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UNIVERSITY OF APPLIED

MANAGEMENT

{STRATEGIC MANAGEMENT}

PROF. MARTIN GYAMBRAH14-Dec-11

UAMM0020

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QUESTIONS THREE {3} & FIVE {5}

[3] Explain each of the component activities in the definition of the strategic

management process. Which of these activities do you think is most important to

the success of an organization? Why?

[5] Why are some companies successful, while so many businesses fail? What are

the important characteristics associated with strategic thinking? With practicalexamples, postulate on how an organization can encourage this sort of thinking

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TABLE OF CONTENT

PAGE NO

EXCUTIVE SUMMARY4

INTRODUCTION...... ..........5

ANALYSIS & DISCUSSION.16

CONCLUSION.............20

REFERENCES.............33

BIBLIOGRAPHY34

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EXECUTIVE SUMMARY

This research paper recognizes and attempts to explain each of the components activities in the

definition of the strategic management process such as (a) Strategic Planning by Top

Management (b) SWOT Strategic Choice including undertaking a micro-environmental

audit/macro environmental analysis of most organizational framework (c) Mission & Goals (d)

Types of Strategies (Functional, Business, and Corporate, Global etc.) (e) Strategic

Implementation comprising of key parameters such as designing organizational structure,

matching strategy and controls, designing control systems, managing strategic change as well

as feedback of these processes.

In the strict sense and perspective, there is no universal strategy and success methodology as

regards the most important component activities of the strategic management process of

organizational set-up. A corporate entity can under no circumstance prioritize its success unless

the aggressiveness of its strategy is in consonance with the turbulence of the extrinsic

environment.

Furthermore, in view of the fact that the component activities of the strategic management

process is intertwined and dependent on each other, it will be completely absurd and irrational

to opt for any of the activities as far as the performance and for that matter the success of most

organizational framework is concerned.

Myriads of companies are so successful because of luck or probably having the right

mix/combination ofproducts and/ or services at the appropriate time. But even ifluck leads to

success, it will not last.

Criticalsignificant characteristics associated with strategic thinking are listed as below: (i) Intent

Focused (ii) Comprehensive (iii) Opportunistic (iv) Long-Term Oriented (v) Built on Past &

Present (vi) Hypothesis Driven

Lastly, an organization can encourage strategic thinking in diverse ways some of which are

categorically spelt out as below: (a) Managers and employees can receive training that describes

strategic thinking and how to do it (b) Can encourage and reward employees who are

innovative, pro-active, dynamic, visionary etc. biased.

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INTRODUCTION

Johnson and Scholes defined Strategy as the direction and scope of an organizational

framework over the long term which achieves advantage for the organization through its

configuration ofresources within a challenging environment, to meet the needs ofmarkets and

to fulfill stakeholder expectations".(www.tutor2you.com) The definition ofbusiness strategy is along term plan ofaction designed to achieve aparticular goal or set ofgoals or objectives in most

organizations.

Strategy is management's game plan for strengthening the performance of the enterprise. It

states how business should be conducted to achieve the desired goals. Without a strategy, the

management of an organizational set-up has no roadmap to guide them. ( www.rapid-business-

intelligence-success.com)

In game theory, a strategy refers to one of the options that a player can choose. That is, everyplayer in a non-cooperativegame has a set ofpossible strategies, and must choose one of the

choices. A strategy must specify what action will happen in each contingent state of the game.For instance, if the opponent does A, then take action B, whereas if the opponent does C, takeaction D. Strategies in game theory may be random (mixed) or deterministic (pure). That is, in

some games, players choose mixed strategies. Pure strategies can be thought of as a special case ofmixed strategies, in which only probabilities 0 or 1 are assigned to actions. Strategy based games

all have a similar objective where the player thinks through a sequence of solutions to determinethe preferred favorite in order to defeat the opponent. Chess is a common strategy game played

throughout the world. (www.wikipedia.com)

CONCEPTS OF STRATEGY AND STRATEGIC PLANNING

Strategy is a framework through which an organization can assert its vital continuity whilstmanaging to adapt to the changing environment to gain competitive advantage. According to

Igor Ansoff (1987), Strategic Management is a systematic approach to the major and

increasingly important responsibility of general management to position and relate the firm to

its environment in a way which will assure its continued success and make it secure from

surprises. Consequently, strategic planning is that decision making process that aligns the

organizations internal capability with the opportunities and threats it faces in its extrinsic

environment. Generally strategic planning is a top-down, formal, disciplined process to produce

fundamental decisions and actions to shape and guide what an organization is, what it does and

why it does it. Strategic plans look at the long term perspective. To do strategic planning well,

organizations must participate in broad scale information gathering, explore various alternatives,

and place an emphasis on the future implications ofpresent decisions.

Strategic planning is not the same as long range planning.Strategic planning requires an in-depth assessment of the environment outside (External analysis i.e. opportunities and

threats)/SWOT strategic choice and inside (Internal analysis i.e. strength and weaknesses)

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pertaining to most organizational framework. It is this assessment that sets strategic planning

apart from traditional long range planning. Another difference is that long-range planning tends

to assume that current trends will continue into the future. Strategic planning, on the other hand,

tries to anticipate new trends and build in flexibility to adapt to changes through periodic

updates and contingency plans. (Steiner, 1994)

TYPES OF STRATEGIES

Contemporarily, myriads of strategies do exist in every facet oflife and the world at large.

Nevertheless, some of the notable ones that cannot be underestimated and for that over-emphasized

are categorically listed as below: (a) Business Level (b) Functional Level (c) Corporate Level (d)

Global Leveljust to mention a few.

CLASSICAL STRATEGY

CAPABILITIES

WHERE DO WE WANT TO BE

It is undoubtedly true that the strategic management and planning process requires a stream of

decisions that are rich in contemporary information.

Intended Strategy Deliberate Strategy Realized Strategy

Unrealized Strategy Emergent Strategy

{Source: Dr. Stephen Bloy-30th

October, 2007-MBA Strategy Agenda}

Review Current

Situation

Using (Strategic

Analytical

Processes)

ObjectivesStrategy

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Strategy is about planning, having clear intentions and monitoring what you actually did and

responding accordingly.

PERFECT DELIBERATE STRATEGY

It is rare to find a perfect deliberate strategy. A perfect emergent strategy is also a rarity. Thesuccess ofstrategy is consistencies over a period of time. As managers, we should expect

strategies to be in the nature ofdeliberate/emergent rather than in perfect forms. In practice, the

realized strategy will generally be somewhere along the continuum shown below.

Emergent Deliberate

Continuum

Deliberate strategy implies that managers plan to pursue an intended strategic course. In some

cases, however, strategy simply emerges from a stream of decisions. Managers learn as they go

and advance in their managerial duties. An emergent strategy is one that was not plannedor

intended. According to the traditional perspective, managers learn what will work through a

process oftrial and error. Supporters of this view argue that organizations that limit themselves to

acting on the basis of what is already known or understood will not be sufficiently innovative to

create a sustainablecompetitive advantage. (Harrison et al, 2001). A hypothetical case to

buttress this point was when Starwood first launched the Concept of the Heavenly Bed in 1999,

the strategy was a deliberate effort, but the opportunity to provide retail sales was an unintended

outcome, and this unforeseen opportunity led to an emergent and highly successful retail

strategy.

CHARACTERISTICS OF EFFECTIVE STRATEGIC PLANNING

An effective strategic planning regime is:

FlexibleIt must deal with the real world outside the organization; as changes occur in the

outside world, the strategic plan must change in response.

ResponsiveIn order to be responsive, the organization must be close to the market (or sector)

where changes take place. Responding is not reacting; responding is about adapting an existing

strategy as circumstances demand whilst reacting means trying to respond without having astrategy.

