What is the role of rules or guidelines in successful strategic management? Are rules or guidelines all that are required?

Introduction of Guidelines in successful strategic management

Strategic management leads an organization towards success. Strategic management involves steps which managers, leaders and employees follow in order to move forward towards success. These approaches are considered to please the customers and obtain success in long run of business. The strategy planning involves overview of the external environment, formulation of a strategy, implementation of that strategy, reviewing the result after implementation and making sure the results are satisfactory and organization is achieving its goals as planned and organization is succeeding in long business run. Rules that support success of strategic management include brief discussion and communication, lessons from history, systemized procedure should be followed and every taken risk should be carefully evaluated, innovative ideas should be considered as innovation leads towards success. [1]

Content of Guidelines in successful strategic management

We cannot over emphasize the importance of strategic management in an organization and in its success. When a strategic vision is developed an organization is guided towards success and development. All the necessary steps are followed to implement that particular strategy which is designed by the organization. The management and team leaders play very important role in executing a strategy and having it successful. Therefore, it is necessary for directors and employees of an organization to ensure best performance out of their best employees and develop good results.

This is the era of change and every organization changes its functional structure in order to cope with growing strategies of market. The change has an impact on business strategies. Strategic management is utilized as a tool to adopt new practices of management. The role of strategic management is to highlight the importance of adopting new strategies in order to cope with growing competition in the business. This provides help to organization to meet the demands of external as well as internal environment of organization. It is greatly recommended that organizations utilize the rules or guidelines in order to prepare operational and strategic plans. It is important for an organization to build strength and make all the necessary and important changes to meet the guidelines and direct organization towards success. [2]

The strategic management helps to make several plans which make the organization capable of coping up with any kind of situation. Plans such as corporate plan, business plan, risk management plan, plan to control fraud, strategic plan of information technology etc. Strategic planning plays a key role in driving an organization towards success. It develops the abilities of workers and enhances their thinking capabilities. These guidelines allow taking flexible decisions for future expanding the organizational boundaries and coming up with new ideas. Thy also help to limit the organizational process and performances so that quality performance is delivered. It makes an organization open to the option of change according to changing trend of the industry.

            Other than guidelines there are some other factors which are required for the strategic management planning. These factors include setting of goals, achieving those objectives; adopt strategies that highlight the core values of the organization, and external and internal environment of the organization. The goals provide a vision of success, goals are defined by time it can be short term or long term. Goals should be based on reality, attainable, qualitative and quantitative and specific. Objectives are based upon achievement of goals. There can be several objectives for achievement of goals, another requirement is that the objectives have to be smart. i.e. specific, measurable, achievable, relevant and associated with time.

            Every organization is built upon certain values and those values reflect upon working and functioning of the organization and its management. The values include honesty, quality, excellence, respect etc. The internal and external environment also has a great impact in strategic management of the organization. Internal environment includes factors such as strengths and weaknesses of the organization while threats and opportunities are known as external environment of the organizational framework. [3].The guideline or rules provide a framework according to which an organization construct its working strategies which can drive it towards success. Another area of concern is success depends upon other factors such as goals and internal as well as external environment.

Introduction of the main activities in the successful execution of a strategy

Strategy execution is concerned as the major concern of CEO’s and management of several organizations and they rate it top most concern of every organization to exist. It is found that 60% of the times strategies are not efficiently executed and all the efforts and investment goes to waste. Successful execution is defined as the successful implementation of the strategic plan. Successful execution of strategy involves three basics processes which are known to be people, strategy and operations.  There are certain actions which require implementation of the strategy to attain organizational success. Execution of the strategy is perennial and notorious challenge. Even the best and the foremost organizations can have issues in implementing strategic plan in order to achieve objective. [4]

Implementation of strategy includes activities which are performed to achieve success. It includes all the tactics an organization manages to perform in order to execute the strategy. Implementation of strategy includes following strategies:

1)      Strategy articulation

2)      Strategy communication

3)      Strategy translation

4)      Strategy monitoring and control

5)      Strategy engagement

Strategy articulation: In order to begin the step of planning the strategy and then finally executing it. The foremost and important step is the planning of the strategy. Articulation of strategy is a function of leadership. At this step the strategy has to be carefully planned by the organization. There should be a procedure to bring CEO and head management of an organization together and bring the process under discussion. In order plan a strategy, vision and mission should be clearly described and then the statements and strategies should be revised several times in order to ensure proper working of the strategic plan. [5]

Strategy communication: Strategy communication involves engagement of stakeholders by paying attention to human psychology and behavior. In order to implement the strategic plan successfully in organization involvement and communication of stakeholders is important. It is crucial to know the expectations of internal and external stakeholders in phase of implementation. The involvement does not only bring gains from their input but will also incorporate the sense of ownership in the strategy which is vital for the facilitation of the execution process.

