MGT302 Strategic Management: Analysis of Approaches & Benefits

This report provides an analysis of different approaches to strategic management, including the hierarchical and revolutionary approaches. The hierarchical approach focuses on information flow between organizational levels, while the revolutionary approach emphasizes innovation and trial-and-error. The report discusses the viability, benefits, implementation issues, and limitations of each approach, highlighting the importance of communication, planning, and understanding customer needs in strategic formulation. The report concludes that proper planning and continuous information flow are essential for successful strategy implementation in today's complex business environment. Desklib provides access to similar documents and AI-powered study tools.

Running head: STRATEGIC MANAGEMENT 0
Strategic management

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Contents
Hierarchical approach............................................................................................................................2
Revolutionary approach.........................................................................................................................2
Conclusion.............................................................................................................................................3
References.............................................................................................................................................4

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Hierarchical approach
This approach focuses on the flow of information between different levels in the
organization. This approach is useful so that a continuous flow of information can be done in
organization. Top level passes the expectations, decisions, and policies to the lower level
whereas lower level passes their problems and suggestions to the top-level management. It is
rightly said that when each level in the organization collect and pass only useful information
then the strategy formulation will be successful. In this approach, strategy usually made for
higher level in order to deliver the expectations to the lower level. Today’s business
organization is so complex and rapid changing. In this case, it is required by the organizations
to maintain a continuous flow of information and ideas to be passed (Wheelen, Hunger,
Hoffman and Bamford, 2017).
The hierarchical approach is usually found in large organizations in which focus in given on
the corporate level strategies in order to identify the industries in which the highly diversified
organization should compete. In every identified industry, manager makes the business level
strategies that will help the organization to compete with those (Haines, 2016). After the
formulation of business level strategies, the managers on the divisional level will implement
the same at the function level (purchasing department, marketing department, sales
department, or design). In addition, it is required by all the levels to interact with each other
time-to-time. However, lack of communication in different hierarchy becomes obstacle in
achievement of strategic objective. There are situations when lower level is required to
communicate the top level quickly. It is not possible for those employees to follow a proper
chain. In this case, organizations are required to operate a direct route for communication in
case of emergency (Hill, Jones and Schilling, 2014).
Revolutionary approach
Hamel and Markides developed the revolutionary approach in 1990s. It stated that the
strategic formulation should be innovation-driven, organic, part planning as well as part trial
and error. It stated that until successful approach is not identified, some part of the strategy
could be planned while some can be trial and error. Planning is a necessary component in this
process because without it, further course of action cannot be taken in organizations. It helps
the organization in eliminating the undesirable options and only keeps the important structure

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and information. By taking this approach, organization can further conduct the controlled
trials in order to identify the innovative and successful strategies (Karami, 2016).
In this regard, Markides suggested that a revolutionary approach of strategy formulation
should provide the detail of customers as well as the target customer that should be consider
by the organization. Besides describing the customers, it should also explain the offering and
benefits that are required to offer the customer that in turn help in creating value for the
product. In order to answer these questions, there should be some specific and innovative
strategies needs to be taken in order to serve the customer in best possible manner. In
addition, support of employees is also important to bring the planning into action (Morden,
2016). Therefore, it is essential to make employees understand the purpose of organization.
Employees of the organisation also required to understand how an organization is required to
react to its external environment. In this regard, he stated that strategic thinking is an
important indicator in bring creative and successful strategy (Rothaermel, 2015).
Conclusion
In the limelight of above discussion, it can be concluded that it is proper planning is an
important part of organization. There are different levels in the organization from where
continuous flow of information is essential. Today’s business organization is too complex
that requires the continuous communication between lower and upper level. In bog
organizations, it becomes a necessity to maintain continuous flow of information among each
department. Top-level management make the policies and pass those to the middle level.
Afterwards, suggestions are provided to the lower level to bring those policies into action. In
order to implement the successful strategies in the organization, proper planning is necessary.
Besides this, organization should understand the needs of the customer and offer the valuable
products to them.

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References
Haines, S. (2016) The systems thinking approach to strategic planning and management.
United Kingdom: CRC Press.
Hill, C.W., Jones, G.R. and Schilling, M.A. (2014) Strategic management: theory: an
integrated approach. Boston: Cengage Learning.
Karami, A. (2016) Strategy formulation in entrepreneurial firms. United Kingdom:
Routledge.
Morden, T. (2016) Principles of strategic management. United Kingdom: Routledge.
Rothaermel, F.T. (2015) Strategic management. United States: McGraw-Hill Education.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E. (2017) Strategic
management and business policy. New Jersey: pearson.