ContinualBecause the organization must continually deal with the changes in the marketplace,

strategic planning must itself be a continual process that includes periodic reviews and updates.

AnalyticalA plan is only as good as the information that goes into developing it. Relevant

information, well analyzed, should dictate the content of the plan. An organizations management

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must be willing to commit the necessary time and resources to collecting and evaluating

information.

CreativeThe plan should reflect not only the analysis of the data collected, but also some

intuition, vision and creativity on the part of the organizations management.

Action-OrientedA strategic plan should specify actions that the organization can and will take.

FocusedThe plan should allow the organization to evaluate all major decisionsby asking, Will

this decision help achieve organizational objectives? Will it move us closer to our strategic

targets?

EfficientStrategic planning allows an organization to allocate its resources in the most efficient

way possibleby linking them to objectives where they can have the greatest impact.

DEVELOPMENT OF STRATEGIC PLANNING PROCESS & PERSPECTIVES

Although a considerable amount has been written on strategic management process, it should be

recognized that as a discipline strategic planning process and the associated concepts and

techniques did not emerge fully until the early 1970s. There are several reasons for this, perhaps

the most significant of which is that, as Kotler (1988) has pointed out, largely because of the

growing and continuously buoyant markets of the 1950s and 1960s many companies prospered

on the back of largely short-termoperational planning. The turbulence of the early 1970s that

followed a series ofcrises, including oil supply restrictions, energy and material shortages, high

inflation, economic stagnation, labor unrest, increased unemployment and then recession,

Classical Strategy Process

FUTURE PRESENT PAST

Objectives

PLANNING

Strategies

IMPLEMENTATION

Tasks Results

Standards

EVALUATION

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caused many managers to search for a radically different approach to the running of their

businesses.

At the same time an influx oflow-price but relatively high-quality products from countries such

as Japan began to flood Western markets, changing drastically the economics ofmanufacturing.

The revised approach to management planning process that emerged was designed to provideorganizations with a far stronger and more resilient framework that would enable managers both

to recognize opportunities more readily and overcome threats more easily. This new planning

process was based on three (3) central premises:

The companys business should be viewed and managed in a similar way to an investment

portfolio with each aspect of the business being closely monitored and decisions subsequently

made on which products or specific parts of the business should be developed, maintained,

phasedout, or deleted. (Strategic Decisions: Growth, Consolidation diversification). Emphasis

should be placed upon identifying in detail the future profit potential of each aspect of the

business.

A strategic perspective to the management of each major element of the business should be

adopted. This notion of what has sometimes been referred to as a game plan for achieving long-

term objectives required the strategist to plan on the basis of industry position, objectives,

opportunities and resources.

It needs to be recognized, however, that for the strategist to be able to adopt this approach to

management, there is a need to understand in detail the complexities of the interrelationships

that exist between different parts of the organizational structure. In the majority ofbusinesses,

three different organizational levels can be identified: the corporate level, the business unit level,and the product level.

Hofer and Schendel (1978)Strategy Formulation Analytical Concepts, identified

three (3) distinct levels ofstrategy in a commercial context. These are:

Corporate strategy: This deals with the allocation of resources among the various

businesses or divisions of an enterprise. At the corporate level, the decisions made are concerned

principally with the corporate strategic plan and how best to develop the long-term profile of the

business.

Business strategy: This accentuates on the level of the individual business or division that

addresses primarily with the question ofcompetitive position?

A company that has not diversified beyond its core business, corporate and business strategies isinseparable. For example, the Bacardi Corporation has been in the rum business since itsfounding, and, with the exception of a local beer in one small market, it manufactured no other

spirits besides rum. Bacardis corporate strategy was to be in the "light spirits" business. Its

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business strategy focused on becoming the number-one-selling spirits brand in the world. Itmanufactured no vodka, scotch, or bourbon (keeping its focuson differentiated, premium rum).Its corporate strategy was simply to locate its production facilities in a few strategic locations

(close to sugar cane or close to markets) and to allocate its rum distillate and marketing talent to

the most promising markets around the world. In this scenario, it becomes so glaring to notice

how corporate and business strategies intermingle. In 1993, however, Bacardi acquired Martiniand Rossi, the Italian Vermouth maker who had more than 100 brands and products in almost asmany markets. Now Bacardi had a portfolio ofliqueurs, scotches, cordials, and wines, as well as a

hotel and a foods distribution business. The attention of senior management turned from theselling of rum to rationalizing a very diverse portfolio of products, brands, and operating

companies (corporate strategy). Meanwhile operating management around the world focused onthe specifics of competing in their various markets and businesses (business strategy).

(www.wikibooks.com)

Functional or Product level strategy: This is limited to the actions ofspecific functions withinspecific businesses. Finally, marketing plans need to be developed at the product level. Plans at

all three (3) levels need then to be implemented, the results monitored and evaluated and, wherenecessary, corrective action taken. Functional Strategy is the approach a functional area takes to

achieve corporate and business unit objectives and strategies by maximizing resourceproductivity. It is concerned with developing and nurturing a distinctive competence to provide a

company or business unit with a competitive advantage. For instance, a multi-dimensionalcorporation has several units. Each of these has its own business strategy, set of departments as

well as its own functional strategy. Also, a human resource functional strategy that emphasizesthe hiring and training ofhighly skilled, but costly workforce and lastly, a marketing functional

strategy that emphasizes distribution channel Pull using advertising to increase consumerdemand over Push using promotional allowances to retailers. Corporate bodies such as

UNILEVER, COLGATE-PALMOLIVE and PROCTER & GAMBLE are well-noted for usingthe aforementioned strategy.

Global strategy: Global Strategy' is a shortened term that covers three (3) areas: global,

multinational and international strategies. Essentially, these three (3) areas refer to those

strategies designed to enable an organization to achieve its objective ofinternational expansion.

In developing 'global strategy', it is useful to distinguish between three (3) forms ofinternational

expansion that arise from a company's resources, capabilities and current international position.

If the company is still mainly focused on its home markets, then its strategiesoutside its home

markets can be seen as international. For example, a dairy company might sell some of its excess

milk and cheese supplies outside its home country. But its main strategic focus is still directed to

the home market. In South Korea, international and global soft drinks strategy will involve

mixing both the global brands like Coke and Sprite with the local brands like Pocara Sweets.(www.tutor2you.com)

One of the basic decisions in global strategy begins by considering just how much local variation,

if any, there might be for a brand.

Another more basic decision might be whether to undertake any branding at all. Branding is

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expensive. It might be better to manufacture products for other companies than resorting to

expensive branding. Apple iPods are made in China with the Chinese company manufacturing to

the Apple specification. The Chinese company then avoids the expense ofbuilding a brand. But

faces the strategic problem that Apple could fail to renew its contract with the Chinesecompany,

which might then be in serious financial difficulty.

As international activities expand at most organizational settings, they may enter different kinds

ofmarkets, each of which needs a strategy adapted to each market. Together, these strategies

form a multinational strategy. For example, a car company might have one strategy for the USA -

specialist cars, higher prices - with another for European markets - smaller cars, fuel efficient -

and yet another for developing countries - simple, low priced cars. For some companies, their

international activities have developed to such an extent that they essentially treat the world as

one market with very limited variations for each country or world region. This is called a global

strategy. For example, the luxury goods company Gucchi sells essentially the same products in

every country.

IMPLICATIONS OF THE THREE DEFINITIONS WITHIN

GLOBALSTRATEGY

International strategy: The organizations objectives relate primarily to the home market.

However, there exist some objectives with regard to overseas activity normally which need an

international strategy. Importantly, the competitive advantage highly valued and deemed

important in strategy development is developed purposely for the home market.

Multinational strategy: The organization is involved in a number ofmarkets beyond its home

country. But it needs distinctive strategies for each of these markets because of customer demandsand, perhaps the fact that competition, are different in each country. Significantly, competitive

advantage is determined separately for each country.

