Strategic Management: Exploring Diverse Approaches - A Report

This report provides an in-depth exploration of alternative approaches to strategic management. It begins by defining strategic management and outlining the current linear approach. The core of the report focuses on three key approaches: the stakeholder approach, the dynamic approach, and the sustainable approach. The stakeholder approach emphasizes the importance of considering the concerns of various stakeholders, such as shareholders, customers, and employees. The dynamic approach highlights the firm's ability to adapt to a changing environment through building, integrating, and reconfiguring internal and external competencies. The sustainable approach focuses on the conservation and improvement of natural resources and the environment. The report uses Wesfarmers Limited as a case study to illustrate the practical application of these strategic approaches. It also explores the evolution of these approaches, their underlying concepts, and their implications for organizational success. The report concludes by summarizing the key findings and emphasizing the importance of adopting a comprehensive and adaptable approach to strategic management in today's dynamic business environment.

Alternative Approaches to Strategic management
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EXECUTIVE SUMMARY
Strategic management is demarcated as the art as well as the science of formulation,
implementation and evaluation of cross-function decisions that help the organization attain
their intended objectives. The report seeps through the understanding of different strategic
approaches. The current linear approach in this setting derives up with the different measures
put forth to have the ability to make a feasible accomplishment in the general strategic
management. The aim of stakeholder management was to apprehend the concerns of
shareholders, customers, suppliers, employees, society and lenders, in order to establish
objectives that the stakeholders would support. Indeed this support guaranteed the long-term
success. Under this theory, four more concepts were developed, i.e., corporate planning,
CSR, system and organizational theory. Dynamic capability is the firm's ability to build
integrate and reconfigure the internal as well as external competencies to tackle the
constantly changing environment. The strategic management is recently inclined towards
sustainability. This strategic approach focuses on conserving, protecting, restoration and
improvement in the conduct of organization to maintain the quality of natural resources and
the environmental media.
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TABLE OF CONTENTS
Introduction..............................................................................................................................4
Current Linear Approach.......................................................................................................4
Approaches to Strategic Management...................................................................................5
Stakeholder Approach............................................................................................................5
Dynamic Approach................................................................................................................7
Sustainable Approach.............................................................................................................8
Conclusion.................................................................................................................................9
References...............................................................................................................................11
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INTRODUCTION
Strategic management is demarcated as the art as well as the science of formulation,
implementation and evaluation of cross-function decisions that help the organization attain
their intended objectives. Strategic management is associated with the scanning of
environment that will require a whole creation of the manner of collection, undertaking
scrutiny and serving information, which helps in meeting the strategic managerial aim. The
next step that comes into being is the strategy formulation, which is a tool that helps in the
overall process of undertaking decision, which performs the best way of accomplishing
organizational goals (Hill, Jones and Schilling, 2014). A few such objectives play a part in
the overall outcome as it belongs to the common areas of environmental scanning. The other
steps followed up are strategic implementation and later strategy evaluation to create all
activities as a viable tool of management. Thus, strategic management is a comprehensive
concept that uncovers all functional areas of the organization. This is one of the key concepts
that direct, the unity of an organization or business by serving as a clear form of direction in
general alignment. There are distinctive approaches associated with this tool thus providing a
broad outlook to the organizational issues. In the current study, the focus is on understanding
the concepts and highlighting upon how it accrues to the well-founded success of the
organization. Some of the areas that are given due consideration in this report are a current
standard linear approach to the problem as well as aesthetically crafted approaches of
strategic management. As for a deeper understanding, the strategic approaches
implementation shall be in due parlance to Wesfarmers limited stating its key strategies that
triggered the adoption of approaches.
Current Linear Approach
The current linear approach in this setting derives up with the different measures put forth to
have the ability to make a feasible accomplishment in the general strategic management. A
few steps that the current linear approach will require is the skill of conducting the
environmentally scanning stage as this will indeed help in assessing out the desire of
gathering the information and devising scrutiny into each aspect of the project (Godet, 2011).
Nonetheless, there are factors, which can, in turn, affect this stage influencing it to end up,
noticeably at least successful and this will be including the execution of environmental basis
features, which will have a general inference to endeavour and enhance it.
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It is one of the means that is followed intently to craft the strategic formulation; it arises as a
consequence of the necessity to undertake clear decision making in the strategy. It is a phase
where a large portion o the procedure endured come to create the prime objective of the
organization; it is the very next step after the scanning of the environment. The other stages
that follow up the strategic implementation are one of the fundamental outcomes to make an
essential enhancement in general procedure. It shall entail the organizational structure which
plays a strong role in the utilization of setting up all the general structure in such a manner
that it makes an adequate calculation of the distribution of resources and process of managing
the human resource in its long run (Noland and Phillips, 2010). A close watch for this entire
approach is in the strategic evaluation, being the final step but the most crucial one to mark
an outcome, which is going to create an appraisal to all the internal factors of business and in
doing as such the performance can be evaluated and correct diversion can be made upon the
concepts. This approach can be attributed to a downfall in the event that one of the areas
considered is not properly managed, this indeed makes all stages interdependent on each
other.
