Introduction To Business Strategy And Planning Commerce Essay

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According to Gareth R. Jones and Jennifer M. George, planning is "identifying and selecting appropriate goals and courses of action," and strategy is "cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals."

In general there are three steps to follow when planning, 1. organization must determine its goals and missions, 2. organization must formulate appropriate strategy for their business, 3. implementing strategies and allocating resources properly to achieve the given strategies.

Transformational strategy

It is a plan of action to change/shift an organization's operating course over many years, however transformational planning can be done on short term horizons. In general transformational planning involves five steps: 1. Goal definition, 2. Review of alternatives, 3. Strategy selection and formulation, 4. Execution strategy, 5. Monitoring strategy.

Use of transformational strategy in modern day organizations.

Organizations in modern day are facing more challenges and competition than before, the environment they live in is constantly changing many external factors are affecting organization's growth. Transformational strategy gives organization flexibility to change or transform the information and planning which helps organization to make better decision depending on the given situation or condition.

Science of muddling through

It is sometimes also known as "branch method", it is a process of decision making where decisions are made step-by-step and in small degree i.e. without making any aggressive change the process goes slowly and steadily. Strategies are developed keeping the current situation as the base.

Use of muddling through in modern day organizations

Muddling through can be seen as small step by step process of decision making, however if we consider an organization with many administrators, all the administrators take individual small steps. Today organizations are facing complex problems, breaking the complex problem into small units helps to understand and solve the problem more effectively and efficiently. The small units or problems are dealt by an individual administrator and finally the collective steps of administrators or individuals are what solves the complex problems and helps organization to grow.

Incremental process

Action plan and resources of an organization play vital role in implementing a business strategy. Action plan in general, contains incremental steps which normally deal with actualizing the strategy and helps organization to measure the development and understand the process and evaluate time-to-time to make sure everything goes fine.

Use of incremental process in modern day organizations.

Evaluation of strategies or development is a very important process in any organization. Making sure that development process is in order and as planned, plays very vital role in the organization's growth. Incremental process in the strategic planning helps organization to keep track of what to do, when to do and helps it to identify any problems in the process, so organization can develop new strategies to manage the problem before it threatens the organizations survival.

Strategic drift

Strategic drift can be explained as a drift from the planned strategy or if an organization takes precise steps to change the goals and mission in order to cope with unplanned outputs. In general strategic drift occurs with improper planning or improper performance, however strategic drifts are not always bad for the organization.

Use of strategic drift in modern day organizations

As the dimensions of corporate culture and managerial actions are continuously changing in today's corporate environment, organizations are facing instability and so to reach the goals set before some years is sometimes not what they want today. Strategic drift allows organization to make changes to the strategies they made sometime before and helps to get a different and desired output. However there are many theories explaining how to manage strategic changes.


Strategies are developed in many levels, like business, corporate, and operational levels. Strategies play a vital role the development of the organization, there are many theories on how to choose strategies with respect to situations, cultures, markets and many more. Tools like SWOT, PESTEL help organization to develop strong statistical date which then can be used to develop best strategies.

In today's environment with growing fuel rate and unwanted natural disasters transforming, drifting strategies helps organizations to stabilize themselves in the instable market. And processes like muddling through and incremental process helps organization to face complex problems and evaluate the positions and process they are taking to reach their respective goals.

Task 3: Distinguish prescriptive and emergent theories of corporate strategy and their relevance to organisations.

Introduction to Corporate Strategy

Corporate strategy deals with the overall purpose and scope of the organization, these strategies involve specifying long term goals and objectives of the organization, which helps organization to develop and deal with uncertainty in the external business market; these strategies also help organization to allocate resources effectively and efficiently. With increasingly dynamic and highly competitive global business environment, organizations are in need of powerful ways to formulate the strategy.

Difference between prescriptive and emergent theories of corporate strategy in relevance to organizations

The prescriptive approach regards strategic development as a systematic and deterministic process to analyse the vision, goals with respect to resources of the organization, whereas emergent approach puts the idea forward that strategy can be unplanned, developing incrementally over time as a business adapt to a changing reality.