Global strategy: The organization treats the world as largely one market and one source of

supply with little local variation. Importantly, competitive advantage is developed largely on a

global basis. (www.ehow.com)

ALTERNATIVE TYPES OF STRATEGY

Planned Strategy: Leaders formulate and strive for implementation with the minimum of

distortion (Budgets, schedules etc). Formulated in the environment that is fairly predictable orcontrollable.

Transnational Strategy: A strategy that combines global coordination to attain efficiency with

flexibility to meet specific needs in various countries.

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Entrepreneurial Strategy: More influenced by the individual, not as precise or articulate as

planned strategy, requires an ability to impose ones vision on the organization. Entrepreneurial

strategy provides flexibility at the expense ofspecificity and articulation ofintentions.

Ideological Strategy: Shared vision collectively pursued is an ideology. Intentions can usually be

identified (Indoctrination, Credo etc) andpositively embraced by members of the organization,not passive acceptance.

Umbrella Strategy: Relax control, leaders set guidelines for behavior, define boundaries and let

actors man oeuvre within. All organizations actions fall under the umbrella (Pricing strategies for

example). Umbrella strategy can be both deliberate and emergent. De Wit and Meyer (1998)

(ibid) argue that all real world strategies tend to be umbrella claiming that you cannot pre-empt

the discretion ofothers.

If leadership can direct, organizations can be directed and move towards planned or

entrepreneurial. When it can

hardly nudge, we

movetowards more

emergent strategies.Umbrella strategies require the right balance between Pro-action and Reaction.

Process Strategy: Leader controls the process ofstrategy making whilst leaving the content of

strategy to others. Behavior is both deliberate and emergent. Leaders control the staff and

organization structure thereby influencing the strategy process.

Unconnected Strategy: One part of the organization with considerable discretion (sometimes a

single individual) because it is only loosely coupled to the rest is able to realize its own pattern in

its stream ofactions. This strategy can also be deliberate or emergent. (Emergent in the context of

the organization and deliberate from the perspective of the individual)

Consensus Strategy: (Emergent) Many converge on to the same theme or pattern that it becomes

pervasive. Unlike the ideology strategy which has a central focus intentionally. Consensus

strategy can be the product of a host ofindividual actionscan be deliberately hosted by some

actors. i.e. Result/Collective Action but not necessarily collective.

THE STRATEGICMANAGEMENT PLANNING PROCESS

The strategic management process means defining the organizations strategy. It is also defined

as the process by which managers make a choice of a set of strategies for the organization that will

enable it to achieve better performance. Strategic management is a continuous process that

appraises the business and industries in which the organization is involved; appraises its

competitors; and fixes goals to meet the entire present and future competitors and then

reassesses each strategy. (www.managementstudyguide.com)

In today's highly competitive business environment, budget-oriented planning or forecast-based

planning methods are insufficient for a large corporation to survive and prosper. The firm must

engage in strategic planning that clearly defines objectives and assesses both the internal and

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external situation to formulate strategy, implement the strategy, evaluate the progress, and make

adjustments as necessary to stay on track.

A simplified view of the strategic planning process is depicted by the diagram below

The Strategic Management Process

Mission &

Objectives

Environmental

Scanning

Strategy

Formulation

Strategy

Implementation

Evaluation

& Control

MISSION AND OBJECTIVES

The mission statement describes the company'sbusiness vision, including the unchanging values

and purpose of the firm and forward-looking visionary goals that guide the pursuit offuture

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opportunities. It is the organizations raison dtre, and indicates the direction senior

management is heading towards. A goal on the other hand is a desired future state the

organization attempts to realize. (Daft, 1998). Guided by the business vision, the firm's leaders

can define measurable financial and strategic objectives. Financial objectives involve measures

such as sales targets and earnings growth. Strategic objectives are related to the firm's business

position, and may include measures such as market share and reputation.

(www.QuickMBA.com/strategy/swot)

ENVIRONMENTAL SCANNING

The environmental scanning includes the following components:

Internal analysis of the firm Analysis of the firm's industry (task environment) External macro environment (PEST analysis)

The internal analysis can identify the firm's strengths and weaknesses and the external analysis

reveals opportunities and threats. A profile of the strengths, weaknesses, opportunities, and

threats is generated by means of aSWOT analysis. An industry analysis can be performed using

a framework developed by Michael Porter known as Porter's five forces. This framework

evaluates entry barriers, suppliers, customers, substitute products, and industry rivalry.

STRATEGY FORMULATION

Given the information from the environmental scanning, the firm should match its strengths to

the opportunities that it has identified, while addressing its weaknesses and external threats.

To attain superior profitability, the firm seeks to develop acompetitive advantageover its rivals.

A competitive advantage can be based on cost or differentiation. (www.QuickMBA.com).

Michael Porter identified cost leadership, differentiation, and focus as three (3)generic strategies

that may be considered when defining strategic alternatives. Porter advised against implementing

a combination of these strategies for a given product; rather, he argued that only one of the

generic strategy alternatives should be pursued.

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SITUATION ANALYSIS

Evaluation of the external environment

STRATEGIC DIRECTION STRATEGIC FORMULATION STRATEGIC IMPLEMENTATION

Creation of organizational Development of strategies to take Development & execution of plans

Missions and goals advantage of strengths & opportunities including design, control, systems,

or overcome or neutralize weaknesses and and management of change threats

STRATEGY IMPLEMENTATION

The selected strategy is implemented by means of programs, budgets, and procedures.

Implementation involves organization of the firm's resources and motivation of the staff to

achieve objectives (Max Weber, Abraham Maslows Need Hierarchy, Contingency, HumanRelation Theories etc.). Strategy implementation encompasses issues relating to: (a) Designing

organizational structure (b) Matching strategy, structured controls (c) designing control

systems (d) Managing strategic change just to mention a few. The way in which the strategy is

implemented can have a significant impact on whether it will be successful. In a large company,

those who implement the strategy likely will be different people from those who formulated it.

For this reason, care must be taken to communicate the strategy and the reasoning behind it.

Otherwise, the implementation might not succeed if the strategy is misunderstood or if lower-

level managers resist its implementation because they do not understand why the particular

strategy was selected.

EVALUATION & CONTROL

The implementation of the strategy must be monitored and adjustments made as needed through

the effective utilization of quality tools/metrics/techniques with much emphasis on consistency

of performance, decrease variation, robust engineering, superior quality, zero defect, adoption

of the philosophy of prevention, Benchmarking, Demings PDCA Cycle & 14 Points of Quality

Management, Florida Power & Light Seven Steps model, Sensitivity & Gap Analysis).

Evaluation and control consists of the following steps: (a) Define parameters to be measured (b)

Define target values for those parameters (c) Perform measurements (d) Compare measured results

to the pre-defined standard and lastly but not the least (e) Make necessary changes

DYNAMIC AND CONTINUOUS PROCESS

The strategic management process is dynamic and continuous. A change in one component can

necessitate a change in the entire strategy. As such, the process must be repeated frequently in

order to adapt the strategy to environmental changes. Throughout the process, the firm may need

to cycle back to a previous stage and make adjustments in consonance with (adherence to TQM,

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Quality Circles, Kaizen Continuous Improvement, ISO 9000/QS9000, Six Sigma DMAIC,

CSM, Balance Score Card, Effective Communication, Good Management/Leadership Traits

(Contingency Theory I & II, Hersey & Blanchards Situational theory), Sound Organizational

Culture and Climate, Instituting Vigorous Education & Training Programs, Performance

Measurement, Supportive Structures, Elton Mayos Postulation, Abraham Maslows Need

Hierarchy, Max Weber, Frederick Herzbergs Hygiene/ Motivational Theories (Motivation,

Ethicality, Rewards and Recognition) just to mention a few)

DRAWBACKS OF THIS PROCESS

The strategic planning process outlined above is only one approach to strategic management. It

is best suited for stable environments. A drawback of this top-down approach is that it may not

be responsive enough for rapidly changing competitive environments. In times ofchange, some

of the moresuccessful strategies

emergeinformally

fromlower levels

of theorganization

, wheremanagers are closer to customers on a day-to-day basis. Another encumbrance is that this

strategic planning model assumes fairly accurate forecasting and does not take into account

unexpected events. In an uncertain world, long-term forecasts cannot be relied upon with a high

level of confidence. In this respect, many firms have turned to scenario planning as a tool for

dealing with multiple contingencies.

