Final Project: Organizational Strategies for Growth Tamara Mobley OM8102 Dr. Langford Capella University June 18, 2010 Abstract Today, many organizations struggle with implementing realistic strategies for growth. More than ever leaders are faced with developing and implementing strategic plans that promote organizational effectiveness while addressing potential threats. Through research I have discovered that there are several approaches or perspectives that leaders can take when developing organizational strategies for growth.
According to Porter, (1996) in regard to strategy organizations “Must be flexible to respond rapidly to competitive and market changes…They must benchmark continuously to achieve best practice” (p. 61). Although benchmarking plays an important role in strategic planning it does not define strategy. Strategy involves more than just planning. “Strategy is the creation of a unique and valuable position, involving a different set of activities” (Porter, 1996). There is no question that the implementation of strategies such as: environmental scanning, and conducting a S. W. O. T. nalysis will potentially add value to the overall success of an organization. This project will discover strategies for growth that will enable organizations to achieve overall effectiveness. Organizational Strategies for Growth According to Nevis, DiBella, and Gould (1995), “when starting to improve its learning capabilities, an organization may decide to focus on any stage of the leering cycle: knowledge acquisition, dissemination, or utilization” (1995, p. 73). Knowledge management is key when transforming an organization into a learning organization. Knowledge Management Systems
Knowledge management systems (KM) has been an important factor or component when seeking effective organizational management. A component based knowledge management system integrates components that define and describe the solution area required by the organization to achieve its objectives and end state goals. The main components of a knowledge management are: Externalization is capturing knowledge in an external repository and organizing it by some framework in an effort to discover similar knowledge. Technologies that support externalization are imaging systems, databases, workflow technologies, and document management systems.
Internalization is the process of identifying knowledge, usually explicit, relevant to a particular user’s needs. It involves mapping a particular problem, situation, or a point of interest against the body of knowledge already captured through externalization. Intermediation is similar to the brokering process for matching a knowledge seeker with the best source of knowledge by tracking the experience and interest of individuals and groups of individuals. Some technologies that facilitate these processes are groupware, intranets, workflow and document management systems.
Cognition applies the knowledge exchanged preceding three processes. This is probably the knowledge management component that is most difficult to automate because it relies on human cognition to recognize where and how knowledge can be used (Ali et al. , 2004). By Implementing knowledge management systems organizations will definitely increase organizational effectiveness which in turn will increase employee retention, productivity, and profitability. Upper Echelons Theory The upper-echelons theory, as described by Hambrick and Mason (1984), directly impacts or influences organizational leaders.
Organizational outcomes, such as strategies and performance, often times reflect the characteristics of organizational leaders. Hambrick and Mason argued that both strategic choices and organization performance are intertwined with the characteristics of the top managers in an organization. Their upper-echelons theory is based on the belief that top managers configure decision situations to fit their view of the world. The allocation of resources is also another way upper echelon leaders have significant impact to an organization (Schein, 2004).
These leaders are the top decision makers on the allocation of resources (i. e. , human, technology, money, etc. ) to both individuals and organizational units (Nahavandi, 2006). While rewarding employees encourages specific “behaviors and decisions” that fall in line with the culture of the organization, leaders who act as role models and enact standards for decision making have a greater impact to the organization. For example, an upper echelon leader may ask their top sales managers to develop a strategic sales plan that will accomplish the goals and objectives of the organization.
Although, he does not dictate how they accomplish those objectives, he can be assured they will accomplish the desired outcome by setting decision making standards and clear guidelines. By utilizing these processes, upper echelon leaders essentially create a mirror image of their own personal style, values, preferences and experience. In addition to the ability for leaders to affect the vision, mission and strategy of an organization, upper echelon leaders have a direct relationship with management, which plays a vital role in restructuring strategies, dictating decision making and setting the climate or structure of the organization.
For example, a CEO may want to push the development of a new product, so the CEO may dedicate a large portion of the overall budget to the research and marketing business units and pull funding from other business units which are of lesser concern. Ultimately, it is organziational theories practiced or studied by leaders that enables aspired outcomes. Organizational Theories Organizations have different perceptions of the environment and how organization environment assists with understanding both theory and practice.
Hatch and Cunliffe’s introduction began with explaining some important terms (theory, concept, and abstract, phenomenon of interest, ontology, and epistemology) related to organization theory. Hatch and Cunliffe (2006) suggest that “the concepts and theories of a particular perspective offer you distinctive thinking tools with which to craft ideas about organizations and organizing” (p. 11). Organizations have different perceptions of the environment and how organization environment assists with understanding both theory and practice. Extensive studies of rganizations, with an evaluation of different theoretical perspectives have contributed to the growing knowledge of organizations. These perspectives have contributed to our knowledge about organizations. Different perspectives can individually and collectively help leaders understand and manage organizations in differently. Management can be reserved for internal purposes alone assuming that classical theories and practices are adequate. But when the external environment is a factor there isn’t an organization that can continue as a closed system.
In an organization environment; modernist, symbolic, and postmodern theories all aid in developing an understanding of organization theory and practice. Organizations should consider the following five-step, resource-based approach to strategy analysis when developing new strategies: 1. Identify and classify resources in terms of strengths and weaknesses. 2. Combine organizational strengths into detailed capabilities and core competencies. 3. Estimate the profit potential of capabilities and competencies in terms of their potential for sustainable competitive advantage and the ability to generate profits resulting from their use. . Select a strategy that best develops organizational capabilities and competencies relative to external opportunities. 5. Identify resource cracks and invest in turning weaknesses into opportunities. Strategy as technology leadership Advancements in technology have shaped the way that leaders conduct business. Faced with competition from new technologies and rapid introductions of new products by their competitors, leading companies are beginning to focus on improving technology management, the link between product strategy and product development (Anders, 1999).