Approaches to prescriptive theory include Porter's five force model for analysing industry and value chain analysis which increases competitive advantage, and in emergent approach formulation of strategy runs parallel to implementation in many organizational levels and stresses more on value of knowledge as core organizational competence for gaining competitive advantage.

According to prescriptive theory an organization's logical and analytical approaches allow them to devise predictive strategies form which they can meet new opportunities, whereas an emergent approach leads to more creative and responsive strategy development, which can help organization to face high-competitive market.

Prescriptive approach allows a greater degree of control over different business units and helps to reduce complex activities, where as emergent approach intentionally creates misfits between factors to challenge the status. Hence, it is more suited in organizations which are transforming, diversifying or restructuring.

A notable disadvantage with emergent theory is, raise of conflicts in merging process, when two organizations merge with different strategies about development and growth conflicts can raise and destroy both the organizations. It is also possible to miss valuable opportunities when an organization is developing and implementing strategies simultaneously.


In the today's constantly changing and highly competitive market it is necessary that an organization has to develop and implement proper strategies to survive and grow. So, instead of looking at each theory independently, an organization can use them together; both of these approaches reinforce each other. Quinn in a recent approach "logical incremental approach" proposed using both the theories can help an organization.

Task 4: Clarity process by which organisation identify their goals and values

Goal identification

According to Etzioni and Garry, 1983, existence of an organisation depends on the goals that it chooses and strategies it follows to achieve the goals. Understanding the goals and developing strategies to achieve the goals are the first steps of any organisation. There are different levels of goals, strategic goals which deal with the organisational goals, tactical goals, which deal with individual departments in the organisation and their outcomes, operational goals, which deal with specific groups, individuals and what is expected from them.

Goals describe what an organisation wishes to accomplish in the future, and are the end towards which an organisation's efforts, strengths, and strategies work. Not only what an organisation wants to accomplish but how and why it is interested to accomplish the given goals plays a vital role. As an organisation depends on stakeholders, what are the demands of the society or individuals in the society, what services or products they are looking for, is not only the question. To develop a service or product, organisation needs resources and the value of the resource should be less than the value of the product and if not the organisation cannot survive. So, resources an organisation has in its hand also play a vital role in identifying its goals.

For example if an organisation's goal is to provide solar energy, it is in need of sufficient sun light, many areas near north pole has less or insufficient sunlight so, they cannot produce solar energy. If organisation's goal is to refine oil, it not only need machines, human resource, technology but mainly crude oil to refine it, and only some areas in the world has crude oil as natural resource. With increase in globalization and competition effective goal setting is very important for an organisation, even though there are many levels of goals, some points can make them effective like goals should be challenging but reachable and measurable, goals should be defined time-to-time, and proper strategies should be developed to attain goals in this fluctuating and changing environment

Value identification Organization has different types of values, organization's core values are beliefs, that organization holds near and dear. Generally core values of the organization stays same without any change, change in products or business strategies or business itself cannot change core values. Values of the organization can determine ideology of the organization like, how organization deals with its employees, and its customers, etc. it is mainly based on moral and ethical basis of the founders of the organization than the prices and profits of the organization. For example core values of Accenture are stewardship, best people, client value creation, one global network, respect for the individuals, and integrity. Organization's valuation also deals with profitability and profit growth, profit growth deals with selling more products in the existing market and finding new markets for the products to help the growth of the organization. Some of the strategies used by the organization to create value are low-cost strategy, which decreases product cost through decreasing production costs and differentiation strategy, to increase awareness and attractiveness of the product.

Task 5: Appraise the conflicting needs, power and influence of stakeholders

Introduction to stakeholders

Any individual, group, or society, or other organizations, which gets affected or can be affected by an organisation's actions, are stakeholders of that organisation. Organisation also depends on them to full fill its goals; many organizations develop products and services depending on the needs of individuals, groups, or societies so, the dependence is mutual.