ANALYSIS & DISCUSSION

RELATIONSHIP AND IMPORTANCE OF THE COMPONENT ACTIVITIES IN THESTRATEGIC MANAGEMENT PROCESS

Identifying an organizations existing vision, objectives and strategies (transnational, global,

functional, business, corporate) is the logical starting point for the strategic management

processin that a firms present situation and conditions may preclude certain strategies and may

even dictate a particular course ofaction. Every organization has a vision, mission, objectives, and

strategy, even if these elements are not consciously designed, written or communicated. The

answer to the proposition with respect to which of the component activities in the strategic

management process is the most significant to the success of an organizational setting via where

it is going in terms productivity, performance, profitability as well its overall competitiveadvantage can be determined largely by where the organization is heading towards. (Steiner,

1994)

Irrespective of the fact that countless number of large/multinational organizations buy into the

concept of the effective utilization of the strategic management process, it is also considered

pivotal in the decision-making process ofsmaller firms. Research reveals that organizations who

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are advocates ofstrategic planning and management processes tend to outsmart/overshadow

their counterparts in the business fraternity who shy away from it. Candidly speaking, high

ranking officials (Management Gurus) have reported high levels of satisfaction with strategic

managementtools and ideas than with most management techniques. World statistics reveals that

about 81% of companies have inculcated the process into their scheme of things. In North

America, the figure was even higher (89%). More so, the hospitality industry also benefitted

immensely from the same process in contention by a recent study of hotels in the United

Kingdom (UK), which found that organizational performance, productivity, profitability,

competitive advantage was positively associated with the thoroughness, sophistication,

participation, and formality ofstrategic planning and management processes. This same feat of

organizational excellence and performance was chalked by the Starwood Hotels & Resorts in its

effort to launch a new product into the market some few years back.

The strategic management process is dynamic and continuous. A change in any one of the major

component in the model can trigger or necessitate a change in any or all of the other components.

For instance, a shift in the economy could represent a major opportunity and require an alteration

in the long term objective and strategies; a failure to accomplish annual objective could require a

revamping/drastic change in the firms mission. In lieu of this, strategic formulation,

implementation, and evaluation activities should be performed on a continuous basis (Kaizen

Continuous Improvement, Quality Circles, Ishikawa Tools of Quality adherence), not just at the

end of the year or semi-annually. The strategic management process never really ends (ongoing

and a continuous process).

Furthermore, in view of the fact that each of the component activities are intertwined and linked,

it will be completely absurd and irrational to opt for any of the aforementioned pointers as far as

the performance and success of most organizational framework is concerned. However,

countless number of strategic initiatives deemed fit and probable in doing justice to the

proposition Which of the component activities in the strategic management process is most

significant to the success of an organization?are categorically listed as below:

Adoption of Competitive Business Strategies: This parameter can be dealt with in consonance

with: (a) Cost Leadership (attaining and effectively utilizing the lowest total cost basis as a

competitive advantage (b)Differentiation (Using product feature or services to distinguish the firms

offering from its competitors (c) Market Niche Focus (Concentrating competitively on a specific

market segment)

Accentuation on Functional-Level Strategies: Focuses on improving the effectiveness of

operations within an organizational setting in terms of Manufacturing, Marketing (Usage of

SWOT Analysis/Ansoff Strategy, Penetration, segmentation), Materials & Distribution

Management, R&D, Human Resource (Equity, Openness, Ethicality, Rewards & Recognition,

Performance Appraisals & Management) just to mention a few.

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Adherence to Global-Level Strategies: This type of strategy highlights on (a) Multi-Domestic (b)

Global (c) International and lastly but not the least (d) Transnational. Pragmatically, products can be

standardized; clients can also be located outside the country so as to maximize wide system of

advantages. Technologies can also be leveraged across multiple markets through world-wide

marketing efforts. Organizations can compete by subsidization i.e. usage of technological,

financial in one market to fight a competition in another market or through global strategic

alliances such as acquisitions, mergers, joint ventures, industry consortia e.g. EBSCOHOST,

Hofstede, strategic business partnering, preferred supplier arrangements, outsourcing, co-

production, knowledge sharing such as Skype, IATA and Mexico Airlines, Network of

Universities comprising ofUAM, Strasbourg, Austria etc. In the international arena, flexibility

and superb communication normally emerges as mandatory leadership skills. More so,

structured design must merge with foreign cultures as well as link operations to the home

country. Information and control systems must fit the needs and incentives within local cultures

which will invariably foster the success story of most organizational framework. Again

recruitment, training, transfer, promotion and downsizing through spinning-off etc. ofinternational human resources create array ofproblems not confronted from other countries

such as labor laws, guaranteed jobs and cultural traditions ofkeepingunproductive employees

on the job.

Adoption of the principle of enactment: The principle of enactment presupposes that

organizational set-ups do not have to submit to existing drivers prevailing in the environment;

they can partially create their environment through strategic alliances with stakeholders as well

as investing in leading technologies, advertising, political lobbying and a variety of other

activities. Global Hotel Alliances is a hypothetical case in point, in which Omni Hotels,

Kempinski Hotel & Resorts, Pan Pacific Hotels & Resorts, Rydges Hotels & Resorts, MarcoPolo Groups, Dusit Hotels & Resorts and Landis Hotels havejoined forces to compete against

the mega chains. The panacea to enactment is a comprehension that a corporate entity does not

necessarily have to acclimatize completely to the forces that exist in its operating environment. It

can at least partially influence certain aspects of the environment in which it competes. (Hittet al,

2001)

Effective organizational structure: A formidable organizational structure will foster team

spirit, cohesiveness, goal congruence and fit, heterogeneity/homogeneity, synergy strategically

as well as preventing reaction formation, social loafing, hyperactive behaviors, bureaucratic

control, perceptual and attribution biases. This will inadvertently enhance organizationalcompetitiveness, market share, productivity, performance via its optimum profitability and

success. Typical examples of organizations well-vexed in this discipline/attribute are UNILEVER

& TOYOTA GHANA LIMITED etc.

Sound organizational culture & climate: Relationships among a firm's functional business

activities perhaps can be exemplified best by focusing on organizational culture, an internal

phenomenon that permeates all departments and divisions of an organization. Organizational

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culture can be defined as "a pattern of behavior developed by an organization as it learns to

cope with its problem of external adaptation and internal integration that has worked well

enough to be considered valid and to be taught to new members as the correct way to perceive,

think, and feel." This definition emphasizes the importance of matching external with internal

factors in making strategic decisions. Organizational culture captures the subtle, elusive, and

largely unconscious forces that shape a workplace. Remarkably resistant to change, culture can

represent a major strength or weakness for the firm. It can be an underlying reason for strengths

or weaknesses in any of the major business functions. (www.zainbooks.com)

Corporate-Level Strategies: This emphasizes on paying a lot ofpremium on key parameters

such as vertical integration (backward & forward),diversification, strategic alliances, leveraging

resources, acquisitions, new ventures, business portfolio restructuring, business process

reengineering (BPR) as exemplified by the DANNEX, PROCTER & GAMBLE, AYRTON

DRUGS PHARMACEUTICAL INDUSTRY, diversification (related & unrelated) through the

production ofnew products/services e.g. a Professor of a renowned University (Legon) resorting

to the selling ofsugar just to mention a few to boost organizational performance and sustain its

competitive advantage.

