Alternative Approaches to Strategic Management

This document discusses alternative approaches to strategic management, including hierarchical, revolutionary, and resource-based view approaches. It explores the benefits and limitations of each approach and provides examples of organizations that have implemented them. The document also emphasizes the importance of efficient implementation and highlights the impact of these approaches on organizational success.

Running head: STRATEGIC MANAGEMENT
Alternative approaches to
Strategic Management
Student’s Name:
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STRATEGIC MANAGEMENT
Executive Summary
Strategic management approaches are determined to be a process of setting long-term objectives
and goals for an organization. In order to implement strategic management approaches,
organizations make strategic decisions with the help of strategic planning. It helps the
organizations to gain the ability to make long-lasting improvements that leads to the increased
value of the firm. The paper helps in identifying three strategic management approaches and
explains it with appropriate examples where the organizations implement these approaches to
achieve long-term success. The implementation of these approaches is not only helpful for the
organization but also for the employees to improve their performance.
However, the paper helped in identifying three approaches such as hierarchical approach,
revolutionary approach, and resource-based view approach. All these strategic management
approaches help the organization to gain sustainability and achieve organizational goals. The
paper revealed that the fact that these approaches provide various opportunities for the
organizations to increase their market share within the new market and differentiate themselves
from the competitors. Meanwhile, the paper also focused on the limitations of using these
approaches that create a negative impact on the firm’s success. Therefore, it becomes necessary
for organizations to make efficient use of these approaches.

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Table of Contents
Introduction......................................................................................................................................4
Description of three approaches......................................................................................................4
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
Appendices....................................................................................................................................16

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Introduction
The primary purpose of the paper is to identify three strategic management approaches that help
organizations to enhance their productivity and profitability. The strategic management
approaches present different perspectives on how the process of strategic management takes
place within an organization. The paper will not only discuss the benefits of implementing
strategic management approaches but will also focus on the limitations of these approaches.
Moreover, the implementation of these approaches is based on the principles of perspective,
position, pattern, play, and plan. Therefore, the paper will discuss the approaches with the help of
relevant examples.
Description of three approaches
Approach History Suggested
Benefits
Limitations An organization
for an example
Hierarchic
al
approach-
Grant
Butler
MGT
approache
s
A hierarchical
approach is
determined to be a
formulating strategy
that focuses upon
the flow of
information among
the levels within an
organization.
Formulation of
strategy becomes
stratified when
different levels
within the
organization's
processes as well as
collect the data that
is considered to be
This particular
approach allows
the business unit
managers in each
of the industries
to develop
business-level
strategies that
help them to
compete
strategically and
effectively
(O’Brien, Jones
and Mirkin,
2016). As a
result, the
division level
managers of the
While
implementing a
hierarchical
approach, there
possess various
limitations such
as limited
communication
among the
hierarchical
levels of the
organization
leads to lack of
incorporation of
strategic
objectives. This
results in the
occurrence of
IBM makes
efficient use of a
hierarchical
approach to
integrating its
computer
application
systems. With the
implementation of
this, IBM enables
the employees to
share information
and ideas across
any department or
role and
communicate with
managers and
executives. As a

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appropriate to that
particular level
(Barbosa et al.,
2015). Based on this
particular approach,
strategy normally
refers to be a
strategic demand
from a higher level
that has provided its
expectations to the
next lower level.
Usually, the
hierarchical
approach is utilized
in huge, and highly
diversified
organization where
corporate level
strategy is highly
focused on
recognizing
industries where the
organization possess
the ability to
compete with its
competitors.
Although this
approach is
inflexible, it is
simple as the
organization
implement those
strategies at a
functional level,
such as design,
purchasing, and
marketing. This
approach
provides a
benefit of
formulating the
strategies at the
corporate level,
functional level,
and business
level. Another
benefit is that the
organizations
that implement
this approach are
well-coordinated
and efficient as
the lines of
authority are
clear. It helps the
higher level of
authority within
the organization
to make
appropriate
decisions to the
different level of
strategies
competing with
each other for
achieving
resources. In
today's business
context,
immediate
adaptability to
varying
consumer
requirements and
changing
conditions
becomes highly
significant
(Tseng, Lim and
Wong, 2015).
However,
another
limitation is that
the hierarchical
approach does
not respond to
such conditions
quickly as the
decision-makers
are remote from
the working
level
result, IBM serves
each employee
within the
organization with
computer
hardware.
However, a
hierarchical
approach is used
by IBM to
mainframe its
DBMS system. It
helps the
organizational
employees to
become self-
governing and
self-organizing in
order to
accomplish their
work. Moreover,
based on this
particular
approach, it
provides
appropriate
feedback to the
employees related
to their
performance to
meet the

