Impact of Perspectives of Strategy on Real-World Strategies Adopted by Firms

RESEARCH PROPOSAL 1
Impact of perspectives of strategy on real-world strategies adopted by firms
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RESEARCH PROPOSAL 2
Introduction
Strategic management is the process of formulating and implementing plans and
initiatives to achieve the objectives of an organization in the most cost effective manner
based on the consideration of the internal and external factors. Strategic behaviour refers
to the decisions made by the management of an organization and how they influence both
the internal and external business environment. Strategic decision making is the process of
decision making by management of organizations based on the consideration of all factors
at play within the business environment and aligning those decisions to the objective of the
organization.
The competition in the business world is becoming stiffer each day. As different
organisations seek to gain a competitive edge and increase profitability, strategy formulation has
become one of the most important aspects of organizational culture1. Strategic management is
influenced by two factors. The first factor is strategic decision making, which is the application
of the relevant theories so as to leverage an organization’s competitive advantage over
competitors2. Secondly, the leadership capability is vital as it informs the nature and extent of
strategic decision making3. This proposal, therefore, seeks to assess the impact of perspectives of
strategy on real-world strategies adopted by firms. The research will focus on the process of
strategy formulation and how the three identified theories can be incorporated into strategic
decision making. The intended research will also explore the relationship between strategic
leadership and the cognitive abilities of the leaders. It is the leaders in an organization who
1 Sims J, P PowellR Vidgen, 'A Resource-Based View Of The Build/Buy Decision: Emergent And Rational Stepwise
Models Of Strategic Planning' (2016) 25 Strategic Change
2 Alice J. Walker and Kalle J. Lyytinen, 'Rationalities & Routines For Practicing Evidence-Based Management In
Conflicted Strategic Decision-Making Groups' [2013] SSRN Electronic Journal.
3 Vargas-Hernández J, 'Research Methodology Strategies In Strategic Management' (2012) 7 JPAIR Multidisciplinary
Research

RESEARCH PROPOSAL 3
formulate strategic decisions which makes their cognitive abilities an important variable in the
research4.
Literature review
The industry-based view theory focuses on the business environment within the industry.
This is an evaluation of the external factors which are at play within the industry in which an
organization is carrying out its business5. This theory involves the analysis of the existing
conditions within the business environment and how they can be manipulated to the advantage of
an organization6. The aim of application of this theory is to gain a competitive advantage and to
create a unique product or service that will not be exposed to competition in the industry7. The
resource-based view theory, on the other hand, focuses on the internal capabilities and strengths
that an organisation can exploit so at to maintain its dominant opposition in the market or create
a new market niche. Resource-based view leads to a competitive advantage if an organization
possesses resources that are non-substitutable, non-imitable and rare and valuable8.
The third theory is the institutional based view which is a supplement to the first two
theories. This theory looks into the institutional culture of an organization vis a vis the overall
culture of the industry9. The differences in business cultures can then be exploited to further
expand an organization’s competitive advantage by exploiting the beneficial institutional
4 Dwivedi RS Chakraborty, 'Strategic Decision Making For A Footwear Industry Using Activity Based Costing And
Value Chain Models' (2017) 17 Leather and Footwear Journal
5 Sims J, P PowellR Vidgen, 'A Resource-Based View Of The Build/Buy Decision: Emergent And Rational Stepwise
Models Of Strategic Planning' (2016) 25 Strategic Change
6 Dan Lovallo, Carmina Clarke and Colin Camerer, 'Robust Analogizing And The Outside View: Two Empirical Tests
Of Case-Based Decision Making' (2012) 33 Strategic Management Journal.
7 Li HX Zhou, 'Risk Decision Making Based On Decision-Theoretic Rough Set: A Three-Way View Decision Model'
(2011) 4 International Journal of Computational Intelligence Systems
8 Ali Raza Nemati and others, 'Impact Of Resource-Based View And Resource Dependence Theory On Strategic
Decision Making' (2010) 5 International Journal of Business and Management.
9 Huaxiong Li and Xianzhong Zhou, 'Risk Decision Making Based On Decision-Theoretic Rough Set: A Three-Way
View Decision Model' (2011) 4 International Journal of Computational Intelligence Systems.