Effectively Managing Strategic Change: Change, whether incremental or quantum can create

significant challenges and displacements in organizations due to the difficulty of many

individuals, groups and institutions to adapt to change. Organizational success, and indeed

survival, is dependent on the ability to respond to and manage environmental changes, and the

identification and development ofstrong leadership to guide the process. Leaders are required to

lead from the front and to develop effective strategies to recruit, retain, and develop effectivesuccessors thereby enhancing a firms competitive advantage and its overall success and

performance.(Marsh, 2001)

Usage of balance score card: Successful organizations and corporate bodies monitor their

operations, human capital and finances, but also continuously scan the industry state of affairs

and monitor other radical players in the same industry (competitors). The Balance Score Card

(BSC) provides a framework to manage that process. It prompts executives to perceive whether

they have improved in one area at the expense of the other. (www.QuickMBA.com)

Essentially, since it encompasses four (4) main perspectives such as financial, customer, learning& growth and internal business process that enable predictions to be made strategically about the

performance and success of an organization, imbibing this strategic initiatives into its scheme of

things will go a long way to place it onto a enviable pedestal as far as gaining competitive

advantage is concerned.

OTHER MISCELLANEOUS FACTORS THAT CAN ENHANCE ORGANIZATIONAL

SUCCESS AND PERFORMANCE

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Leadership/Management through strategic thinking, value creation, proactiveness,

dynamism, firmness, equity distribution and allocation of resources (b) Effective

allocation of resources, performance appraisals (c) Effective utilization of feedbacks to

foster good communication (d) Removal of communication barriers such as syntactical

noise, selective perception, semantic distortion etc. (e) Adherence to TQM & CSM (f)

Usage of SWOT Analysis/Benchmarking (g)Adherence to the Human Relation, Elton

Mayos, Max Weber, Contingencies I & II posits (h) Unfreezing of pre-conceived

ideas/perceptual biases (contract & halo effects), reaction formation, abhorrence of

social loafing to foster team cohesiveness and synergy just to mention a few.

CONCLUSION

Sources ofcompetitive advantage and for that matter organizational success and performance

have contemporarily shifted from financial resource to technology and now to human capital. In

other words, success does not depend primarily on the size of the budget or the products

supporting technologies. It really depends on employees attitudes, competencies and skills

(Hersey & Blanchards Situational Theory); their ability to generate commitment and trust,

communicate aspirations and work in diversified and complex relationships or activities.

It is irrevocably true that there is no universal strategy and success methodology for all

organizations. More so, the driving variable which dictates the strategy requirement ofsuccess

is the pedestal ofturbulence within the external and internal environment. One can under no

circumstance prioritize his or her success unless the aggressiveness of the strategy is again

aligned and in consonance with the turbulence in the environment.

Furthermore, the strategy of a firm cannot be predicted, nor is it predestined; the strategic

decisions made by managers cannot be assumed to be the product ofdeterministic forces in their

environment. On the contrary, the very nature of the concept ofstrategy assumes a human agent

who is able to take actions that attempt to distinguishones firm from the competitors.

In consonance with the analysis of the subject matter in contention and in my candid opinion, in

order for an organizational setting to remain competitive, it should develop and adhere to

strategies that accentuates and have magnitude thresholds ofconformity with pointers such as:

(a) Value Creation (b) Core Competences (c) Goal Congruence and Synergy (d) Technological

up gradation, merging through strategic alliance, take-over e.g. the taking over ofNeyveli

Ceramics by Sparek Ceramics (Horizontal Integration) (e) Conglomerate Diversification e.g.

ITC Cigarette & Hotel (unrelated to customer groups, function & technology), (f) Divestment i.e.

to say the sale of or liquidation of a portion ofbusiness e.g. Kelvinator India spinning off

Avanti Scootess due to high cost of production andjoint ventures just to mention a few so as to

rubshoulders and compete favorably with other radical players within that same industry.

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In a nutshell, I will emphatically posit that the success of a strategy is much dependent on how the

strategy is executed, formulated, implemented, evaluated, controlled and managed within an

organizational set-up in such a manner so as to foster its competitiveness, market share, profit

margin as well as its overall and optimum productivity and performance.

QUESTION FIVE {5}

INTRODUCTION, DEFINITION OF SUCCESS, IMPORTANT SUCCESS QUOTES &

SUCCESSFUL ORGANIZATION

Success basically refers to the achievement of something desired, planned, or attempted. Success

may mean but is not limited to: (a) a level of social status (b) achievement of an objective/goal (c)

the opposite of failure (www.wikipedia.com)

Successmeans different things to different people. For some, is a measure of success? Yet others

have multiple definition ofsuccess. (www.career-success-for-newbies.com)

Success is not the key to happiness. Happiness is the key to success. If you love what you aredoing, you will be successful (Albert Schweitzer)

There is nothing as useless as doing efficiently that which should not be done at all (PeterDrucker). The secret ofsuccess is constancy to purpose (Benjamin Disraeli)

When I speak of success, I speak of success with the young lady: and when I speak of causes and

reasons to make success probable. I speak of causes and reasons that will tell as such with the younglady. (Charles Dickens-A tale of Two Cities)

The best intentions will not always ensure success (Aesop-Fables)

A successful organization is the foundation program that motivates and inspires leaders and

members of organizations to define and achieve their organizations success.

(www.infor@thesuccessfulorganization.com)

Why are some companies successful, while so many other businesses fail? Some organizations

may just be lucky. They may have the right mix of products and/or services at the right time. But

even ifluck leads to success, it probably will not last. Most corporate bodies that are highly and

extremely successful over the long term effectively acquire, develop, and manage resources

and capabilities that provide competitive advantages at the expense of other radical players inthe same industry. For instance, McDonalds enjoys out-standing brand recognition and a

world-class operating system. Marriott enjoys these same benefits in the lodging industry.

Successful companies have also learned how to develop and manage relationships with a wide

range oforganizations, groups, and people that have a stake in their firms. The emergence of a

fiercely competitive global economy means that firms have to expand their net-works of

relationships and cooperate with each other to remain competitive. McDonalds investment in

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Chipotle was a cooperative venture. As Steve Ells, Founder, Chairman, and CEO of Chipotle

noted, Weve enjoyed our relationship with McDonalds since the beginning and appreciate

the support theyve shown in funding Chipotles growth over the last seven years. Still, weve

always operated independently, and that wont change as McDonalds continues to reduce its

investment in Chipotle and focuses on its core business.(Hitt et al, 2001)

CHARACTERISTICS OF A SUCCESSFUL ORGANIZATION

Group members know each other well: This characteristic, which provides a means of team and

community building within an organization is the keystone on which all of the remaining

characteristics are built. It must be present and continuously renewed if the organization is to

function effectively.

Members are involved in defining organizational purposes: The level of motivation of group

members to work for group goals is increased in proportion to the level of involvement by members

in establishing these goals.

Members are utilized to help generate ideas: While it may be quite simple for a few group leaders

to produce ideas for special programs, this does little to develop a sense of ownership and

participation among other group members.

There is a commitment to group decision making: We firmly believe in the adage that people

support programs they help to create and the full participation by the membership in generating

ideas, coupled with group decision making, works to ensure a full measure of group participation and

support.

Skills, resources, and liabilities of the group and community are identified: Many groups areoften rich in natural resources and skills available through members. Likewise, the university

campus and the community in which it is located are the source of additional resources.

Systematic problem solving techniques are used: Resolve conflicts when they appear. Do not

wait for them to fester.

