Strategic management between a yoghurt producer and software company

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This essay deals with the use, analysis, and application of strategic management concepts and theory in a true life setting. The assignment first deals with an analysis of the world view of a company writing software for use in a wide range of electronic appliances like smart phones, computer tablets and other devices used in the home, the workplace, or elsewhere and how such a worldview would be different from that of a traditional yogurt factory. It thereafter goes on to examine and analyse the ways in which the strategising processes of these two organisations could well be different from each other because of the differences in their world views.

Strategic management is a complex process used by business firms for the identification of long range targets, scanning of operating environments, evaluation of organisational structures and resources, matching of such resources strengths and weaknesses with environmental opportunities and threats, identification of stakeholders, building of alliances, prioritisation and planning of actions and making adjustments over time to fulfil, satisfy and meet performance objectives (Betz, 2001). Brinkerhoff, (1991 and 1994) perceives strategic management to comprise of three aspects, "looking out, looking in and looking ahead" (Scribner & Brinkerhoff, 2000, p 5-1). Looking out represents the exploration of the environment beyond organisational boundaries for the setting of feasible objectives, identification of important stakeholders and building of constituencies for change; looking in represents the critical assessment and strengthening of systems and structures for the management of assets, finances, personnel and other necessary resources; looking ahead involves the formation of strategy and its meshing with organisational resources and structures in order to achieve policy objectives, monitor progress (at the same time) and adjusting organisational approach, as and when required (Scribner & Brinkerhoff, 2000, p 5-1).

Johnson and Scholes, (2008), state that strategic management involves taking decisions about (a) the long term direction of organisations, (b) the scope of organisational activities, (c) the gaining of advantage over competitors, (d) the addressing of changes in business environments, (e) the building on competences and resources and (f) meeting of stakeholder expectations (Johnson, et al, 2008). Henry Mintzberg, (1987), suggested that it was not possible for anybody to own "strategy" and the term could be used in several ways, including a plan, a ploy, a perspective, a pattern for behaviour, and a position with respect to others. Mintzberg's suggestions introduce further complexities into the concept of strategy. Whilst plans represent the ways in which most people think of strategies, ploys can be taken to mean short term strategies that aim to outwit competitors and opponents. Strategies involving patterns of behaviour are those in which progress is achieved through consistent behavioural forms and progress occurs because of such behaviours. Position refers to the location of organisations in their environments, with strategy mediating or matching organisations to their environments (Mintzberg, 1987). Perspectives refer to an inherent way of perceiving the world strategy and in respect of an organisation can be compared to the personality of an individual (Mintzberg, 1987).

Michael Porter, (1996), states that business strategy is not about operational effectiveness. It is all about being different and deliberately choosing different activity sets to deliver unique mixes of value (Porter, 1996). Porter states that the choice of a unique position does not guarantee sustainable advantage; the achievement of such sustainable advantage also concerns the making of tradeoffs because different positions require differences in equipment, employee behaviour, skills and management systems (Porter, 1996). "Tradeoffs occur when activities are incompatible. Simply put, a trade-off means that more of one thing necessitates less of another". (Porter, 1996, p 68)

Organisational strategy at its most fundamental level can be thought to be the means i.e. the plans, policies and actions, by which organisations seek to achieve their long term objectives. In many organisations it includes the determination of objectives as well as the ways and means for achieving them (Roney, 2004). Strategic management is perceived to be the set of frameworks, theories, tools, and techniques that help in explaining the various factors underlying organisational performance and in assisting managers to think, plan and act (Roney, 2004). It is a means that enables businesses to review their past performance and even more importantly determine their future actions for achieving, as well as sustaining, superior performance (Roney, 2004).

Prahalad and Hemal, (1990), stress upon the requirement for organisational leaders to think beyond current operations in order to develop strategic intent. Such thinking, they argue, helps in shaping organisational strategy and in "stretching it beyond its past and present developments". (Campbell, et al, 2002, p 14) Mintzberg, (1995) states that strategic planning is unfortunately associated much too often with highly prescriptive approaches to strategic management that are often inappropriate in the uncertain modern business environment.