Conflicting needs of stakeholders

Vast group of individuals or groups can be considered as stakeholders, and as different individuals or groups interests are different, conflicts are common between stakeholders. Some of them are

Increase in salaries of employees can decrease dividend, here employees are satisfied but not the people with dividends. Management's interest lies in organisation's growth, but this may decrease organisation's short term profits. Growth of the organisation may give a negative impact on the environment, in case of organisations producing plastic products. Supporting the environment may increase expenditure on resource and development of the organisation. According to Cyert and March, the goals, aims or an organisation are a compromise in between individuals and groups of a coalition made up of the stakeholders, "A Behavioural Theory of the Firm (1963)"

Power and influence of Stakeholders

An organisation's strategy can be influenced by external and internal stakeholders. External stakeholders include competitors, customers, suppliers, government, etc. And internal stakeholders include managers, employees, strategy developers, etc.

Any change in external stake holders needs, or necessities has a direct influence on the organisation, i.e. if the customers want a new product or competitors are launching better product, or if government is increasing tax payments, any change in the external environment has affect on the organisation, it may be good or bad. Formal power or Hierarchical power can be seen with internal stakeholders; managerial needs or employees needs may conflict with the organisation's needs.

An power of the organisation within itself depends on the status, how strong the management is working, how effectively organisations is able to use resources, what is organisation's aim and how organisation is reaching it, and what are the strategies that organisation is dependent on to reach its goals in future. For external stakeholders power indicators are what customers are looking for, can be achieved by market research, what is societies expecting from the organisation, and what are the natural resources that are available in the society are some of the external powerful factors which can influence an organisation.


Organisations and stakeholders are mutually dependent on each other. One's needs and necessities can affect another and as the organisation cannot satisfy all the stakeholders, organisations employ stakeholder managers, who work with organisation to compromise or decrease conflicts between stakeholders. Formal and informal powers i.e. organisation's hierarchical power and external stakeholder power always have a strong impact and influence on organisation's strategies and growth.

Task 7 & 8: Means by which organizations develop their mission, vision and strategic intent, and theories supporting value of vision, mission and objectives

An organization's mission explains the purpose of organizational existence i.e. the reason organization existing in the market for both the organization's founders and stakeholders, and it doesn't depends on the profit margin or value of the organization. Vision of the organization answers the question like, what that organization wants to be in future or what that organization wants to accomplish through its existence. Identifying and developing, both mission and vision are primary steps for any organization.

Developing vision and mission strategies There are mainly three types of strategies in the organization, enterprise strategy, which is a long term plan, takes more than 3 years, business strategy, which is neither long nor small term plans, and finally operational strategies, short term strategies or tactics to deal with day to day operations. Vision and mission strategies helps organization to clarify their objectives, which then can motivate its employees and stakeholders, also helps organization to evaluate its operations and process time to time to make sure it is on its way to achieve its goals. Some of the factors which can drive strategies of the organization are ideology of the organization and legal policies which are concerned with internal management, and political and regulatory factors, and procedures which are concerned with external stakeholders.

Strategic intent

It the process, the organization is going to take to realize its vision, it provides point of views about the organization's long term vision and sense of direction. It also provides opportunities to explore new possibilities for the organization. Strategic intent to provide clarity: Vision of the organization is a long term process developed by the founders of the organization, so it may not help stakeholders to understand what organization wants to do. Strategic intent increases clarity of the vision and mission statements of the organization to stakeholders to influence them and motivate them towards the organization's vision. Strategic intent help to focus: once management and employees are clear about the vision and mission of the organization, they can focus on strategies and processes to achieve them like, using and developing new strategies to gain competitive advantage, decreasing in prices, etc. Strategic intent to inspire stakeholders: Once they are clear about organization's vision and mission, and what are the strategies to achieve the vision and mission, executing the strategies to reach goals increases the growth of the organization, and also creates meaning for the employees work order thus inspiring and motivating stakeholders.