Strategy translation: Strategic plan cannot be magically implemented in an organization it requires conversions of strategic missions into short term operating objectives. It is an important component to be incorporated in operational management of the organization. Any plan which is based upon time and measureable it should be contain results in business plan.

Strategy monitoring and control: Monitoring and controlling of strategic plan includes the determination of all the steps which are required for the monitoring the strategy into practice. All the parameters should be known, brief knowledge of source from which data is collected, method for data verification, frequency of data collection and analysis, format that is required observe the strategy from the aspect of data monitoring and control. [6]

Strategy engagement: It is a step which is required for the execution of strategy so that managers are dedicated to their work of achieving the strategy. Commonly, management of an organization gets engaged with the execution of strategy but they forget to focus upon theme of the strategy. It is hard to get people on board to get a specific task delivered and this should not be taken lightly. In strategy engagement first of all, pre planning is done, strategic communication plans are built, strategies are combined and then success is celebrated. Stake holders are recognized, effective contributions of the stakeholders should be confirmed. HR plays key role to ensure satisfactory contribution of managers in execution of strategy. HR which possesses goal management aspects should have clear link without strategy.

Conclusion on the main activities in the successful execution of a strategy

Successful execution of strategy involves five major points which are strategy articulation, strategy communication, strategy translation, and strategy monitoring and control and strategy engagement.

Introduction of strategic management in non-profit organizations different from strategic management in for profit organizations

Profit and non-profit organizations both work and achieve their goals in a similar way but there are some observable subtle differences among both. Both the organizations adopt similar procedure but the planning criteria to achieve their goal are different. The CEO of both the organizations has different expectations from one another. Every organization has a mission and certain strategy to execute that strategy. Profit organizations aim to grow their business and earn money while the objective of non-profit organization is to meet the demands of the society. Strategic planning is a mission to pinpoint the goals, condition of market, resources and a way to crave a path for a better yet progressive future. Several organizations include experienced people to facilitate, generate and execute strategy. [7]

Content of strategic management in non-profit organizations different from strategic management in for profit organizations

There are several ways in which strategic management of profit and non-profit organizations differ. Some are described as below:

Managerial effectiveness: The effectiveness of a strategy varies from one management to other. In profit organizations the management establishes the strategy and the staff members fulfill the remaining requirements, including and considering all the recommendations this ensures how certain goals are achieved. On the hand, non-profit organizations have a different role to play and much bigger responsibility to bear. Despite the differences of profit and non-profit, managerial body has greater participation in adopting a strategic plan.

Program effectiveness: In order to analyze the effectiveness of program within organization both type of organizations use SWOT analysis in order to determine strengths, weaknesses, opportunities and tools present within an organization. There are some other protocols which are followed by profit and non-profit organizations in order to achieve short and long term goals.

Network effectiveness: Network effectiveness of an organization is contribution of participants for each organization. In profit organization the strategy depends upon management and staff in order to consider recommendations and accomplish goals. In non-profit organizations involve stakeholders which can benefit the organization to become a part of strategic management.

Mission: All the organizations are driven by mission but majorly most non-profit organizations are run by it. Profit organizations are more determined and focused on their mission while no-profit organizations find it difficult as they tend to follow money more than the mission. Therefore non-profit organizations rely upon donors, volunteers and fundraising to avoid great contribution of money and energy. [8]

Legitimacy: There is a legal difference between both type of organization which separate and protects employees from legal and financial liabilities. Profit organizations have full time management and staff while non-profit organizations lack full time management and CEO.

Expenses and budgeting: A strategy can cost a lot of money to the management. Profit organizations possess budgeting team which lacks in non-profit organization. They need a supervisor to make sure that there is sufficient budget to spend over a strategy.

Volunteer management: In order to manage and imply a strategy, sometimes contributions from volunteers are necessary. Profit organizations are capable of paying them while non-profit organizations cannot. Most of there is work is free of cost for a noble cause.

Meeting donor demand: The profit organizations are financially stable while non-profit organizations depend upon contributions from their donors to fulfill their objective of strategic management. Non-profit organizations largely depend upon donations, grants and mission related earned income.

Measuring and monitoring impacts: For profit organizations income is generated for its management, success is monitored and measured and the money earned can then be shared with the management and the organization. [9]

Creativity and diversity: Strategic management of profit organizations have limited, selective and experience based knowledge of industry so they come up with limited ideas for industrial development. Non-profit organization’s management is over the edge over here. Volunteers and others bring great variety of ideas to the table leading the organization towards success.

Conclusion

Both profit and non-profit organizations differ from each other on certain criteria, there are ten factors which are stated above showing the difference among two.