The discussion has so far been restricted to fundamental concepts of strategy. It is however important to understand that the contemporary environment, which is not only dynamic but also complex, requires a more sophisticated view of strategy (Stonehouse, et al, 2004). Analysed in greater detail, strategic management can be approached through four specific perspectives, economic perspectives, behaviouralist and institutional perspectives, complexity perspectives, and critical theory perspectives (Stonehouse, et al, 2004). Understanding and knowing these perspectives helps in viewing strategic circumstances and challenges through multiple lenses and assess the environment in different contexts (Stonehouse, et al, 2004). Such a multiple perspective approach becomes singularly useful in assessing the differences in organisational worldviews of different types of companies and the influence of such world views on their strategising processes (Stonehouse, et al, 2004).

The two business organisations taken up for discussion and analysis for this assignment operate in different sectors. Company A, which is engaged in making and marketing yogurt in traditional ways is likely to be different in various ways from company B, which is engaged in writing software for rapidly evolving industries that are emerging from the area of electronic appliances.

Company A deals in a generic product. Yogurt is traditionally made through the fermentation of milk with active life cultures that contain bacteria for conversion of milk into yogurt. The company deals with one specific product, but can well develop product variations through the use of different flavours as well as different levels of fat. Whilst yogurt is a socially desired food for its taste and various health benefits, changing consumer preferences have resulted in demand for product variations associated with different flavours, the use of additions like fruits, nuts and raisins, and different types of packaging. Some organisations engaged in making yogurt also make yogurt based flavoured beverages. Company A uses a limited range of raw materials, which essentially comprise of different grades of milk, active culture, and various materials for flavouring and addition. Yogurt is manufactured in standard and easily available machines, the designs of which have changed little over the years, even as some innovations have occurred for increasing volumes and making production more user-friendly.

Whilst company A produces a generic product that has little variation and is made with the use of through standard machines, its packaging is also done in conventional paper or synthetic containers. The production process is simple and is not expected to change significantly in the coming years. Such companies by and large sell their products through company owned outlets, super markets and other retail counters. The distribution of products, whilst it does involve cold chain management, is essentially standardised. The company's production, storage and distribution process would have developed over the years and evolved through trial and error processes.

The markets of such companies are essentially local, and in certain cases regional or even national, depending upon the scale and volume of their operations, as well as the number and location of their production units (Wilson & Gilligan, 2004).Their procurement processes concern the buying and inward movement of milk in bulk containers in safe and hygienic conditions. Whilst some of these companies have expanded over the years and developed well known and strong national and international brands, their numbers are few. Most traditional organisations in the yogurt sector have limited production, distribution and marketing operations. With little threat from substitutes, their strategic objectives are likely to focus on improvement of production processes, enhancement of quality, and expansion of markets. Company A is also likely to have a conventional managerial and workforce structure that would essentially be hierarchical in nature and be staffed with a workforce that is homogeneous, not diverse, and characterised by low turnover (Wilson & Gilligan, 2004).Whilst the attitude of its management towards workforce members is likely to be paternal and concerned, employees will have little scope for career progression or involvement in decision making activity (Richard, 2003).

Company B, on the other hand, writes software for companies engaged in production of electronic items. It is likely to be significantly different from company A in its production processes, its employment of assets, the quality and structuring of its workforce, its clients and its operating environment. The company would be required to service a range of technologically advanced organisations that (a) are innovative in their approach, (b) operate on the cutting edge of technology, and (c) constantly make complex and sophisticated demands from their suppliers (Melo, 2005). Company B is required to produce software items that are sophisticated, complex and ever changing in nature, a far cry from the generic yogurt produced by company A. Company B is likely to produce its software products through the efforts of large numbers of systems and software specialists, all of whom are expected to have high levels of cognitive skills, analytical abilities and intellectual strength. Company B is likely to have significantly different approaches towards workforce management. The management of knowledge workers is a complex activity and most organisations that engage such employees use flat organisational structures and employee empowering HR policies, rather than the hierarchical and command and control policies likely to be evident in company A (Melo, 2005).

