairPrice Co-Operative. The management of Aspial Corporation ignores the deliberate strategy and follows the emergent strategy, as it requires tactical operations decision on regular basis. Most of the business theorists have reviewed the emergent strategy as upcoming and flexible than the implementation of the deliberate strategy. However, the management of Aspial Corporation has viewed the emergent strategy as an important method of learning. On the other hand, the higher authority of the corporations adopts various profitable operation procedures and techniques into the predictable goals of the organisations (Papadakis and Barwise 2012). Both the emergent and deliberate strategies are suitable for modern days business world. There are advantages and disadvantages of both of these mentioned strategies. An organisation whether requires emergent or deliberate strategies can be determined by its present situation in the market. Going with the contemporary trend, most of the multinational corporations strictly follow the emergent strategy over the deliberate strategy. 2. There are always great debates over the importance of shareholders and stakeholders during the time of devising the strategy of the company. The strategy experts make a thorough market research before suggesting any effective and potential strategies for the further development of the company. In most of the case, the multinational corporations prioritise their shareholders while devising the companys strategy. With the help of the shareholders fund, an organisation secure its economic condition in todays competitive economic world. According to Miles (2012), the satisfaction of the stakeholders of a company should be measured as they are the most engaged individuals of the organisation. In a broader aspect, the stakeholders involves investors and shareholders alongside the associated employees, consumers, government and the business partners. The competitiveness of the particular industry where the company is continuing its business actually decides the kind of strategies require d. The strategy experts play a pivotal role for deciding the appropriate strategy for the company in order to hold a strong position in the particular industry. As opined by Retolazaet al.(2014), both the shareholders and stakeholders are responsible for a great contribution to the success of the company. On the other hand, there are arguments that the shareholders have discrete concentration on the profitability while the responsibility can be considered as an essential part for the stakeholders. If an organisation is successful both in responsibility and profitability, then it is easy to achieve the predetermined vision and goals. It is necessary for an organisation to keep the shareholders happy as they are critical to any kind of organisation. The shareholders possess an ultimate power to direct the strategic management and planning of the company. Marshall and Ramsay(2012) haveargued that a well-informed shareholder is the best planner, visionary and evaluator of a company can ever count on. Therefore, the multinational corporations while pursuing their international business in the international markets prioritise shareholders over the stakeholders. Involving and engaging the shareholders in the feedback on the planned strategies actually help the management of the organisation. On the other hand, it is the stakeholders, who perform their assigned roles and responsibilities in perfect manner only to help the company to achieve its goal. The responsibilities of the stakeholders cannot be ignored during devising the strategy of the company as they are the heart of the company (Greenfield 2012). The stakeholders deal with every challenges during the business operations of the company, whereas, the shareholders only deal with the financial aspects of the organisation. In order to hold a stable position in the competitive market, shareholders are required, however, the duties of stakeholder cannot be overlooked. The shareholders help an organisation to stay connected with the industry financially. There are huge contradictions regarding the prioritising of shareholders and stakeholders when devising the effective strategies of an organisation. Johnston and Morrow(2014) have suggested that the employees are the backbone of the company, therefore the management should perceive potential way to satisfy the employees. Otherwise, it will directly influencethe basic execution of growth initiatives and strategic plan. If the stakeholders are not prioritised during the devising of the strategies of an organisation, then it will derail easily the fundamental growth of any establishment. Stakeholders of an organisation consist of the creditors, employees, government, suppliers, community and unions. An organisation has draws its adequate resources from the stakeholders, therefore, it is required to priories them over the shareholders, who handle the financial segments of the company.There should be appropriate and potential shareholderswith efficient knowledge and skills that can scruti nise the performance of the business strategies across environmental, ethical and social issues. Stakeholder administration is a major self-discipline that successful individuals use to win support from others. It helps them make sure that their initiatives be successful in the place others fail. Stakeholder analysis is the manner used to determine the important individuals who have to be won over. To properly identify and prioritize stakeholders the power matrix is used in a way that also helps to map the levels of power they have (De Schepper, Dooms and Haezendonck 2014). Taking Singapore Airlines as an example, a power matrix is made that shows which stakeholders, in relation to the power they hold, and its extent, would probably be interested in the organization. The grid shows the sort of relationship required by the organization to set up with each stakeholder. The key players are placed in D segment. Segment C has less interest, but their feedback is important in certain situations. Segment B has high interest, but low power of influence. Finally, segment A has low interest and less power stakeholders, who are only needed to contribute in the strategy development process for segment D. Both the stakeholder and shareholder theories are normative theories of the corporate social responsibility. Bennet al.(2016) have suggested that the normative theories clearly dictate the role of the corporation while devising the potential strategies for further development in this contemporary business world. On the other hand, the business managers and the executives think that it is important to prioritise the shareholders over the stakeholders. The stakeholder theory states that the close relationship in between the organisation and the stakeholders. The stakeholder theory suggests that the stakeholders of an organisation possess enough capability to influence the gradual success of the company in particular industry. Ali(2015) has contradicted that the stakeholder theory is solely managerial in the broad aspect. This particular theory fails to describe the existing situations of the organisation that require effective strategies. Potential strategies help an organisation to co pe up with the competitive business environment. The stakeholder theory clearly reflects the simultaneous attention, key attributes to the legitimate interests of all the suitable stakeholders of the company. The argument regarding the prioritisation of shareholders over the stakeholders when devising the strategy of the company will never come to an end. Greenfield(2014) has contradicted that most of the companies prefer shareholders during the selection of the potential strategies as they handle the most important segment of the business that is the financial condition. If the financial situation cannot be handled in proper, there will be huge downturn in the companys profit, which will damage the brand image and the market share in the market. However, it is noteworthy to mention here that, the prioritisation of the shareholders over the stakeholders of an organisation during devising of strategy varies from one organisation to another depending on their market (Stretton 2014). Even it can be determined after analysing the present business scenario of the company within a particular industry.BreadTalk, Bee Cheng Hiang and Twelve Cupcakes Private Limited are famous companies in the food and beverage industry of Singapore. These companies are known for following the right approaches while implementing apt strategies for further success of the company and the development of the existing products. The mentioned companies always prioritise the shareholders over the stakeholders while devising the strategies. The effective business strategies will help to respond to the constant changing ethical demands of the society. There are several small companies operative within the food and beverage industry of Singapore, which prioritis e the stakeholders over the shareholders. Still BreadTalk, Twelve Cupcakes Private Limited and Bee Cheng Hiang are considered as reputed companies in this specific industry only because of their implementation of ethically fair business strategies, which the small organisations in this industry hardly follow. The shareholders of Twelve Cupcake Private Limited, Bee Cheng Hiang and BreadTalk prioritise the shareholders only because to hold the best position in the food and beverage industry of Singapore. The shareholders of these companies truly handle the economic situations in great manner, therefore it is obviously important to prioritise them over the stakeholders. References Ali, T., 2015. Beyond shareholders versus stakeholders: Towards a Rawlsian concept of the firm.Research in International Business and Finance,34, pp.126-141. Benn, S., Benn, S., Abratt, R., Abratt, R., Kleyn, N. and Kleyn, N., 2016. 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