APPROACHES TO STRATEGIC MANAGEMENT
Stakeholder Approach
The stakeholder approach to strategic management has evolved in the mid-1980s. The drive
towards stakeholder management was the attempt to build up a framework, which was
responsive to the management concerns, which was knocked down due to the unprecedented
levels of the environmental change and turbulence. The traditional strategies were neither
assistive to managers for formulating new strategies nor were they assistive in understanding
how to grasp new opportunities in the middle of such changes. Thus, the traditional approach
was not consistent with both quantity and types of changes, which were arising in the
business environment during the 1980s (Gold, Seuring and Beske, 2010). This impeded the
need for the development of new conceptual framework a stakeholder approach that was
striving to respond to the challenges. The ‘stockholder’ approach further broadened the idea
of strategic management beyond their traditional economic roots by encompassing a group of
individual who is either affected by or has to potential to affect the accomplishments of
organization objectives. The aim of stakeholder management was to frame a method to
administer the untold groups and relationships, which had ensued in a strategic fashion. As
argued by Freeman (2010), that managers are required to apprehend the concerns of
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shareholders, customers, suppliers, employees, society and lenders, in order to establish
objectives that the stakeholders would support. Indeed this support guaranteed the long-term
success. Hence, it was imperative that management acted spontaneously towards exploring
their relationships with the stakeholders in order to establish business strategies. Wesfarmers
Limited effectively realises that stakeholder needs are of paramount importance. Each
division at the company shares a healthy communication with their stakeholders in the aptest
manner for their business, further taking into account the needs and wants of stakeholders
group.
The stakeholder concept survived and developed from the corporate planning, corporate
social responsibility, system theory and organizational theory. The corporate planning entails
of the different planning to meet the needs of stakeholders in order to obstruct the limits on
actions of the firm. Under corporate planning, stakeholder analysis is carried out as a part of
environmental scanning. Thus, corporate planners can carry out stakeholder analysis at a
generic level without being specific (Stead and Stead, 2013). At the group level, Wesfarmers
consider the interest of wide cross-section stakeholders, determining the actual or potent
impact of their interest in their business. So as to guarantee returns to the shareholders,
Wesfarmers has the target of building up a special, trained and highly engaged working
society in their association. The moral standard of the organization is not about just the
estimation of the investors but also the organization is additionally worried about the
estimation of the clients, workers, providers and other group accomplices.
Further, the system theory is a bit complex theory as it emphasizes on the external links,
which are a part of every organization. Thus, the recognition of the need for stakeholders and
interconnection of them with the open system is a critical aspect of this approach. Thus,
system theory stress on developing collective strategies, which optimises network. Also, the
organization theory stems from the same roots of system theory. Organizational theory as
proclaimed by David (2011), as the organization is relative to the system it is bounded by.
The intent behind the organization theories is to describe the existence and nature of the
organization. To continue creating value for a long-term, Wesfarmers is committed
proactively towards managing the community and their environmental impact. They
acknowledge the environment’s volatility and the potential impact.
Though most of the stakeholder analysis is conducted at a generic level, but the catastrophic
damage to corporate reputation as a consequence to various high profile cases. Corporate
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social responsibility initiative was undertaken by an organization to ensure that the viewpoint
of all stakeholders is considered equally important as a moral standing (Elms et al. 2010).
Wesfarmers is committed to delivering solutions that help in continuously improving
performance and publicly report on the progress on their social responsibilities.
Dynamic Approach
The key notion behind the field of strategic management is how firms sustain and attain the
competitive edge. This is indeed elaborated by the concept of dynamic capabilities approach.
As advocated by Lasserre (2012), the dynamic capability is the firm's ability to build
integrate and reconfigure the internal as well as external competencies to tackle the
constantly changing environment. The dynamic capabilities are much more than the
operational capabilities as it pertains to the current operation of the organization. Dynamic
capabilities refer to the capacity of the organization to generate, extend or modify its base of
resources. Its basic assumption is that the core competencies should be employed to modify
the competitive position in short run which can be further used to build a competitive
advantage in long-term.
They look to meet the new challenges of building the employees as core strategic assets.
Further the strategic assets such as technology, customer feedback etc. are also integrated
within the company. To seize the opportunities it important that organization reconfigure
existing strategies to maintain the competitiveness as and when necessary (Slack, 2015).
Wesfarmers has surely identified employees as the competitive advantage and one of the
important strategic assets as it procures a team of talented as well as enthusiastic employees.
Other than strategic assets, learning also requires common codes of communication and
coordinates search process. Learning and improvement are of esteem significance to the
organization as it helps in delivering satisfactory results. Wesfarmers places a strong
prominence on training and career development of their people. They aim at broadening their
knowledge base as well as experience by fostering learnings.