Apart from issues concerning production processes and nature and management of workforce, company B's marketing environment and challenges are likely to be significantly dissimilar from those of company A. Company B's clients are organisational in nature, whilst company A is likely to service mainly retail customers and a few restaurants and hotels. Company B's customers are also likely to be spread over much larger geographical areas. They could well come from different parts of the world and belong to different societies and cultures. The marketing approach of company B is likely to be complex because of the ever changing nature of its products, intense market competition from existing and new competitors, threats from substitutes, and cultural and social complexities (Stonehouse, et al, 2004).

The two companies, A and B, as is evident operate in vastly different environmental circumstances, both external and internal, and are likely to have significantly different world views and approaches towards marketing, sales, production and personnel. Whilst the markets and customers of these two organisations differ in complexity of products and services, geographical coverage, intensity of competition and social and cultural implications, their internal organisations are also expected to have differences in organisational structure, workforce skills, and workplace diversity. Company B is far more likely to have a diverse and multi skilled workforce in comparison to company A.

Such differences in external and internal environments call for the adoption of different strategies for organisational growth and success and enhancement of competitive advantage. It would be difficult, if not impossible, for company B to achieve its policy goals and objectives by adopting the organisational strategies and processes of company A and vice versa for company A. The examination of the strategic approaches of these two organisations with the use of multiple perspective approaches can help in the understanding of their systems, their cultures, their complexities, and their different areas of power and influence (Proctor, 2000). Such an analysis can be of help in deciding upon the strategising process of company B, the organisation engaged in manufacturing specialised software, and in determining the various ways in which such strategic processes are likely to be different from those of company A.

The economic perspectives on strategy and its management essentially concern the concept of the rational man and are positivist in nature (Parker, 2002). The economic perspective calls for the taking of strategic decisions in a rational, neutral, and unbiased manner for the achievement of corporate objectives, the achievement of business growth, and enhancement of competitive advantage (Parker, 2002). Viewed through the economic perspective, organisational managements are required to take strategic decisions in areas of organisational structure, production processes, workforce management, supply chain management, and marketing, in rational and scientific ways in order to achieve organisational objectives and enhance competitive advantage (Parker, 2002).

The overwhelming majority of contemporary strategic processes, tools, and techniques are associated with the economic perspective and include analytical tools for (a) assessment and formulation of organisational structure, (b) comprehensive analysis of marketing and larger environments with the use of PESTEL (Political, Economic, Social, Technological, Environmental and Legal) analysis, (c) analysis of extent of competition in a specific sector with the use of the Porter's 5 forces model and (d) the analysis of internal strengths and weaknesses of individual organisations with SWOT analysis (Proctor, 2000).

Such analysis of internal and external environments is thereafter followed by the generation of specific strategic approaches that involve (a) alignment of organisational strategy with environmental factors, (b) eliminating dissonance between strategic objectives and environmental conditions, and (c) the application of organisational strengths to exploit market and environmental opportunities (Roney, 2004). Strategic management approaches also call upon organisations to constantly keep abreast of threats and take constructive action to reduce or eliminate organisational weaknesses (Roney, 2004).

Michael Porter's theory of generic strategies requires organisations to clearly distinguish between strategies of least cost and differentiation and thereafter choose either of these two strategies for achievement of organisational objectives (Proctor, 2000). Porter makes the point that organisations should choose one of these strategies and thereafter abide by them, rather than try to adopt elements from both least cost and differentiation strategies in efforts to be all things to all people (Proctor, 2000).