The group effectively communicates itself and its projects to its members and to the

community: The timeline with which the group communicates itself to others outside the group and

members inside the group has implications for such important factors as recruitment of new members

and attendance at functions sponsored by the group.

The group participates in periodic evaluation and assessment: Groups need to become

accustomed to routinely evaluating a variety of aspects of group life, ranging from the way meetings

are handled to assessing the success of a particular project or program.

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{Source: Eight Characteristics of a Successful Organization,Faculty Advisor Handbook

1996, Montana State University, adapted by Werner University Center, Western Oregon

University}

FACTORS CONTRIBUTING TO THE SUCCESS & FAILURE OF ORGANISATIONS

Business rises and falls on leadership. According to business guru, Brian Tracy, "Leadership is

the most important single factor in determining business success or failure in our competitive,

turbulent, fast-moving economy."(www.herosoul.com)

Some of the notable reasons why immeasurable number ofbusinesses fails that cannot be thrown

over-board are spelt out as below: (a) Poor Business Planning (b) Poor Financial Planning (c)

Poor Marketing (d) Poor management

Proper applications of the afore-mentioned pointers are undoubtedly some key attributes of

good leadership. According to a study conducted by a US Bank, it was concluded that about 78%

of business fail due to lack ofwell-developed business plan i.e. to say most individuals go into

businesses without a plan, as if it were the ice cream flavor-of-the-month. If you fail to plan,

you plan to fail. Leadership is about planning for success before it happens. Sun Tzu (6th

Century Chinese Philosopher), in his epic workThe Art of War, gave some business advice

that is applicable in this contemporary world of ours. When your strategy is deep and far-

fetched, then what you gain by your calculations is much, so you can win before you even fight.

When your strategic thinking is parochial, then what you gain by your estimation is modicum,

so you lose before you battle(www.herosoul.com)

Also, in analyzing the issue in contention from the financial perspective according to the US Bank

Report earlier mentioned, it was estimated that about a whopping82% of business dwindled due

to poor cash flow management skills followed closely by starting out too meagre money. Business

leadership is about taking financial responsibility, conducting sound financial planning and

research, and understanding the unique financial dynamics of ones business. On a more

cautious note, before even starting a business, it will be reasonable to show your plan to an expert

and get a counsel. What a strategy. Asking for the advice of someone who perceives the

bottom-line realities ofbusiness day in and out such as dichotomizing and conducting autopsy

reports ofthousands ofbusiness entities is the safest strategic initiative that one venturing into a

business for the first time should opt for. Unfortunately, countless number ofwell-informed folks

does turn a blind eye to this sensitive issue which more often than not culminates into a massivebusiness calamity and its subsequent shut down.

Again, thorough research workcarried out in certain parts of the developed countries such as

the U.K, Netherlands, France, China just to mention a few reveals so glaringly that

approximately 64% of the businesses surveyed in Marketing according to Statistics failed

because of owners minimizing the significance of properly promoting their business by ignoring

competition (Customer Satisfaction Management/Competitor Analysis). A leader should be able

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to effectively communicate his or her idea to the right people and understand their unique needs

and wants. Leadership is about taking initiative, thinking-out-of-the-box, taking pragmatic

action as and when it falls due via providing value to people (Value Creation).

More so, one of the most significant reason why businesses fail is due to poor management (70%

Failure). Leaders who fail abysmally to give precedence to theHuman Relation, Elton Mayos,Max Webers, Abraham Maslows Need Hierarchy postulations will be far-fetched from

achieving optimum success via the overall performance, productivity and profitability ofmost

organizational setting. (www.herosoul.com)

MISCELLANEOUS REASONS

Lack of Vision: The good old book (Bible) states that Where there is no vision, the people

perish but them that keepeth the law, happy are them. It is the role of the CEO to clearly define

and communicate the corporate vision. If there is no vision, a flawed vision, or a poorly

communicated vision, the

responsibilityfalls

squarelyin the

lapof

executive leadership.

Moreover, if the vision is not in alignment with the corporate values there will also be troubled

waters ahead. No visionequals No leadership

Lack of Execution: Everything boils down to execution, and insuring a certainty ofexecution is

job number one for executive leadership. If as an entrepreneur or CEO you dont focus on

deploying the necessary talent and resources to insure that the largest risks are adequately

managed, or that the biggest opportunities are exploited, then you have a leadership team

destined for failure.

Lack of Capital: Raising, deploying, and managing capital is ultimately the responsibility of

leadership. The amount ofcapital required to run a business is based upon how the business is

operated. Therefore if leadership operates the business without consideration for capital

constraints, or irrespective ofcapital formation issues, then the blame should fall squarely on the

shoulders ofleadership. Moreover, if executive leadership squanders capital through

irresponsible acts, there will also be severe consequences.

Lack of Leadership Traits: It is the job of leadership to recruit, mentor, deploy, and retain

management talent. If the management team is not getting the job done that is the fault of

executive leadership.

Lack of Sales: A lack of sales is ultimately attributable to a lack of leadership. Pricing,positioning, branding, distribution, or any number of other metrics tied to sales force

productivity all rest with executive leadership.

No Market: Good leadership pursues sound market opportunities. Pursuing the wrong market or

pursuing the right market improperly is also the fault ofexecutive leadership.

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Poor Professional Advice: Nobody has cornered the market on knowledge and wisdom. If

leadership doesnt seek out the best quality advice available to them, then they will likely not

make the best decisions. All CEOs and entrepreneurs need top qualityprofessional advisers.

The Inability to Attract and Retain Talent: Great leaders surround themselves with great talent.

They understand that talent begets more talent. If your companydoesnt possess the talent it needsto achieve its business objectives no one is to blame but leadership.

Competitive Awareness: A business does not need to be the category dominant player to avoid

failure. That being said, it is the leaderships responsibility to understand the competitive

landscape and navigate it successfully.

Obsolescence or Market Changes: Ifexecutive leadership is in touch with the market it will be

difficult to be caught by surprise. It is the responsibility ofexecutive leadership to make sure that

the proper attention is given to innovation, business intelligence and market research to manage

the risk ofobsolescence and market changes.

Cultural Change: Culture in an organization is formed by the beliefs, behaviors, norms,

dominantvalues and the climate. The failure to address the culture of an organizational setting

is frequently the reason for many management initiatives either having limited success or failing

altogether. Hence, an in-depth understanding of the culture of an organization and using that

knowledge to successfully map the steps needed to accomplish a successful change is an

important part of the market share, profit margin, growth, and competitive edge in the success

story of most organizational framework.

REASON BEHIND SOME COMPANIES SUCCESS

Also, much of the research on the resource-based perspective has demonstrated

that firms can gain competitive advantage through possessing superior resources. Superior

resources are those that have value in the market, are possessed by only a small number offirms,

and are not easy to substitute. If a particular resource is also costly or impossible to imitate, then

the competitive advantage may be sustainable. A sustainable competitive advantage may lead to

higher-than-average organizational performance over a long period.Marriott is an example

of a corporation that has successfully capitalized on its resources to gain a competitive advantage

over other hotels. The most successful organization best adapts to existing forces. Some evidence

suggests that the ability to align the skills and other resources of the organization with the needs and

demands of the environment can be a source of competitive advantage (Environmental

Determinism) (Hitt et al, 2001)

IMPORTANT CHARACTERISTICS OF STRATEGIC THINKING

The term strategic thinking is employed in so diverse ways that it is difficult to determine what

people mean when they use it. In fact, most people probably do not know exactly what they mean:

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they may use the word to connote thinking about strategy or use it interchangeably with

strategic management or strategic planning. According to a well-known strategist,

HenryMintzberg, strategic planning is an analytical process aimed at carrying out strategies that

have already been identified. Strategic planning results in the creation of a plan. On the other

hand, strategic thinking involves intuition and creativity. It is a way to synthesize stimuli from the

internal and external environments to create an integrated perspective of the enterprise.According to Mintzberg, strategic planning is so rigid that it tends to drive out creative-thinking

processes. (Hitt et al, 2001)

When Arlington Hospitality began the search for a new CEO, it asked candidates to draft

strategic white papers presenting their opinions on the future direction of the company.