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STRATEGIC MANAGEMENT
relationship is
confined to more
than one
relationship. This
approach is also
considered to be a
traditional
organizational
approach that
examines the
performance of the
individuals working
into a group under
the guidance of a
manager. Members
of hierarchical
organizational
structures interact
largely with their
immediate
subordinates and
immediate superiors
(Cuenca et al.,
2018). The
hierarchical
approach is designed
to minimize the
communication
overhead by limiting
the flow of
information. This
lower level
authority. It also
helps in
structuring the
job-related
functions by
adding more
flexible
structures for
executing work.
The
implementation
of the
hierarchical
approach enables
the
organizational
manager to
provide enough
resources to the
team members to
help them to
complete their
tasks. As a
result, the team
members are
rewarded with
promotions,
evaluations, and
increased pay
through the
perspective. In
order to balance
the
organizational
structure
effectively, it is
significant for
organizations to
combine
hierarchical
components with
modern, flexible
structures.
Within the
changing
marketplace, this
approach reacts
slowly at
different
working levels.
The hierarchical
approach is
limited to keep
track records of
the employees
and to meet
formal
regulations to
consumers,
suppliers, along
with the
organizational
goals (Duan et al.,
2018). This
approach helps the
management and
the employees to
adapt to changes
within the market
environment
constantly. With
the help of this
approach, the
employees report
the work to the
hierarchical
manager for
organizational and
disciplinary
matters. This
approach helps
IBM to access
communication
and information
through digital
means. It enables
the flow of
authority and
power to be based
on a hierarchical
level.

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particular approach
has been criticized
and opposed by
many people,
especially political
philosophers.
hierarchy
(Dolega, Pavlis
and Singleton,
2016). The
significant
beneficial aspect
of hierarchical
approach is the
development of
clear command.
employees.
Revolution
ary
approach-
Grant
butler
strategic
MGT
approache
s
The revolutionary
approach is
determined to be a
formulating strategy
that has been
established in the
1990s by Markides
and Hamel.
According to them,
this approach is
considered to be a
part trial and part
planning as well as
error until an
effective approach is
recognized (Hira,
2017). For this
approach, planning
is essential and
helps in eliminating
irrelevant options
This approach
provides various
benefits to the
organizations as
it enables the
organizations to
process
controlled
experiments to
recognize
successful and
unique
strategies. It is
beneficial as it
allows the
organizational
members to
make relevant
and immediate
decisions based
on organizational
The
implementation
of this approach
restricts the
organizations to
increase their
opportunity cost
as the
employee's
works on
compulsory
improvement. It
forces the
employees to
work like a
robot. It puts a
negative impact
on their
performance.
However, the
employees are
Tesla implements
a revolutionary
approach to direct
its customer sales
model that enables
consumers to buy
cars directly from
Tesla. It creates
pressure for
traditional dealers
to become
innovative about
sales. Based on
this approach,
Tesla has created a
mobile app and
shared fleet that
enables the
consumers to add
their cars on Tesla
shared fleet. This

