Strategic Management Report: Alternative Approaches and Analysis

This report delves into the realm of strategic management, examining its evolution and the limitations of traditional linear approaches. It identifies and analyzes three alternative strategic management strategies: the stakeholder approach, dynamic capabilities, and the sustainable approach. The report provides a detailed overview of each approach, exploring their core principles and implementation strategies. Real-world examples, such as Apple Inc.'s stakeholder-focused strategy and Exxon Mobil's dynamic capabilities, are used to illustrate the practical application and effectiveness of each approach. The report also highlights the drawbacks of the conventional linear model, emphasizing the need for more adaptable and comprehensive strategies in today's dynamic business environment. The analysis underscores the importance of aligning strategic management with organizational objectives, stakeholder needs, and the ability to adapt to changing market conditions. This report provides valuable insights into modern strategic management practices, offering a comprehensive understanding of the different approaches and their implications for business success. This resource is available on Desklib, a platform offering AI-powered study tools for students.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Executive summary
The strategic management is one of the most important functions of the modern management.
The traditional approaches to strategic management are no longer applicable for the competitive
environment in recent times. The organizations need to adopt alternative approaches to strategic
management. In this report, three alternatives approaches to strategic management are identified.
They are stakeholder approach, dynamic capabilities approach and sustainable approach. The
three alternate approaches to strategic management would prove to be unique and they are
implemented based on the type of industry. The existing drawbacks of the linear strategic
management would be explored in detail. The three alternate approaches would be discussed in
detail along with real world examples of each.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Current standard linear approach of Strategic Management.......................................................3
Three approaches to Strategic Management................................................................................5
Stakeholder approach...............................................................................................................5
Dynamic Capabilities...............................................................................................................6
Sustainable approach...............................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The strategic management is concerned with the formulation as well as implementation
of the goals as well as initiatives of the top management of the company by suitable utilization of
the available resources (Hill, Jones and Schilling 2014). This type of management is done in
consultation with the senior managers and takes into account the internal as well as external
environments. This branch of management is concerned with providing direction to the company
by aligning itself to the organizational objectives. It is also concerned with the achievement of
the objectives and then proper allocation of the resources so that the necessary plans are being
implemented (Hill, Jones and Schilling 2014). There are certain principles underlying the
strategies such as creation of unique market proposition, creation of market fit and alignment of
the company activities with the formulated strategy.
The conventional approaches to strategy management is concerned with the systematic
action plan that is usually being designed a particular goal in the long run (Hill, Jones and
Schilling 2014). The traditional strategic management approaches provides a unique link
between the operation management and the strategic management (Eden and Ackermann 2013).
It was also considerate about the goals of the company and formulates strategies accordingly.
However, there has been paradigm shift in the approaches to strategic management. The final
strategic management strategic management strategy is usually a process of adaption, evolution,
continuity and alternation. This report would identify three alternative of strategic management
namely stakeholder approach, dynamic capabilities and sustainable approach. The real
organizational examples for each of these three approaches would be given and analyzed in
detail.
Discussion
Current standard linear approach of Strategic Management
The current strategic management approach focuses on the analysis of the
internal/external environment, formulation of strategy, implementation of strategy and the
effective formulation of the strategies (Bettis et al. 2016). The traditional strategy management
initiateswith a vision as well as mission for the company, based upon which the internal/external
analysis is done. This analysis is being done with the help of SWOT analysis, the results of
which is thoroughly evaluated and one suitable strategy is chosen for implementation (Peppard
and Ward 2016). The strategic options are analyzed with the help of several tools such as
PESTEL analysis, Porter’s five forces, Ansoff matrix and others. The evaluation process is also
standard and fails to take into account the different aspects of the environmental protocols (Hill,
Jones and Schilling 2014).

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Fig: Traditional approaches to strategic management
(Source: Peppard and Ward 2016)
The current strategy implementation process is a linear one, which fails to consider the
multiple environmental aspects and incorporate them in the strategy formulation (Konrad, Yang
and Maurer 2016). The current approach to strategy management assumes that the external
environment of the organizations is fairly stable and they are predictable in nature (Hill, Jones
and Schilling 2014). The traditional schools of thoughts on the strategic management believe that
the strategies are only means of achieving competitive advantage and gaining a favorable market
position (Guerras-Martin et al. 2014). They also assume that there would be minimal
environmental changes by exploitation of competencies as well as resources. There are several
limitations of the linear approach of strategy management-