Viewed from the economic perspective, strategy formulation for company B will in the first place involve comprehensive analysis of (a) the marketing environment, (b) the position of its competitors, (c) market segmentation and (d) larger political, economic, social, environmental, technological and legal issues. Such analyses are bound to be extremely complex considering that the market of the company is likely to be unrestricted by local or national frontiers and is expected to extend, not just to nearby states but to organisations that are likely to need its products in distant countries (Johnson, et al, 2008). The analysis of the international environment will have to take account of factors like currency fluctuations and international trade laws and regulations, in addition to local and international environmental factors (Johnson, et al, 2008). The application of Porter's 5 forces theory can help Company A in increasing the understanding of its management of the extent of competitiveness in software writing industry. Whilst Porter's 5 forces theory continues to be applicable to traditional organisations, it is being critiqued in recent times for being outdated for modern day firms that are engaged in cutting edge businesses in an era that is dominated by the Internet and shaped by globalisation (Johnson, et al, 2008).

An assessment of organisational strengths and weaknesses in areas of product development, product and service delivery, internal implicit and explicit knowledge, organisational learning, and availability of resources will help the management of company B to assess its strengths and weaknesses in order to identify appropriate business opportunities. Adoption of strategies for matching of strengths with organisational opportunities, recognition of threats and elimination or reduction of weaknesses will allow company B to enhance its organisational strength and competitive advantage (Johnson, et al, 2008). The use of Porter's theory of generic strategies will allow it to choose between least cost and differentiation strategies. Whilst the final choice of strategy will ultimately depend upon the specific features and environment of an individual organisation, it is more than likely that company B will find differentiation to be the more suitable strategy and choose to specialise its skills and offerings in a specific area of the market after appropriate analysis and assessment.

The implementation of organisational strategies involve the arrangement and utilisation of resources, the development of organisational structure and the choice of the most appropriate organisational structure and HR policies for optimisation of organisational performance and results (Melo, 2005). Each of these areas is again complex in nature and requires the taking of rational and clearly thought out corporate decisions individual firms for the optimisation of organisational benefits. Financial management strategies call for appropriate decisions on capital structures, with regard to organising funds from shareholders, internal generation and external debt (Brigham & Enrhardt, 2007). Such decisions affect the financial performance, as well as the risk profile, of individual firms and need to be taken after consideration of their financial, organisational and risk implications.

The structuring and formulation of HR policies is another important component of organisational strategy (Melo, 2005). Whilst business firms have traditionally been organised into hierarchical structures and have been managed through conventional command and control methods, such HR policies are felt to be increasingly irrelevant in the modern day context of knowledge workers and participative and collaborative working environments (Melo, 2005).

It can be seen from the preceding discussion that the economic perspective expects organisational managers to behave rationally and appropriate organisational strategies and policies with the careful and selective use of appropriate strategic tools and techniques. Company B, going by the economic perspective, will have to look at various aspects of its marketing and environmental conditions, both from the local and the international perspective, and thereafter decide upon the most suitable marketing strategy for enhancement of market share and sales. It will also have to analyse its various financial requirements, which can entail significant outlays of funds on account of acquisition of newly evolving technologies, and take appropriate capital financing decisions that are appropriate in terms of arrangement of required capital, as well as balancing of risk. Company B will also have to function with a workforce whose members are necessarily highly educated, well trained, and skilled in specific competencies. Such workforce members will have to be controlled, encouraged, and motivated with carefully chosen and appropriate HR strategies.

The formulation of organisational strategy for company A, engaged in the traditional production of yogurt, is likely to be far more simple in practically in all operational and marketing areas, including management of environment, coping with competition, framing of organisational structure and financial management. Company A is likely to have a fixed and established market. It will be most likely to have simple and well developed production and supply chain processes, established cash flows, little threat from substitutes and normal local competitive pressures. With the production of yogurt essentially being done through simple specific purpose machines, the company is not likely to require highly skilled, educated and trained workers. Operating in much simpler environments and with established customers, its strategic priorities are likely to focus upon improvement of working processes, enhancement of sales, and creation of some amount of variety in its products. Strategic decision making, from the economic perspective, is likely to be far simpler for this company.