Introduction of  What are simple heuristics and what do they contribute to decision making approaches

The term heuristics is derived from a Greek word which means to find out or discover. The term was introduced to English language in 1800s. It is considered of great use and helps to solve problems which are hard to solve via logic or theory. Later in 1970’s, another meaning of heuristics emerged in the field of psychology and research of decision making that limited methods of decision making are often wrongly applied to certain situations where logic and probability theory should be applied. The term is used in positive way to focus upon beneficial role of it in search and computational models. The research suggests that fast and frugal heuristics can contribute in unknown spectrum of environments of actual world. [10]

Content of What are simple heuristics and what do they contribute to decision making approaches

Heuristics is considered a model which displays behavioral phenomena of both living and artificial systems. From a descriptive perspective, intention is to capture how a mind takes a decision in condition such as limited knowledge and time. From an engineering perspective, it is suggested that artificial systems are made to take intelligent decisions. It also requires great knowledge and vast computational power.  The computational model requires precision in every step taken to gather data and then process a decision. For fast and frugal heuristics the computational model should have principles for searching information or alternatives or both, halting the search, and finally making a decision.

Simple heuristics of What are simple heuristics and what do they contribute to decision making approaches

In today’s world we cannot expect rationality from everyone because knowledge is limited and not everyone has access to it. Rationality and traditional models suggest that decision makers possess unique powers for reasoning, immense knowledge and infinite measures of time. Modern world requires understanding of decisions. In terms of Simple heuristics that makes us smart, there is an overview about mind’s usage as a tool box, exploration of fast heuristics, source of making decisions by utilizing mental resources. Simple heuristics range from simplicity to performance of complex algorithms. It is done especially when data is to be generated. Simplicity moves towards complexity. Evidences are given to approve simplicity of the heuristics and challenges are approved. [11]

Contribution of simple heuristics in approaches of decision making

Decisions can be made with the help of simple method of elimination. Alternatives are marked out of the boundary by successive cues until only one choice is left. Heuristics principles can be utilized for making decisions and interference depending upon the results of the search. These principles are simple as well as bounded to computational method. For a moment, a decision can rely on one cue and other cues can be discarded which are found during the research.

1.      Ignorance based decision making What are simple heuristics and what do they contribute to decision making approaches

The heuristics can be associated to cases which contain large number of possibilities. For example, a company is chosen for investment from bunch of other companies, the heuristics will lead to choice of the most famous companies. This is due to assumption that best performers get famous therefore they have name and they are well known. It is testable but not authentic assumption. It was found through research that ignorance based decision making can beat greatly recognized and experienced professional of stock market.

2.      One reason decision making

When there is more than one option, in such situations one reason is enough to take a decision. Specifically, when that one option has enough chances of possibility. Several options have been considered for single cue decision making.

3.      Elimination heuristics for multiple choices

It is also known as Categorization by elimination, in this one option is chosen among several options. This category of heuristics makes accurate judgments by using one successive cue. The performance comes out with few points’ percentage of accuracy of traditional categorization algorithms. It also includes models of neutral network and exemplar. [12]

Conclusion What are simple heuristics and what do they contribute to decision making approaches

The heuristics helps to take wise decisions and deal the situation with accuracy avoiding the risk of loss and wrong decisions.

Introduction of erratic decision making and social decision making for strategic management:

When a decision is taken by people in organizations, they tend to make good decisions in stable and consistent preference. Usually judgment is done through psychological perspective, in order to investigate the erratic decision of the manager. The inconsistent judgment by manager can change the shape of the firm. It is found out that managers are tends to make more erratic decisions in hostile environment. Dynamism and hostility interact with each other in making of erratic strategic decisions which results in the reduction of positive relationship which exists between erratic strategic decisions and hostility of environment. It will result in high environmental dynamism in comparison with those who experience low environmental dynamism.

Social decision making have impact on strategic decision making and focus optimization of competitiveness of an organization. Organizations possess greater responsibilities and are dedicated to find greater good for the society and the organization. Social decisions are strategic decisions lying in strategic positions, involves functioning of several organizations and high stakes. [13]

Example of implication of erratic decision making in strategic management

Let’s consider an organization which has a flexible system for taking decisions and takes erratic decisions. The organization is not built upon strict guidelines but flexible democratic structure. This strategy allows devising easy and convenient communication and responding efficiently and quickly to changing demands of consumers of products produced by the organization. Therefore, organization chose not to formalize the management strategy so they can be more responsive to intelligence approach. There is a decision to invest in additional implementation of strategic management. This will help to increase cost of production and side by side will reduce the chance of adaptation in the market, as the industry is small and predictable.

Example of implication of social decision making for strategic management

This can be understood by the following example of industrial ecology. The innovations are established well and designed well. For example, the US and EU have different systems for checking the risk of chemicals more than once in environment. EU has a specific system for testing, but the results are produced only when the table risk rises to a specific level. US have no such testing requirement to submit data. So the point is, EU has designed strategy to avoid the risk of getting affected by chemicals by implication of social decision for strategic management. [14]

Conclusion on erratic decision making and social decision making for strategic management

Strategic management is required for an organization to run efficiently and work differently and smartly than other competitions in the market. An organization should be open to change and able to adapt according to changing environment and be a challenging organization in the industry.

 References of erratic decision making and social decision making for strategic management