Further, integration is also an important element, as they need to balance between the culture
and systems to meet the external consequences (Barney, 2014). For a strong corporate
infrastructure, it is important a good combination of systems, processes and culture are
maintained with the support of innovation, disciplined actions and sustainable operations.
Wesfarmers have successfully integrated they're objective aligned with shareholders need to
foster their strong upkeep. Further, the production is enhanced by Wesfarmers through strong
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corporate culture by promoting strong working relationships at all levels so that productive
nurture and also a healthy working environment is ensured.
Sustainable Approach
The strategic management is recently inclined towards sustainability as one of the core
strategies which are employed for routinely consideration of decisions and actions as and
when appropriate. This strategic approach focuses on conserving, protecting, restoration and
improvement in the conduct of organization to maintain the quality of natural resources and
the environmental media. Further, it directs on aligning and integrating programs, incentives,
tools and indicators to attain as many positive outcomes as possible economic, environmental
and social systems (Hesterly and Barney, 2010). Attaining sustainability is the most
challenging approach of the 21st century. Yet a lot of organization is applying tools and skills
to fully integrate themselves into good intentions and report as well as evaluate performances
on a routine basis. Embedding of sustainable development is a complicated task as the issues
are sharply in the contract and often argued. Nonetheless, the approach takes an inclusive
approach to stakeholder involvement as well as empowerment. It also takes into
consideration the long-term view.
According to Hill and Jones (2011), it is a prospective strategic approach for the sustainable
business practitioner as a balanced system and value approach. It uses system approach
because of its consideration of the external environment. Sustainable business practices are
much more than just cost; it is a beneficiary act or good public relations for business it is
indeed a source of competitive advantage (Hodgkinson and Healey, 2011). Sustainability is a
new way to glance about the connection between business and society wherein a balance is
required to maintain between corporate profits and social well-being. It is thus, important to
perceive social responsibilities paying more attention to sustainability as a worthy prospect
that considering the same a damage control.
The sustainability of Wesfarmers report reveals it has enhanced transparency of their supply
chain with about more than 3200 factories in its audit program. Since Wesfarmers has
believed in the strong business environment by underpinning a unified and inclusive
community setting for this, it directly and thoroughly supports their customers and team
members. Further, it acknowledges the changing environment and has managed the risks by
most aesthetically responding to them. Wesfarmers has also committed itself towards
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minimizing the carbon footprints and delivering a solution to progress in their sustainability
reports.
CONCLUSION
The different approaches to strategy are the competitive forces that help deal with problems
through complementary actions. To be strategically strong the approaches are honed,
uniquely crafted and utility-driven which enable organizations to remain competitive. These
approaches are incredibly complex and can lead to mixed experiences but help in to see
through business significantly from a broad perspective. It is also observed that not all
strategic approach are known it is important that organization develop skills to move into the
strategic domains to derive adequate strategies for dealing with external organizational
problems adequately. Also, an organization can use as many approaches to derive the apt
solution to problems. Indeed the nature of approach help in analysing the source as well as
methods that could help entail the sources and methods for effectively reacting the rapidly
changing environmental scenario like technological innovation, sustainability matters etc.
There are multiple benefits of strategic approaches, for instance, it helps in the exploration of
new opportunities. As these approaches are forward-looking concepts which can help
organizations to indulge in strategic planning and allow firms to take an objective view of the
future and draft activities that are to benefit the organization and extremely worthy (Lasserre,
2012). It helps in preparing for tangible benefits like engaging in those activities that are
profitable by taking informed decisions. Apart from the tangible benefits it also provides
intangible benefits as well by increasing employees productivity and certainly realising the
importance of linking the performance with rewards. In the current era, all business realises
the significance of strategic management, and it is important while conducting the approaches
organization ensures the long-term viability and success.
The common issues that are likely to occur in an organization when implanting strategic
approaches are clarity issues, generic, impossible to retrieve, too easy to be competitive,
incongruent etc. Further, the implementation is also obstructed by the management the
difficulty to resist the changes. In the course strategic planning, the lacking in consideration
of realistic components of form could lead to the resultant of weak, inadequate and possibly
unachievable strategies. Weak formation of strategy as a result of unrealistic management
and overly aspirational goals can be consequences for an ill-fitting strategy. This inadequate
assumption could affect the viability of the strategy (Rothaermel, 2015). Thus, the
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organization by developing awareness to the traps and hurdle could lead them to safeguard
themselves to formulate effective strategies. the strategic approach requires a comprehensive
consideration of all factors like resources timely availability, attainability, accountability,
controllable etc. Also, it is important that the people of the organization are trained and
motivated to foster the effectiveness of strategic implementation. Moreover, it is important
that a regular follow-up is maintained for the strategy so executed to keep pace with the
regular market updates.
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