Candidates who did not have an intellectual focus or vision for the firm or who presented status

quothinking were eliminated. The company was in search of a strategic thinker, who possesses

the six characteristics of strategic thinking listed below: (a) Intent-focused (b) comprehensive (c)

Opportunistic (d) Long-term oriented (e) Built on the past and the present (f) Hypothesis-driven

Elements of Strategic Thinking

Intent Focused Built on a managerial vision of where the firm is going and

what it is trying to become. This is called strategic intent.

Comprehensive A systems perspective. Envisions the firm as a part of a larger

system of value creation. Understands the linkages between

the firm and the other parts of the system.

Opportunistic Seizes unanticipated opportunities presented to the firm.

Long-term Goes beyond the here and now. Looks several years into the

Oriented future at what the firm will become, based on its strategic

intent.

Built on Past and Does not ignore the past or present. Instead, learns from the

Present past and builds on a foundation of the realities of the present.

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Hypothesis Driven A sequential process in which creative ideas are then

critically evaluated. Is willing to take a risk. Learns from mistakes.

{Source: This table was strongly influenced by J. M. Liedtka, Strategy Formulation: The Roles of Conversation and

Design, in The Blackwell Handbook of Strategic Management, ed. M. A. Hitt, R. E. Freeman, and J. S. Harrison

(Oxford: Blackwell Publishers, 2001), 70-93.}

INTENT-FOCUSED

Strategic thinking is not a random process oftrial and error. Instead, it involves strategic intent,

which is a vision with regard to where an organization is or should be going. Strategic

intent implies a particular point of view about the long-term market or competitive position that

a firm hopes to build over the coming decade or so. Hence, it conveys a sense of direction. A

strategic intent is differentiated; it implies a competitively unique point of view about the future. It

holds out to employees the promise ofexploring new competitive territory. Hence, it conveys a

sense of discovery. Strategic intent has an emotional edge to it; it is a goal that employees perceive

as inherently worthwhile. Hence, it implies a sense of destiny, direction, and discovery.These arethe attributes of strategic intent. A recently announced signing of a letter of intent between

Trump Entertainment Resorts and Diamondhead Casino Corporation to form a joint

venture partnership to develop, build, and operate a destination casino resort is a formal

statement of intent. However, behind this statement of intention is the strategic thinking that

leads to this proposed venture.

COMPREHENSIVE

Strategic thinking is based on a systems perspective that envisions the firm as a part of a

complete end-to-end system of value creation. Furthermore, strategic thinking means thatdecision makers are aware of the interdependencies in the system. This type of thinking fits

within the stakeholder view of the organization, which is one of the important perspectives

on which the model of strategic management is based. Organizational managers each possess a

mental model, which is a view ofhow the world works.

Mental models should include an understanding of both the internal and external organization.

An industry-based model of the external environment has dominated for many years.However,

a more promising model views the company not as a member of a single industry, but also as a part

of a larger business system that crosses a variety of industries. Companies co-evolve around

innovations, and they work both in competition and cooperatively to satisfy the demands of awide variety of stakeholders, including customers, suppliers, and broader society and its

governments, as well as to create or absorb the next round ofinnovation. Organizations are a part

of one or more value chains, to which they can contribute in many ways. (Freeman et al, 2001)

Managers who want to think strategically must also understand and appreciate the internal

pieces that make up the whole of their companies. The role ofeach person within the larger

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system must be identified, as well as the effect of that role on other people and groups within the

organization and on the outcomes of the organization. It is impossible to optimize an

organizational system in, for example, satisfying customer needs, without understanding how

individuals fit into the system.So the strategic thinker observes and understands the connections

between and among the various levels of a business, as well as the linkages between the business

and stakeholders in the external environment. (Harrison et al, 2001)

OPPORTUNISTIC

Although strategic thinking is based on strategic intent, there has to be room for what might

be called intelligent opportunism.Intelligent opportunism can be defined as the ability of

managers at various levels of the organization to take advantage ofunanticipated opportunities

to further an intended strategy or even redirect a strategy. For example, Marriott saw an

opportunity for growth in the lower-priced segment of the lodging industry when Courtyard

was introduced. Of course, the company has a long history of bold entrepreneurship, beginning

with a root beer stand started in 1927 by John and Alice Marriott. They added hot food,incorporated, and expanded their Hot Shoppes into a regional chain. The next major move

was Marriotts first hotel, the Twin Bridges Marriott Motor Hotel, which opened in Arlington,

Virginia, in 1957. With the increase in airline travel, Marriott built several hotels at airports

during the 1970s. Each of these ventures was in response to an opportunity, and each was a

vital part ofbuilding the Marriott that exists today. Intelligent opportunism is consistent with

the traditional strategic planning model. According to that model, strategies often come from

taking advantage ofopportunities that arise in the external environment. (Harrison et al,2001

)

LONG-TERM ORIENTED

Managers, especially in America, are often accused of making shortsighted decisions (Myopism).

Perhaps a renovation or expansion plan is canceled because the payoff looks too far away, or

employees are laid offwhen occupancies drop, only to be rehired within a few months. In contrast,

strategic thinking is long-term oriented. Actions that a firm must make now should be linked to a

vision of what the firm should become, based on the strategic intent of its top managers. This

type of thinking is driving many hoteliers into international markets on a much larger scale.

BUILT ON PAST AND PRESENT

Although strategic thinking is long-term oriented, it does not ignore the present or the past. In

fact, it might be referred to as thinking in time:Strategic thinkers need to consider the past.

The past forms a historical context in which strategic intent is created. Learning from past

mistakes helps the firm avoid making them again. Also, analysis of the past behaviors of

important stakeholders, such as customers, competitors, unions, or suppliers, can help a firm

anticipate how the stakeholders will react to new ideas and strategies. The present is also

important to strategic thinking, because it places constraints on what the organization is able

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to accomplish. Strategic thinking is a creative process, but it is also a well-reasoned process.

Although it may lead firms to consider unconventional ideas, the ideas that are actually pursued

are selected based on rational analysis, including consideration of the organizations current

resources, knowledge, skills, and abilities.

HYPOTHESIS-DRIVEN

Organizations should test their decisions to see if they are appropriate or likely to be successful.

This process is similar to the scientific method, in which hypotheses are developed and tested.

Hypothesis development is a creative process built on brainstorming, whereas hypothesis testing is

an analytical process. A typical process begins as managers suggest ideas regarding what the firm

might want to do. Those that are considered reasonable are then subjected to rigorous analysis

of potential using a well-developed methodology. After analysis, managers determine which of

the ideas are worthy of implementation. However, the company may decide not to make a full

commitment to each of them at first. Instead, it may allocate enough resources to implement the

ideas on a trial basis, so that the company will be able to tell whether the ideas are going to workout. The ideas that are successful are given additional resources. In this description, hypothesis

testing occurred twice. The first test was the rigorous analysis conducted by managers in the

organization. The second test occurs as the company tries the ideas in the marketplace. (Harrison et

al, 2001). If you combine all six of the elements ofstrategic thinking, what you have is a long-

term thinker who builds a vision for the future on the foundation of the present and the past. It is

someone who understands how the organization fits within its external environment, and who

has a firm grasp ofrelationships with external stakeholders. Furthermore, it is someone who is

willing to break out oftraditional mind-sets and to seize opportunities, but who uses a rational

approach to test ideas to prevent the organization from moving indefinitely in an inappropriate

direction.