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STRATEGIC MANAGEMENT
and facilitate
structure and
information. For the
emergence of an
effective creative
and effective
strategy, it becomes
significant to
involve the
proportion of the
organization in
strategic thinking. It
is designed to
identify the factors
that affect the
external
environment. Most
of the organizations
implement this
approach when they
are facing a real
threat from the
competitors and
difficulty in gaining
new opportunities
within the market.
The change that
takes place within
an organization with
the implementation
of this approach is
activities. This
approach enables
the team
members within
the organization
to adapt to the
change that takes
place (Pantano,
Priporas and
Dennis, 2018). It
is also helpful in
managing annual
reports and
resumes. It
allows the senior
management of
the organization
to engage with
the employees in
order to
understand their
needs. It also
helps the
organizations to
implement
innovative
strategies for the
betterment of the
organization
along with its
employees. It
shifted to a
different role
that makes the
employees leave
their job due to
tremendous
pressure and
restrictions from
the top level
management
team. Most of
the time, it limits
the acceleration
of the
achievement of
strategic
initiatives within
a continuously
changing
environment.
Due to such
limitation, this
approach fails to
drive the needed
organizational
change to
enhance the
success of the
business (Amin,
2017). Based on
the
decreased the
actual cost of
ownership by 5 to
10%. As a result,
with the help of
this approach,
Tesla is
transforming itself
from an
automotive
organization to an
energy innovation
company. This
approach also
helps the company
to produce cars in
huge quantities by
hitting the
ambitious
timelines. It
supports the
company to
mitigate the
difficult problems
that arise within
the organization.
However, with the
new ongoing
innovation, the
company has
announced to

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forced down,
dramatic, and quick.
The revolutionary
approach is
developed
collaboratively by
the philosophers.
The revolutionary
approach is
reversible and fast,
depending upon the
powerful external
and internal factors.
Implementation of
this approach is
essential for the
organizations as it is
always inevitable
(Erturk, 2017). The
organizations that
implement the
revolutionary
approach are
capable of
overcoming with the
external shocks. It is
established by the
philosophers to
enhance the
transformation of
organizational
supports the
organization to
control the poor
management of
the
organizational
structure.
Implementing a
revolutionary
approach is
beneficial as it
avoids the
occurrence of
internal politics
within an
organization. It
is extremely
beneficial at the
time of
developing
external
communication
and reports.
implementation
of this approach,
there is a
limitation of
related ideas and
reengineering
resources that
directly puts an
impact on
business
operations. This
limitation also
influences the
decision-making
process of the
organization. It
also limits the
usage of the
value-added
system that is
significant to
recognize the
customer-base.
explore the
production of
electric vehicles
(Śmigielska and
Orzeł, 2015). This
utilization of this
approach allows
the employees to
execute their work
systematically and
effectively.

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activities and
leadership. It helps
in making empirical
and theoretical
contributions to the
organizational
success factors.
Based on this
approach, it
becomes significant
for the team
members within the
organization to
understand the
primary purpose and
objectives of the
organization.
Resource-
based view
approach-
Hubbard
Approache
s
The resource-based
view was
established in 1984
by Wernerfelt to
develop a solid
foundation for
business policy
theory. This
approach focuses on
the industry by
leveraging
organizational
resources (Campbell
and Park, 2017).
This approach is
applied by the
organizations for
the assessment
of their existing
resource
portfolio to
expand their
business into
new product
markets. It is
beneficial as it
serves a
direction for the
The
implementation
of this approach
is limited, as it
only provides
information
based on the
static analysis of
an organization.
This approach is
unable to address
the external
issues such as
how the
Tesco makes
efficient use of this
approach to target
the specific market
segments like,
senior citizens,
students, and
young families by
introducing
customer loyalty
card. The well-
organized brand
name of Tesco
helped them to

