Strategic Management: Stakeholder, Dynamic, Sustainable Approaches

This report delves into the realm of strategic management, emphasizing its crucial role in guiding companies towards sustained competitive advantages. It meticulously examines key approaches, including the stakeholder approach, dynamic capabilities, and sustainable development. The report pr...Read More

Running head: STRATEGIC MANAGEMENT
Strategic management
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Executive Summary
This report focuses on strategic management of companies. It is seen that strategic management
aids the companies to gain an insight on its present environment through assessing its business
goals, and schemes. Its main purpose is to help the companies to retain their comparative edge in
the current market. This report sheds light on stakeholder approach, dynamic capabilities and
sustainable development. The benefits and limitations of each of these approaches are covered in
this particular study. This study throws light on viability of stakeholder approach, dynamic
capabilities and sustainable development. Apart from this, implementation issues of all these
approaches are covered in this particular study.

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Table of Contents
Introduction......................................................................................................................................3
Stakeholder Approach.....................................................................................................................3
Dynamic capabilities.......................................................................................................................5
Sustainable Approach......................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Introduction
Nowadays, strategic management is considered as a matter of grave importance. It has
been noticed that effective business strategies aid the business organization to survive in the
existing competition of the market. It is seen that strategic management helps the organizational
management to undertake significant business decisions that will aid the companies to sustain
their advantageous position in the existing market. In accordance with the opinion of Rothaermel
(2015), strategic management means the creation as well as the implication of main goals as well
as initiatives that are undertaken by an organization’s top managers, on the basis of available
resources. As opined by Wheelen et al. (2017). Strategic management also evaluates competitive
environment as well as assesses the business strategies. The significance of strategic
management lies in understanding the business objectives and schemes of the companies.
In the opinion of Ginter(2018), strategic management concentrates on the long-term
planning. Effective strategic management paves the growth of the business organizations. From
the perspective of Hill, Jones and Schilling(2014), fruitful strategic management aids the
business organizations to increase its overall productivity and profitability. In other words,
strategic management is required for managing the business strategies so that it becomes easier
for different business organizations to sustain their comparative edge in business. In this
particular study, concepts of different approaches such as stakeholder approach, sustainable
approach and dynamic capabilities are explained in this particular study. The benefits and
limitations of every approach are covered in this particular study. This study also throws light on
the viability of these approaches.

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Stakeholder Approach
In accordance with the opinion of Lasserre ( 2017), stakeholder approach is such an
approach which helps the company’s management to create as well as implement procedures,
that satisfies the needs of stakeholders with the intention of ensuring company’s long-term
success. It has been observed that stakeholder approach if applied properly within the
atmosphere of business organizations, it will bring innovation in its working procedures through
building fruitful business strategies.
It has been noticed that by taking assistance of the different stakeholders, it is possible for
the business firms are using imperfections existing in the market as an advantages through
building fruitful strategies(Bettis et al. 2016) . Moreover, it is the responsibility of the managers
working at different companies to satisfy its shareholders in order to achieve the targeted
business goals. In the opinion of Daspi et al. (2017), The implication of stakeholder approach
can strengthen the values of the business firm and formulate comparative edge. In this context, it
can be stated that this approach creates a connection between the business organization and
stakeholders including managers.
From the perspective of Michael, Storey and Thomas( 2017), the stakeholders of the
firms aligns their personal values with the values of the organizations thereby enhancing the
organizational performance and efficiency. This is applicable for the managers also as they are
also shareholders of the companies. In this context, Frynas and Mellahi (2015) commented that
manager need to align the formulated strategies with the organizational values as well as values
of the stakeholders. This approach of the managers will increase the organizational productivity
as well as profitability. It is seen that by aligning the strategies and values with organizational
goals, it is possible for the managers to achieve success in strategic management. As a result,