POSTULATION ON HOW AN ORGANIZATION CAN ENCOURAGE STRATEGIC

THINKING-FOOD SERVICE INDUSTRY

Organizations can encourage strategic thinking in several ways. Firstly, managers and employees

can receive training that describes strategic thinking and how to do it. Secondly, an organization

can encourage and reward employees who generate new ideas (hypotheses). For instance, Disney

allows some of its employees an opportunity each year to present new ideas to top managers.

With a similar philosophy, Virgin, well known for its unconventional airline, created a one-stopbridal-services company because one of its flight attendants was having a difficult time lining up

those services for a friends wedding.Virgin Bride, the name of the venture, is now Britains largest

bridal emporium. Third, a company can actually implement a strategic planning process that

incorporates the elements of strategic thinking. Such a process would include a thoroughevaluation of the external environment, with a special emphasis on relationships with

stakeholders. It would also include the generation ofnew ideas and facilitate their testing. Finally,to encourage strategic thinking, an organization has to be willing to take risks. It was risky for

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KemmonsWilson to develop the first Holiday Inn back in 1952, after returning from a familyvacation disheartened at the lack of family and value-oriented lodging, but the strategy worked so

well that Holiday Inn developed into a trusted name along the emerging interstate highway system.

(Hitt, et al, 2001)

HOTEL AND RESTAURANT INDUSTRY

Hotels and restaurants are among the mostcompetitive businesses in the world. The hospitality

industry primarily consists of businesses that provide accommodation, food and beverage,or some combination of these activities. Hospitality businesses provide services, which differ

from tangible products because they are immediately consumed and require a people-intensivecreation process. They differ from other service establishments by providing for those who are

in the process oftraveling away from home in contrast to local residence, although restaurantsoften serve both travelers and local guests. The offering of an experience is also becoming an

important component ofhospitality. In addition, a wide range of business structures exist inhospitality, such as direct ownership by chains, franchising, asset management, and consortia.

Today, the hospitality industry has become more complex and sophisticated, with a movementaway from the mine host (i.e., a view of hospitality in which the host personally and socially

entertains visiting guests) and the cost-control frameworks of the past to a more strategic viewof the business, in both investment and operations domains. (Hitt et al, 2001)Strategic thinking is

intent-focused, comprehensive, opportunistic, long-term oriented, built on the past and thepresent, and hypothesis-driven. Organizations can encourage this sort of thinking through

training, rewards systems, integrating elements ofstrategic thinking into the strategy-makingprocess, and by encouraging risk taking.

FOOD FOR THOUGHT &STRATEGIC THINKING IN PERSPECTIVE

Strategic thinking occurs when the entire organization begins to act in concert/consonance with

the strategic plan. It involves teaching people at all levels of the organization to anticipate

opportunities and threats while managing the day-to-day tasks that fall within their scope of

responsibilities. (www.QuikMBA.com)

Scholars such as Hughes and Beatty (2005),De Kluyver and Pearce(www.emergingleaders.com)

postulated that in order for organizations to succeed, leaders must be able to think and plan

strategically as well as develop strategic thinking skills in their followers. An organization armed

with strategic thinkers is a learning organization that is in the position to effectively deal with

change. Typical organizations that are affiliates of this sort of thinking are listed as below:

Also, Heracleous posited that strategic thinking represents the initial aspect of the organizations

ability to remain sustainable while strategic planning represents the end to the thinking process.

Organizations that exert much time and energy in strategic thinking but make no plans to realize

the thinking run the risk offailing in today's' business world. (Heracleous, 1998)

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The Skoda UK Scenario: Skoda has been in the top five (5) car manufacturers for the past 13 years

in the JD Power Surveys (a customers satisfaction studies which survey owners ofcars for the

past six (6) months. The company was also adjudged the number one car-maker in Top Gears

2007 Customer Satisfaction Survey whilst Skoda Octavia model also won the 2008 Auto

ExpressDriver Power Best car (www.thetimes100.co.uk). This achievement was as a result of

strategic thinking and decisions taken by the company to improve its brand image by aligning

with Volkswagen AG, which is the largest car manufacturer in Europe with a reputation for

strength, quality and reliability. This practical illustration depicts how Skoda UK achieved

organizational excellence through strategic thinking and alignment to Volkswagen.

UT Bank: Unique Bank For Real People: UT Financial Services in June 2010 listed additional 91

million shares to acquire UT Bank and operate under the name UT Bank. Again, the merger of

UTFinancial services with UT Bank through strategic thinking positioned it as a lending Bank

poised to change the face ofBanking in Ghana through fast, efficient and respectful delivery of

services while maintaining the core proposition of a Loan in Less than 48 hours slogan.

(www.utbank.com)

In most companies, front-line employees are trained to function in the moment rather than prepare

for the future. Yet, just like the long-term success of the business, each individual's success is

dependent on his or her ability to implement tactics and perform in the moment, as well as

execute plans for all of tomorrow's accomplishments.

Again, in/on a more pragmatic sense, high thresholds ofcorporate entities can be made to think

strategically if they imbibe the following parameters listed below into their scheme of things:

Overcome Fear of Failure: One should accept that mistakes will happen. In fact, if they're not

happening, it probably means one is not keeping up with the market. Instead ofseeking to avoidmistakes, we should learn from them and design plans that allow for the occasional setback.

Take Incremental Steps: We should never try to send a spaceship to the moon before we learn

how to fly but rather start with the strategies and components we can expect to reasonably sustain,

and build on our early successes. This will help support the riskier components of our plans.

Make a Commitment: People aren't stupid. No matter what we say, employees will wait to see

what other leaders and senior managers actually do before they commit to anything new and

different. We should make a conscious effort to stand behind our plans and visions with actions

and people will be drawn to achieve the set goals. (www.ehow.com)

Pick Up Speed: We shouldnt make the mistake of waiting for the ideal moment. In today's world,

there are no ideal moments. If we have planned and are focused, we should engage strategic

components of our plans now and we will generate the momentum to carry us through.

Be Responsive: We have to beprepared to adapt our methodologies and processes to deal with

roadblocks or changes. Developing the skills of flexibility and adaptability will ensure we can

modify the plan when necessary and increase its chances of success. In fact, the more we encourage

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employees to think strategically, the more flexible and adaptable they will become.

Demonstrate Resolve: There is the exigent need to understand the implications of our plans and

allocate resources realistically. Strategic targets are never achieved without follow-through and

alignment. Just saying we are going to do something does not make it happen. We need to have the

organization capabilities (including people, process, system, tools & dollars) to make it happen.

Instill Teamwork (Team Cohesiveness & Synergy): It is auspicious to gain the confidence and

trust of our organization especially the managers who most directly influence individual contributors.

We should strive to instill our vision in them, and help them succeed in their jobs so they can do the

same for the organization (Frederick Herzbergs Hygiene/Motivational Theories, Douglas Mc

Gregors X & Y Postulation). The intriguing question therefore is What happens when

employees begin to think more strategically?

They become more responsive to changing customer needs (Customer Relation Management).

They learn to identify potential threats, obstacles, and enigmatic areas before they reach the critical

point. They become better problem solvers as they learn how their decisions and actions impactthe business in the future as well as today. And they become more involved with and more

supportive of the overall strategic plan within most organizational framework.

In the past, most companies could get by with just strategic planning. Today's topsy-turvy

markets demand more. We should beyond reasonable doubt engage in strategic planning on a

regular basis so as to enhance our abilities to think strategically throughout the company. By so

doing our organization will become more flexible while increasing our ability to handle any new

challenges that comes our way which will invariably enhance the growth rate, market share,

profit margin and the overall attainment of most organizations strategic goals, targets as well

as gaining competitive edge at the demerit of other radical players in the industry.(Gilmore,

2008)

As we move deeper into the 21st century it becomes increasingly clearer that organizations no

longer