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STRATEGIC MANAGEMENT
The resource-based
view has been
developed based on
the assumption that
a particular set of
resources are made
available to every
organization. It is
designed to manage
the intangible and
tangible assets and
develop a defensible
and unique portfolio
of capabilities to
sustain competitive
advantage.
Currently, this
particular approach
is determined to be
an appropriate
strategy that helps in
overcome the
imbalance created in
the 1980s.
According to
Wernerfelt,
analyzing the
companies based on
their resources
would result in
insights that
organization's
strategy and
perceives the
value derived
from
administrative
processes,
information
capabilities, and
management
skills (Tang, Lai
and Cheng,
2016). It also
helps the
organizations to
enhance its
financial
performance,
such as market
share, increased
sales, and higher
profits. With the
help of this
approach, the
organization
utilizes its
capabilities and
resources to
generate a
sustainable
competitive
competition will
be created in the
future. It also
fails to address
the internal
issues like, how
the existing
resources have
been developed
and how much
necessary is the
development of
future resources.
It is considered
to be a value-
creating resource
as it limits
competition.
Another
significant
limitation is that
the valuable
resources of an
organization are
surpassed by the
competitors that
result in
transitory (Jin
and Edmunds,
2015).
Therefore, the
develop a strong
consumer base. To
implement a good
strategy, the
company possess
financial
resources. The
knowledge they
received from
Tesco Clubcard
enabled them to
serve excellent
customer service.
To customize the
services or
products, the
organization
utilizes extensive
data related to
customers
shopping habit.
The company
utilizes its current
retail stores as
distribution
centers. This is
determined to be a
major resource
used by the
company to
implement its

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STRATEGIC MANAGEMENT
differentiate from
conventional
perspectives. To
identify the
resources required to
create a sustainable
competitive
advantage, Barney,
in 1991, developed
this concept further.
Based on this
approach, more
emphasis is given to
the features of
advantage that
creates resources.
Such resources are
classified into three
groups they are,
organizational
capital resources,
human capital
resources, and
physical capital
resources. This
approach focuses on
the ability of an
organization to
generate innovative
results along with
the increased value
advantage that
leads to normal
profits and
superior value
creation. The
organizations get
benefit from the
implementation
of this approach
as it serves a
highly
innovative
research and
development
team. It is
beneficial as it
enhances the
knowledge of an
organization's
ability to
innovate and
renew its
resources (Yunus
and Michalisin,
2016). It
facilitates a
framework for
HR personnel to
understand the
strategic
management of a
durability of the
resources is risky
as the core
competencies
earn temporary
profits due to
their limited life
span. The
innovative
activities created
by the
organizations are
limited due to
the unavailability
of the financial
resources.
However, a
competitor may
receive
information on
the projects
based on
research and
development and
as a result, may
lose control over
their creations.
online strategy.
This approach
greatly helped
Tesco to facilitate
the rollout of their
online services.
With the
implementation of
this approach,
Tesco has divided
each supermarket
into six divisions,
such as frozen
foods, chilled
food, bakery, and
groceries (Ghozzi
et al., 2016).
Therefore, this
approach has
helped Tesco to
gain market share
in new segments
without building
new stores.

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STRATEGIC MANAGEMENT
(Schu, Morschett
and Swoboda,
2016). This
approach is created
to fulfill the four
aspects, such as non-
substitutability,
inimitability,
rareness, and value.
company.
Conclusion
The paper demonstrated an understanding of three approaches, such as the hierarchical approach,
revolutionary approach, and resource-based view approach. It has been observed that a
hierarchical approach is used by the organization to facilitate information to the organizational
members. Whereas, a revolutionary approach is implemented by the firms to adopt innovative
strategies. On the other hand, the resource-based view approach is used by the firms to gain a
better understanding of the resources used by the organization. The paper also discusses the
significant limitations of these strategic management approaches. Therefore, the implementation
of these approaches helps the organizations to gain sustainable competitive advantage.

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STRATEGIC MANAGEMENT
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Appendices
Appendix A
Figure: Hierarchical approach
(Source: Martino et al., 2017)
Appendix B

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STRATEGIC MANAGEMENT
Figure: Revolutionary approach
(Source: He et al., 2015)
Appendix C

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STRATEGIC MANAGEMENT
Figure: Resource-based view approach
(Source: Liu, Zhu and Zhang, 2018)