Viewed through the economic perspective, strategic decision making, though complicated, is considered to be an essentially mechanistic process that is shaped by rationality and logic in all phases of decision making. The emphasis on the economic angle of business in strategic management theory is evident in the many strategic decision making tools used by contemporary managers to formulate their strategies and drive their organisations forward. Such tools depend upon logic and rationality of managers for their choice and utilisation. Organisations, with the use of this perspective, are felt to consist of rational systems and processes that are directed by the top management, who constitute the ultimate decision makers.

Whilst all managers are likely to think of themselves as rational and logical people who take decisions after careful consideration of different relevant factors and with the application of appropriate management tools, the actual decision making processes followed in commercial organisations are often significantly different (Slovic, 2002). It is in the first place difficult for managers to obtain all the information that is required for complete environmental and organisational analysis and for the taking of appropriate strategic decisions. The conduct of detailed analysis is also bound to be limited by financial and time constraints (Parker, 2002). It is also important to note that contemporary organisations work in a rapidly evolving and dynamic world and that the internal and external conditions of their organisations change with such frequency that strategic long term decisions often become inappropriate or redundant after they are taken (Parker, 2002).

This brings us to the issue of the behaviouralist and institutionalist perspectives. It is important to realise that organisations are controlled by managers, who are unique individuals with specific attitudes, preferences, biases, perceptions and behavioural tendencies (Fairchild, 2004). Whilst the economic perspective calls for organisational decision making to be done with the use of rational tenets, it often shaped by the behavioural tendencies of managers as also by various cultural and institutional factors (Fairchild, 2004).

Although it has long being recognised that individual people are unique and that no two persons have the same type of mental makeup, thinking processes, and behavioural tendencies, the study of the implications of behavioural, cultural and institutional factors on organisational strategy has been taken up in earnest only in the last few decades (Baker, & Nofsinger, 2002). Studies in behavioural finance reveal that managers, when entrusted with personal or organisational funds, often behave in ways that cannot be explained by rationale or logic (Baker, & Nofsinger, 2002). Whilst managers are expected to take rational decisions after due examination and analysis of concerned issues, many strategic decisions are taken on the basis of heuristic mental processes that are governed by their attitudes, perceptions, socialisations and individual experiences (Barber & Odean, 2001). Managers, when confronted with challenges or called upon to make strategic decisions, often fail to act rationally and tend to take strategic decisions that are influenced in small or big ways by their attitudes, perceptions, beliefs and experiences, rather than by the specific demands and circumstances of the situations in which they are placed or the challenges that that they are called upon to confront and overcome (Barber & Odean, 2001).

The personal experiences of managers play a significant role in shaping their decisions. Managerial decision making is also influenced by phenomena like over confidence and the herd effect (Barber & Odean, 2001). Over confidence drives managers in charge of formulating strategy to take decisions on the basis of their hunches, their self esteem, and their belief in their own abilities, without considering and analysing the different aspects of the concerned situations (Barber & Odean, 2001). Such confidence and self esteem in decision makers can stem from a range of causes like family background, education, membership of professional associations, organisational status and past successes (Barber & Odean, 2001). Overconfidence however becomes dangerous when it leads managers to take inherently wrong strategic decisions without appropriate analysis and study (Barber & Odean, 2001). The herd effect comes into play when managers disregard rational and logical thought processes and adopt the ways of the majority, even when they know that such behaviour could potentially be wrong and result in adverse repercussion (Fairchild, 2004). The dotcom boom of the mid 1990s saw numerous organisations entering the sector without appropriate analysis only because many others were doing so (Fairchild, 2004). Such irrational and herd like behaviour and disregard for strategic decision making processes resulted in the collapse of numerous dotcom companies and a stock market bust that resulted in erosion of investor wealth (Fairchild, 2004).

