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examine the elements of strategic thinking
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Recommended: examine the elements of strategic thinking
More and more, experts in the field of strategic planning and management are advocating for more attention to be paid on strategic thinking, and recommending for it to be considered a separate and distinct stage in the strategy planning and executing cycle. Results from the strategic thinking exercise feeds directly into creation of the strategic vision, which according Thompson, Strickland & Gamble (2008) is the first phase of a strategy-making, strategy executing cycle.
Ingid Bonn (Bonn, 2001) is very convincing in her argument that not only is strategic thinking an important aspect of any manager’s role, but also that the thinker has special qualities. This implies that not all managers are necessarily strategic thinkers, and in order for an organization to have the best chance at producing optimal strategic plans, they should be particular about the people they hire at levels where strategic decisions are required, and that there should be some sort of criteria to evaluate the creative strengths of these individuals. Since the function of strategic thinking cannot be the effort of one individual, it is imperative that care is taken to build a cohesive strategic management team, who complement each other, and are able to draw from each other in a way that their efforts will be truly representative of a thorough analysis of the available information and who can produce a set of best strategic options of courses of action available to the organization.
In reality though, the cost, both in terms of time and also money, of investing in the process of preparing an involved, focused strategic vision and plan (involving the strategic thinking phase) can be very high, even prohibitive (Temkin, 2003), and as such may not be considered an immediate priority to an organisation’s management team. As well, considering internal factors, building such a strategic team can be a challenge occasioned by -among other issues- lack of appropriate/accurate information required by team to deliberate on the best strategic vision and consequent plans, or inadequate feedback of the results/effects of the existing strategy that is being executed; mistrust amongst the team members (especially if they feel that they are all not being given equal opportunity to exercise their creativity); professional competitiveness (where the chosen members of the strategic team feel that they can use the task as a means to shine), internal office politics (which can adversely affect the composition of the team), and insufficiently apportioned time to complete the strategic thinking and vision development phase and proceed with the rest of the strategic execution process.
Prior to analyzing the characteristics, specifically the knowledge, skills, and abilities required by strategic leaders, this paper will briefly discuss the concept of strategic leadership and later explore those attributes that best characterize the s...
Strategy is the most important factor in leading a business. Business Strategy is defined as “the intelligent allocation of limited resources through a unique system of activities to outperform the competition in serving customers” (Horwarth 28). In Rich Horwath’s book “ Deep Dive” he provides us with key principles and concepts of strategic thinking. The three disciplines of strategic thinking consist of 1) Acumen: which is generating general insights through a step-by-step evaluation of your business and environment 2) Allocation: focusing your limited resources through strategic trade-offs and 3) Action: implementing a system to guarantee effective execution of strategy at all levels of your organization.
Strategic thinking is an essential leadership skill. Our learning team has learned to consider our current decision-making strategies, and examine our options for choosing the best strategy for any situation be it one-sided, compromise, collaboration and deciding-by-majority rule.
For today’s managers, there is a need to learn and to understand the complex nature of complex problems, but not from the simple version, we know and learned from an early age. J. Atwater and Paul Pittman (2006) clarify that as children we learn in a simple linear view. For example, if someone cries, there will be someone there to comfort. A simple action and result, but in reality it is more dynamically complex, not simply a cause-and-effect, or cause and reaction. According to Jay Forrester (1995) , it is hard for a company and senior leadership to evaluate behavior in a complex environment without tools and technology. People do not naturally think systemically or strategically, therefore, managers must be trained in systemic thinking tools and concepts to learn strategic thinking (Forrester, 1995). From the perspective of the structure of an organization, it is important in how the organization structure influences behavior and decision making by placing constraints on what the company has historically known from its experiences, which influence decision-making process within the business. According to excerpt articles from Bob De Wit and Ron Meyer, strategic thinking is not simply framed in the manner in which we have learned in our prior class. In the prior class, we framed our understanding according to Hamel and Prahalad (1996), the rational reasoning approach. To expand on strategic thinking, creative approach must be added to gain additional understanding of De Wit and Meyer’s intent, in addition to a rational systems thinking approach.
These authors are all experts in the fields of decision strategies, executive and leadership development. To me, it seems that the purpose the authors are describing are the six factors that play a role in strategic leadership. The first skill is anticipating potential threats or opportunities. Knowing what changes are happening in the market is key. For example, if a wooden toy maker declines to intertwine electronics into his toys he has failed to anticipate the change in the market and will most likely see a dramatic decline in business. The second skill discussed is challenging personal, professional and external assumptions. The old adage of think outside the box comes to mind, “Only after careful reflection and examination of a problem through many lenses do they take decisive action” (Schoemaker, Krupp, Howland. 2013). The third skill is the ability to interpret, not just interpreting what is being said but also what is happening. Noticing what is happening within and around the workplace can provide opportunities for profit growth as well as different
This requires effective thinking, examination, individual and team thinking, seeing the situation in different perspectives, and then using every aspect combined to create a strategic plan. He explains it as purposeful thinking. Critical thinking enhances decision-making by providing an easy to follow guide that leads you to the best possible action (Brunt, 2005).