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 There is an increasing tendency of the strategic thinkers limit their focus to particular
parameters only. This can be attributed to the increasing uncertainty (Hill, Jones and
Schilling 2014). They mainly rely on the immediate future and internal analysis attributes
only.
 The existing process and tools used in the traditional strategic management have been
outdated and they are not able to keep the pace of change with the existing business
environment. This always leads to lagging results (Hill, Jones and Schilling 2014).
 Traditional strategic plans are often inflexible and they are unable to accommodate the
changing environment of modern times.
 The strategies that are being formulated in a traditional manner are restricted to corporate
vision and objectives (Konrad, Yang and Maurer 2016). This may not include the
changing demands of the external and internal environment.
 Linear strategic management is often limited to the current situation and has limited
scope for future incorporations (Bettis et al. 2016).
Three approaches to Strategic Management
Stakeholder approach
According to Wheelen and Hunger (2017), the stakeholder approach to strategic
management relies on the different actions of the stakeholders that have a direct as well as
indirect effect on the management of the firm. The corporate planning of modern organization
takes into account the various limitations that the stakeholders can impose on the actions of the
firm. It is important to understand the requirements of the stakeholders so that the operational
guidelines can be set (Bettis et al. 2016). The strategy development process is related to the
stakeholder analysis, which is considered as a part of the environmental scan. The stakeholders
are usually defined by the job roles rather than the multifaceted and complex individuals
(Tantalo and Priem 2016). It is important to do stakeholder analysis at generic level, which
would help in the better understanding in their contribution to the organizational decision-
making.
The central concern behind the stakeholder approach is that the managers should
implement appropriate policies which would satisfy all groups of the stakeholders (Bridoux and
Stoelhorst 2014). This process involves the management and integration of the relationships as
well as interests of the different group of stakeholders (Bridoux and Stoelhorst 2014). There can
be number of stakeholders for the company such as customers, employees, communities,
suppliers and all other groups in such a manner so that the long term success of the firm can be
ensured. The stakeholder approach to the strategic management emphasizes on the effective
management of the business environment and fostering the shared interests.
Apple Inc. follows stakeholder approach to strategic management. The company has
taken care of the stakeholders and has impacted the business in terms of revenues and customer
perception. The company has made succinct policies for the betterment of the stakeholders
Tantalo and Priem 2016). For example, Apple addresses the various environmental concerns of
the stakeholders through the effective use of “sustainable material sourcing” policies (Bridoux
and Stoelhorst 2014). Apple also undertakes a large number of CSR activities (corporate social

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responsibility) so that the interests of them are properly addressed. The external stakeholders of
the company are always satisfied and their needs are being met by the company. The company
views the customers as their topmost priority and makes effective products for them Tantalo and
Priem 2016). The decision of the company to make premium price strategy matches with the
customer requirements since this strategy matches with the aesthetics as well as quality of the
products (Weiss 2014). This strategy has been highly successful in the organization as the
company has been able to retain a loyal group of customers who are unlikely to switch the
company.
The success of this approach in Apple shows that the companies can actually adopt the
stakeholder approach to strategic management (Xu and Li 2013). The stakeholder approach aids
in the strategic management process and gives new direction to the firm. The primary concern of
this approach is the survival of the organization in the long run and optimization of the current
output (Tantalo and Priem 2016). It can be concluded that the stakeholder approach is a
continuous approach of balancing as well as integrating the different kinds of stakeholders with
multiple objectives.
Dynamic Capabilities
One of the most innovative approaches to the modern strategic management is the
exploitation of the dynamic capabilities of the firm. As opined by Lin and Wu (2014), the
dynamic capabilities framework analyses the methods as well as sources of wealth creation
which would be beneficial for the company. The dynamic capabilities are being utilized by the
private firms operating in environments facing rapid technological changes. The dynamic
capabilities of a firm can be defined as the ability of the firm to build, integrate, reconfigure and
implement different competencies of the firm so that the necessary changes in the external
environment can be addressed (Chae and Olson 2013). The dynamic capabilities of an
organization reflect the organizational ability to gain new or innovative forms of gaining
competitive advantage.
The modern day organizations focus on their core competencies of the firm such as the
good capabilities of the firm which cannot be easily duplicated by the competitors. It is possible
to enhance the value of the core competencies of the firm by combining the values of the suitable
complementary assets (Teece 2014). It is also important to create some fundamental distinctions
between internal organizations and the markets. It is important to detect the changing elements of
a firm and know how to utilize them effectively (Chae and Olson 2013). The competitive
advantage of the modern day organizations can be seen as the specific processes that are being
shaped by the asset positions of the firm as well evolution of paths that have been chosen by it
(Wadhwani and Jones 2016). The asset positions of the firm is concerned with the
complementary assets of the firm and the “difficult to trade” knowledge assets of the firm (Chae
and Olson 2013). It is important to amplify the path dependencies so that there is existence of the
increasing returns.
The dynamic capabilities approaches to strategic management can be widely seen in oil
and gas sector. Exxon Mobil Corporation uses the “dynamic capabilities framework” to
understand their strategic agility which operates in the high-velocity markets (Cabral 2015). The
managers of the company handle the key challenges of the firm by tackling enhanced demand for