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brand loyalty of its stakeholders including managers and customers will be increased. It has been
noticed that firms adopting this particular approach will be able to enhance its core competencies
thereby increasing the effectiveness of the strategic management. It has been observed that job
satisfaction of the workforce creates a direct impact on company’s capability to incorporate
innovation within the working process of the company ( Morden 2016).
Satisfied Employees including managers engages them in the long-term thinking. They
also gets involved in generating valuable ideas, which helps the company’s top-level
management to formulate and apply those strategies within the workflow of the respective
organization. It has been noticed that there are high chances that difference of opinions might
occur among stakeholders at the time of decision-making processes. Each stakeholder wants to
care about their own interests. In other words, these stakeholders seem to fulfil their own needs
rather than thinking about the company’s benefits. From the perspective of Morden (2016),
difference of opinions among the stakeholders might give rise to conflicts thereby lowering the
productivity of the respective organization (Shrestha et al. 2018) In this context, it can stated
that it becomes very difficult for management working at different companies to implement this
particular approach in the working process. As a result, productivity of the company gets
hampered in the due process. This is one of the issues that are faced by managers while
implementing stakeholder approach. As opined by Pascual et al. (2017), interests of one
stakeholder differs from another stakeholders. Therefore, it becomes difficult for managerial
section of the company to cater and fulfill interests of all the stakeholders. In other words,
conflict that takes place between various stakeholders delays the managers to undertake strategic
decisions or create fruitful strategies. These are the limitations of strategic approach. It is seen
that customer as a stakeholder impacts on the strategic business decisions.

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It is seen that the managers working at companies want to satisfy its customers by
providing their desired products. Besides, they makes a constant effort to provide best-quality
customer service. In this context, it can be stated that the main purpose is to strengthen their
relationship with its customer base. In other words, long-term relationships between management
and customers are key to success thereby retaining the competitive advantage of the market. It
has been observed that employees are considered as valuable assets by the management of the
companies. In order to retain the skilled professionals for a long time, it is required for the
companies to motivate the employees to take part in the decision-making procedure. In this
regard, Pascual et al. (2017) commented that it is needed for the managers to allow the
employees to share their ideas or thoughts in front of the hierarchy without any hesitation.
After analyzing the viewpoints shared by the skilled workforce, it is possible for the
managers to create best strategies or formulate strategic plans thereby fastening the decision-
making process (Frynas and Mellahi 2015). In addition to this, it is the responsibility of the
managers to provide a non-discriminatory environment and flexible working environment to its
skilled professionals. Daspit et al. (2017) commented that this approach of the management will
motivate the employees to meet their individual targets as well as the strategic goals and
objectives of the business firms. Improving the relationship with suppliers, is required for
achieving success in business.
Dynamic capabilities
In accordance with the opinion of Khodyakov et al. (2017), stakeholders have their
interests in the business firm and they can either influenced or be influenced by the company’s
activities, goals and policies. According to Aziz et al. (2017) stakeholders invest their capital in
the business firm whose activities decides the results of the business decisions. In this context, it

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can be stated that influence as well as power of the stakeholders can create an impact on the
success and failure of the strategic initiatives.
In the opinion of Segarra‐Oña et al. (2017), project manager, project team, sponsors,
consumers and functional management are considered as stakeholders of the respective
organization. There are other stakeholders such as government, rivals as well as the environment.
Stakeholders are classified into primary stakeholders, secondary, internal stakeholders and
external stakeholders. It has been observed that primary stakeholders are directly influenced by
the results of any project. It is seen that customers, end users, project sponsors, team members as
well as project managers are the primary stakeholders.
In the opinion of Ren (2018), project sponsors need to offer feedback as well as make
decisions about project implication. It has been noticed that sponsors are subjected to allocate as
well as supply the resources. It is the responsibility for the sponsors to finance for funding the
project. The sponsors need to have a clarity in understanding about the scope, schedule as well as
resources required for the success of the project. It is seen that customers support the business
firm by purchasing items from them. On the other hand, Kerzner and Kerzner (2017) commented
that company gets a clear idea on what kind of goods they have to manufacture and what amount
of capital they will have to invest.
Secondary stakeholders assist with the administrative procedures, financial as well as
legalities. In order to achieve the objective, it is required for the primary as well as the secondary
stakeholders to work in a collaborative and coordinated manager. Project managers as an internal
stakeholder are assigned with the responsibility of developing a project. Project managers are
assigned with the responsibility of organizing as well as planning of the project. They are
assigned with the responsibility of supervising the entire project. It is seen that vendors, suppliers