Apart from the individual behavioural tendencies and predilections of managers, strategic decisions of organisations are also very often influenced by their organisational cultures. McKinsey and company famously described organisational culture as "the way we do things around here" (Richard, 2003, p 4). Organisational cultures are unique to individual organisations. Whilst they are externally manifested through various symbols and totems, as well as features like reporting structures and remuneration policies, they also govern organisational attitudes and perceptions towards existing and proposed working processes, dealings with the outside world, environmental challenges, innovation, and taking of risk (Richard, 2003).

Most traditional organisations have strong organisational cultures that are inward looking, hierarchical in nature, resistant to external influences, slow to change, and low on innovation. The organisational culture of company A, which has been producing generic products like yogurt for ages, is likely to have these characteristics. Such characteristics are likely to influence the company to stick to its traditional line of business, stay away from new ventures or products, and refrain from introducing product or process innovations. The company is also likely to be hierarchical in nature and have strong command and control HR policies, and will likely to be resistant to change.

Company B on the other hand is likely to be a new organisation with a young, educated, trained and diverse workforce. With the organisation being young, it is too soon for the organisation to have established customs and procedures, and the organisational structure is likely to be flat and participative rather than hierarchical and commanding. Company B is also likely to be far more innovative than A, because of the rapidly changing nature of the industry in which it operates, and be more open to taking risks. Such differences in organisational culture are expected to have significant influence on the strategic management processes two companies. The software writing company will be far more likely to introduce new products, engage in potentially risky activities, and provide greater empowerment to its employees than the company producing yogurt.

Apart from economic and behaviouralist / institutionalist perspectives, contemporary strategic management can be analysed meaningfully through the application of two important perspectives, the complexity theory and the critical theory. The complexity theory makes the point that business organisations are complex organisms that consist of a number of different strategies and structures and share the properties and features of other complex systems (Stacey, 1993). Complex organisations often display behaviour that is surprising and non linear in nature. Such unpredictable behaviour was attributed to general randomness before the surfacing of complexity theory. In actual reality, such randomness occurs because of the interplay of different structures and systems within complex organisms in response to internal or external stimuli (Stacey, 1993).

With the important finding of complexity theory being the essential ambiguity of the future, the assumption of managers about their job involving taking decisions to direct organisations in specific directions are seen to be delusional in nature (Stacey, 1993). Managements, affected by ever increasing information overload and complexity, can react by rejecting ambiguity, denying uncertainty and nailing down targets and structures.

With stability being the ultimate objective, commonsensible managerial reflexes often become counterproductive to organisational interest from the perspectives of complexity theory (Berry, 1998). The application of the complexity theory leads to the loss of primacy of analysis, as well as of cause and effect theories. Long term planning is considered to be impossible and visions are no more than self satisfying illusions. Statistical relationships are considered to be dubious and strong organisational cultures are felt to be dangerous for organisational interest (Berry, 1998).

Experts like Stacy (1993) assert that the elements of complexity theory need to be seriously considered by organisational managements and included in their strategic planning processes. Such experts distinguish between ordinary and extra ordinary management. Ordinary management, which is necessary to conduct problem solving and organisational activity on a routine basis is best done through the application of logical analytical processes, including setting of goals, evaluation of options, rational choice and implementation and monitoring through existing hierarchical structures (Stacey, 1993). Such management is required for organisations to perform in efficient and cost effective ways. Extra ordinary management on the other hand is required for organisations to transform effectively in dynamic and open ended circumstances, where rationalist decision making becomes significantly inoperative and organisations function in circumstances of chaos and unpredictability.