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the different energy resources, increased competition and the shrinkage of global geosciences
talent pools. The dynamic capabilities unite with the strategies of the firm to give empowerment
of the organizational ability to integrate different internal/external competencies (Chae and
Olson 2013). There are three dynamic capabilities that are being described by the company
officials-
 Ability to properly administer the entire “upstream business” ecosystem
 Challenge of proper management of the safety, health, security and environmental
considerations in the MNC (Cabral 2015).
 Ambidexterity across emerging and mature domains
The above usage of the dynamic capabilities has been successfully implemented in the
organizations, which confirms the fact that this approach can be successfully implemented in
other organizations too (Cabral 2015). This strategy can be used successfully to gain competitive
advantage as well as gain performance advantages. The organizations would be able to manage
the various strategic risks as well as capture the inherent market opportunities.
Sustainable approach
There has been an increasing pressure for the organizations to enhance the productivity of
the firm as well as improve their management systems. The organizations need to have high end
functionality of the individual management components. As opined by Dewangan and Godse
(2014), the sustainability is defined as the holistic parameter of the various developments that
are aligned with the organizational goals, evaluation systems and internal incentives. The aspect
of sustainability is being integrated in the strategic management process of the organization,
which is aligned with the strategic thinking. The objective of the sustainability approach is to
ensure there is a positive relationship between the strategy execution and sustainable
implementation of the strategies (Stead and Stead 2013). The effectiveness of a sustainable
strategy ensures that the complexity and differentiation of the domains are being properly
addressed. The corporate values are considered as one of the most important attributes of the
sustainable strategic management.
The sustainable strategic management should be incorporated at three levels namely
normative level, operational process and the strategic level (Stead and Stead 2013). It is
important to give attention to the corporate values, employees and the leadership of the firm
along with the fulfillment of the operational processes. The sustainability factor should also be
integrated well with the organizational objectives. The sustainable component of the
management should be well integrated with the strategy implementation process (Stead and
Stead 2013). The employees should be well acquainted with this process since the success of
sustainable strategy execution would not be possible without their support. The sustainable
approach also takes into account the optimum utilization of the resources (Gamble and
Thompson 2014). The effective use of the resources is important which would help in the
successful accomplishment of the organizational mission.
The sustainable approach to strategic management has been implemented in several
companies. Hilton Hotel Corporation has used the sustainability approach in their strategic
management. The hospitality group is well known for the sustainability supply chains at a global

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scale (Kasim et al. 2014). The company has responsible business objectives and it has taken
subsequent steps to nurture their business processes. It has adopted a consistent approach in the
delivery of their message of the global audience and increase the awareness of their programs
(Stead and Stead 2013). The company has also engaged in corporate social responsibility
activities to prove their concern towards the social and the environmental affairs.
The effective implementation of the sustainable approach to strategic management
showcases the fact that the business entities can gain a lot from this process (Kasim et al. 2014).
There would not only be increased sales of the company but there would also be an improvement
in the brand reputation of the firm. The company would be able to save considerable amount of
resources and hence there would be significant reduction in the operation costs of the firm
(Kasim et al. 2014). Hence, it can be concluded that this strategy can be effectively implemented
by the firm.
Conclusion
The three alternate approaches to strategic management have proved to be unique and
they are implemented based on the type of industry. The stakeholder approach is beneficial when
there are a large number of internal and external stakeholders of the firm. This approach can be
best implemented in situation when it is important to satisfy the needs and preferences of the
stakeholders. However, there are possibilities of conflicts in this approach and it can be real
problem if it is not managed well. The limitations of this approach lies in the fact that there can
be issues in the accountability factor in supervisor roles. It can be a challenging affair to include
the stakeholders in ever decision making activity. The dynamic capabilities approach highlights
the core competencies of the firm, which can be used to gain competitive advantage. This
strategy can be implemented with little extra effort; however, there are chances of duplication by
other similar firms. If there is leakage of company confidential information, then there would be
reduction in the effectiveness of this approach. The sustainable approach to strategic
management not only focuses on increasing of the operational excellence but also focuses on
building amicable relations with the external community.

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