The area of study, as earlier hinted, is the role of design leadership in the attainment of the organization’s strategic goals. The concept of strategic thinking has revolutionized the way management is done. In the wake of increased competition and more difficult economic times, companies make calculated moves in all their plans. The UK has had some of the most successful companies; some of which operate in many countries of the world....
In other words, strategic objectives differ from goals/visions in terms of feasibility, practicality, and ultimately implementation. This theme makes its way into essentially every portion of the book, as it is vital to strategy. Often times, strategic planning and strategic thinking is thought to be any action performed by upper management. Rumelt debunks this myth and inserts that these executives are motivating and energizing their employees at best through vague visions and mission statements. Instead, upper-level management should actually focus on opportunities and detail orientated actions to avoid bad strategy. The same logic can be applied to hopeful wishes (over ambitious goals). These goals contain a great deal of uncertainty, as they lack a level of reality and planning. In fact, good strategy should be based off of an educated guess, even if that means you take a stance on an uncertain issue. Rumelt explains, “A new strategy is, in the language of science, a hypothesis, and its implementation is an experiment. As results appear, good leaders learn more about what does and doesn’t work and adjust their strategies accordingly” (Rumelt, 2011, pg. 241). In other words, successful strategists are constantly evaluating and adjusting their original hypothesis to perfect their strategy. This hypothesis allows them to
In addition, this evolution is not only shows on top management, but also reveals on all level of participators in the organization. They contribute to scan the environment for vital information, advise innovations to future plans and projects to take advantage of environment changes, and cooperate with others to constantly enhance work methods and processes. The company needs to make appropriate shifts through strategic management because of current dynamic and complex environment. As a result, strategic management is an evolution and a destination.
Organization failures often result from the complexity of team tactical plans. Importantly, the strategic plans are inherent in the role of the top management. The managers must understand that effective strategic planning activity incorporates the entire organization 's performance and not just affecting one department performance. A good strategic planning process includes parameters for tracking the performance of the entire organizational. Measuring performance makes the plan satisfactory, achievable by the targeted beneficiary (Bryson, 2012).
Throughout the global economic environment the desire to out-perform the competition is always present. In every situation, the companies who do better are the ones with superior strategy (Rothaermel, 2013). Strategic management is therefore important in every company, no matter what industry or market they operate in; and as stated by M. Carpenter and G. Sanders, 2013, is described as "The process by which a firm manages the formulation and implementation of its strategy". Strategic management is a constant topic under discussion with different schools of theorists with different beliefs and attitudes which is described as "A tense array of disagreement" (Rees, 2012).
Sivakumar (2004) describes a strategic decision, a decision that significantly affects the scope of a company, requiring a high degree of commitment. Strategic decisions are interconnected with a company’s long-term goals. For example, a company’s decision to focus its expansion within their domestic market or enter a new geographical market. Strategic decisions are increasingly difficult for managers to make because of ever increasing uncertainty and lack of reliable information. When it comes to making decisions managers tend to rely on past experiences and their gut feeling when coming to a decision (Soll, Milkman & Payne, 2015). Fortunately, tools to correctly identify uncertainty and biases are available to managers. In order to improve the overall decision making process managers must address and understand uncertainty, cognitive biases and the open-endedness of strategic decisions.
Strategic implementation is a critical factor when making decisions regarding issues that affect the vision, mission, or objectives of an organization. Strategies are often implemented in accordance to the culture of the organization, the nature of control systems, the stakeholders, and the nature of the organizational design. In order to achieve success in the implementation of strategies, the structure of these factors must work in coordination with one another. For instance, the strategic vision of CPK lies in the creation of a globally recognized brand name and therefore, all of the goals and objectives of CPK must be directed in realizing that the company achieves this objective (California Pizza Kitchen 2011). Furthermore, the vision statement is inclusive in itself in that it communicates the message in a directional, flexible, and focused manner.
Strategic management is a disciplined effort or control to make necessary decisions that have an effect on a business or an organization; the aim of strategic management is mainly to develop new, innovative or diverse ideas and opportunities for potential or development, and facilitates or assists an organization to achieve its goals (SM, 2010). In reality, strategic management not only can be used or applied to determine mission, vision and values or objectives, but it also establishes roles and responsibilities or timelines in a business (David, 2009). In the following sections, this study will focus on and examine the nature of strategy formulation, implementation, and evaluation activities, and analyze the potential pitfalls or risks in using a strategic-management approach to decision making.
Strategic thinking processes will then be assessed, with a comparison of strategic thinking and strategic planning, looking at the similarities and differences between the two. The positive and negative effects that strategic thinking can have on organisational performance will also be described.