Stacy, (1993) states that such situations require organisational managements to access available organisational tacit knowledge and creativity, build informal structures, encourage communities of practice and build learning organisations. The taking of such steps will result in increasing organisational ability to (a) constantly adapt to new situations and (b) work without hard evidence and on the basis of new assumptions and analogical and intuitive decisions (Stacey, 1993). Experts on complexity theory espouse that organisations should enable ordinary and extraordinary management to coexist in such a way that organisations do not become too rigid or descend into anarchy. Organisational managements need to manage such boundaries, ensure the development of diverse organisational cultures and actively promote organisational democracy (Berry, 1998). The focus should be on an evolving agenda of issues rather than on a long term plan and stress should be given to the identification of behavioural patterns and their thoughtful use to drive the organisation forward (Berry, 1998).

The complexity theory runs against the grain of the traditional structures and steady environment of company A, but is particularly applicable to company B, with its dynamic and unpredictable external environment and its complex and charged internal environment. The senior management of company B could well increase organisational ability to respond and adapt to the dynamic business environment by making specific efforts to tap the tacit knowledge of its employees and encourage democratic exchange and freer communication, without the forsaking balance between such actions and routine organisational management.

Critical management theory explores issues of domination and power in organisations. Managements are viewed as sets of practices and discourses that are entrenched within asymmetrical power relations (Willmott, 2003). Such relationships systematically enhance the privileges, interests and viewpoints of particular groups, even as they silence and marginalise others.

Critical theory draws attention to the organisational dominance of rationality that is singularly obsessed in pursuing objectives (Alvesson & Sveningsson, 2003). The overwhelming body of strategic management literature focuses on the leadership role of senior management and is oriented towards managers who aspire to reach the top. Strategy is perceived primarily to enhance market positioning, discipline labour, sustain social legitimacy, influence regulatory policy, enhance the status of builders of strategy and demarcate arenas of influence (Willmott, 2003). Strategy in the eyes of critical theorists is basically political and focuses on the construction of hierarchical and oppressive structures, where disadvantaged groups not only accept but also reproduce their subordinate positions by accepting ruling ideas (Alvesson & Sveningsson, 2003). The Porter's 5 forces analysis, for example, indicates that corporate strategy should enhance competitive leverage over other market participants, suppliers, and potential entrants. Such strategic practice aims essentially to concentrate economic power, build monopolies and oligopolies and weaken competition (Willmott, 2003).

Strategic management, as viewed through economic perspectives, deserves to be investigated critically because of its dominance in contemporary managerial discourse and in modern day decision making (Levy, 2005). The use of critical theory by managements can help in revealing assumptions and ideologies that are embedded in the practice of strategy and challenge its representation as a politically neutral tool for improvement of organisational performance and effectiveness (Levy, 2005). Such thinking can question the widely accepted universality of managerial interests and reveal latent conflicts. It can help managements to go beyond the consensus on organisational objectives and provide more attention to values and means (Alvesson & Sveningsson, 2003). Whilst strategy is important to carry forward business, critical theory asks managements to constantly question their age old dogmas, think closely about their organisational structures, investigate arenas of influence and increase the democratisation of their organisations and the participation of greater members of the workforce in organisational decisions (Alvesson & Sveningsson, 2003). It also helps managements to understand the social and environmental consequences of their strategic actions through critical and different perspectives and adopt more socially responsible agendas (Levy, 2005).

This essay deals at length with the analysis of strategic management through four different perspectives. Whilst modern day management is essentially dominated by the economist perspective and the concept of rational decision making, actual decision making is often shaped by behaviouralist and institutionalist factors. Organisations also need to realise the complexity within and without their organisations and take steps to balance routine work processes with the development of adaptive abilities. Critical management theory asks organisational managements to deeply question their established dogmas, practices and believes and adopts constructive steps to bring about a fairer world, both within and outside their organisations. Its use can help managements in adapting their strategies to ensure greater organisational democracy and more equal workspaces. The use of these perspectives enables organisations to engage in holistic analysis and adopt strategies that are specifically suited for all round progress.


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