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as outside business firms are considered as external stakeholders. Team members are termed as
direct stakeholders because these individuals are concerned with everyday actions of the
project.
According to Khodyakov et al. (2017), stakeholders can create a direct impact on the
strategic decision-making process. It has been observed Customers directly influences the
decision-making process of any business firm. Without getting any kind of support from the
potential customers, it is not possible for the company to continue its business in the long run.
Moreover, it is the primary responsibility of the company is to provide their desired goods and
services. By fulfilling their demands, company can increase their satisfaction level, that will
help the company to meet its long-term goals. In addition to this, an honest conversation should
exist between organizational managers and customers thereby helping the company to build and
implement strategies that will help them to sustain their advantageous position in the existing
market.
It has been observed that internal stakeholders offers their mentoring advice to the
owners of the company. In the opinion of Bouzon, Govindan and Rodriguez (2018 ),
stakeholders acts as a guide of the company so that they can prevent the business firm from
incurring huge financial loss. Apart from this, Simeone, Secundo and Schiuma (2017)
commented that they can anticipate bigger problems while the business firms are continuing their
business operations. Therefore, this ability to foresee things acts as an advantage for the
company owners. As opined by Khodyakov et al. (2017)), managers need to consider their
employees as valuable assets of their company. It is the responsibility of the managers to retain
the workforce for a prolonged period in order to attain the long-term objectives of the company.
For this purpose, they need to improve the working conditions and they have to develop the pay

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structure. In addition to this, non-discriminatory environment should be provided to them. These
are some of the techniques by which employees can be retained in the business firm for a long
time thereby increasing the productivity of the firm.
Apart from this, Daspit et al. (2017) asserted that management should engage the
employees to actively participate in the decision-making process where they can freely share
their opinions based on which effective strategies would be created and implemented by the
management of different business firms. In this regard, Kerzner and Kerzner (2017) commented
that this approach is capable of increasing the effectiveness of strategic decision-making
procedure. It is needed for the management to maintain good relationships with its suppliers and
vendors as they indirectly affects the decision-making process.
It is seen that it is beyond the capability of the management to please each and every
stakeholder of the companies. It has been noticed that stakeholders often argue among
themselves regarding returns on investment along with high costs. Therefore, disagreements
among the stakeholders often compels the management to take wrong decisions. Not only this, it
also causes delay in decision-making process. This is one of the major implementation issues
faced by the managers while they are applying dynamic capabilities in their workflow. From the
perspective of Simeone, Secundo and Schiuma (2017), sometimes management gives importance
to the values or ideas of any one stakeholders, which makes other stakeholders angry or
disappointed towards the management of the company. In accordance with Bouzon, Govindan
and Rodriguez (2018), inequal distribution of power and status among the stakeholders can
create conflicts among them . In this context, it can be stated that conflicts among these
stakeholders can create adversely affect the decision-making process. These are the limitations of
the dynamic capabilities. Khodyakov et al. (2017)

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Sustainable Approach
In accordance with the opinion of Daspit et al. (2017), sustainable approach conducts the
economic growth without depleting the natural resources. In other words, according to the
definition of Brundland report, “Sustainable Development is a development that
meets the needs of the present without compromising the ability of future
generations to meet their own needs.” In the opinion of Pascual et al. (2017),
environment, society as well as economy are the important components of sustainable approach.
The main purpose of sustainable development goals is to eradicate poverty, protect the
environment as well as ensuring enjoyment, peace along with prosperity for every individual
(Shrestha et al. 2018). There are certain advantages and disadvantages of sustainable
development.
In the opinion of Ren (2018), reducing waste is one of the primary aims of the sustainable
environment. It has been observed that sustainable development causes the organizations to
improve their brand image in the eyes of its customers. From the perspective of Aziz et al.
(2017), maintaining the ecological balance is one of the important goals of sustainable
development. In addition to this, the companies can enhance their overall productivity and
profitability by incorporating sustainable approach in their working procedure. Depending on the
strategies, cost of investment might vary. This can be regarded as the disadvantage of sustainable
development. In accordance with the opinion of Segarra‐Oña et al. (2017), it is seen that cost of
manufacturing environmentally sustainable goods is comparatively higher than other goods and
services. This is another disadvantage of sustainable development. It has been noticed that
company’s management need to imbibe the concept of triple bottom line where they would place
equal importance on three Ps such as People, Planet and Profit and accordingly they will take

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strategic business decisions. In this way, sustainable approach affects the decision-making
procedure of strategic management
Conclusion
From the above discussion, it can be stated that proper implication of stakeholder
approach, sustainable approach and dynamic capabilities can maximize the profit of the
companies. In this context, it can be stated that proper implication of stakeholder approach,
sustainable approach and dynamic capabilities can help the various business organizations to
sustain their advantageous position in the existing market. It has been observed that the
stakeholders are aligning their individual values with that of the values of the companies. This
approach enhances the overall performance along with efficiency of the companies. It has been
noticed that if the company successfully imbibes the triple bottom line within its working
procedures, then it is possible for them to undertake significant strategic business decisions
thereby retaining its comparative edge in the current market. This is how sustainable approach
affects the strategic management.

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