Organizations can achieve significant R&D performance improvements by implementing technology management best practices used by leading organizations to manage the development and implementation of new and emergent technologies. New and emergent technologies separate organizations from the competition. The strategic innovation framework weaves together seven dimensions to produce a range of outcomes that drive growth. Core technologies and ompetencies is the set of internal capabilities, organizational competencies and assets that could potentially be leveraged to deliver value to customers, including technologies, intellectual property, brand equity and strategic relationships. Strategic Analysis Tools S. W. O. T. Analysis There are major strengths and weaknesses, as well as several threats and opportunities that organizations face. Cisco’s S. W. O. T. analysis is shown as follows: Strengths • World Class Pioneer • Diversified Products • After-sale Support • Certified Training Program Weaknesses • Uncompetitive Price Few Distributor and Integrator in China Opportunities • Expandable Market in IndiaThreats • Uncertain 3G Wireless Plan in China • Favored Domestic Rivals in China • Intellectual Property Right in China Threats • Acquiring telecom licenses required to operate is also complicated. • Limited amount of proper radio spectrum available. • The ability to communicate with text, voice, and images over the internet is becoming increasingly popular. Peer-to-peer communication over the internet via an ISP is a bargain for consumers and represents a threat to Cisco’s business infrastructure. The S. W. O. T. nalysis can be categorized as strategy as rational thought. Strategy as rational thought presumes that a predictable future allows decision makers to carefully analyze risks to choose a course of action that maximizes results. Conducting an S. W. O. T. analysis gives organizations the ability to respond effectively to unforeseen events. PEST Analysis In regards to environmental forces, a PEST Macroeconomic analysis will reveal that political and regulatory, economic factors and social and cultural influences, and technological innovation all have a direct effect on business and operations within an organization.
Managers are responsible for the success of an organization and concerned about the effect that factors in the external environment have upon it. Managers cannot control the external environment but they need to identify, evaluate and react to those forces outside the organization which may affect them. Political and Regulatory influences Organizations have to comply with regulations that exist within political and legal systems. Complying with domestic laws are simple tasks for organizations, but if organizations don’t comply with international laws the results can be harmful to both their reputation as well as their business.
International law has a dominant influence on an organization’s business. When developing an understanding of international law organizations have to consider are taxation, government spending, industrial policy, business relations with other countries, employment and consumer law, competition policy, environmental protection and foreign trade regulations. All of these things factors determine whether or not an organization will have a long-lasting presence in the global marketplace. Economic factors and influences
According to Beinhocker, (1997) “economists and managers need a new model if they are to understand the workings of today’s economies and markets” (p. 24). Organizations can not avoid being affected by the economic environment, there are not any exceptions. The state of economy today is at an all time low. Organizations have to continuously monitor the economy its trends in an effort to develop new strategies and adapt to the current market. There are three primary economic factors that affect most businesses.
These factors are: inflation, exchange rates and interest rates. Risk Analysis When developing new technologies and ways in which to market those technologies to consumers, organizations must conduct analyze the risks involved. Marketing in the 21st century is all about catering to the consumer. Parvatiyar et. al believes that “the marketplace is characterized by higher levels of diversity by income, age, ethnicity, and lifestyle” (Parvatiyar et al. , 1995). In recent years market diversity has led to the need for strategic frameworks.
As markets separate into condensed groups, the concept of a mass-marketing is slowly diminishing. More and more organizations are beginning to target individual consumers. WebEx is a training tool that is efficient, cost effective, and convenient. Utilizing WebEx will enable organizations to reach markets on larger scales while catering to the needs of its consumers and or partners. Organizations realize that catering to the consumer is becoming increasingly important, especially in competitive markets.
According to Jiang, (2000) “In an environment presented by today’s destabilized and unpredictable markets, we have reason to believe that viewing a company through the mass-customization lens will provide a framework to guide the organization successfully through the competitive minefield” (p. 215). Frameworks are often used to identify and add value to important aspects marketing research. In regards to risk management and developing framework Sifri, (2002) states that “a successful strategy for managing IT project risks must be built on a solid foundation of corporate understanding, commitment, and support.
To establish that framework, a risk management strategy must begin with a three-part effort: establish a risk glossary for a consistent understanding of terminology, set up processes for identifying, analyzing, planning, monitoring, and controlling risks, and identify the tools and techniques that would support the framework” (Sifri, 2002). The intent of the framework approach is to serve as reference and training tool for market researchers, quality assessment and determination of the communal area. Framework is expected to: a. Provide a basis for realistic action and implementation; . Provide assistance in determining roles, responsibilities and accountabilities c. Highlight areas that need to be developed d. Set targets and benchmarks to measure progress and identify marketing issues There are both benefits and risks of framework models. Benefits include: providing total consumer experience and increase customer satisfaction. The risks or challenges involved with framework include: participation, implementation, and ways in which to measure the metrics. Regardless, frameworks have can provide assistance at both the start and finish of marketing segmentation.
Application Conducting and implementing research strategies will give organizations a clear picture of how their role is linked to the overall goals. This facilitates cooperation and coordination of efforts towards a common cause. Realizing the strategic direction of the organization allows management to realize opportunities for growth and success. It promotes an increase in profitability and an understanding of entering into global markets. The development of new technologies exposes the cause and effect correlation between new technology investments and global marketing.
While a company devotes time and resources to planning, analyzing, and implementing new technology, the technology itself may be rapidly changing. In an effort to gain a competitive advantage organizations should consider creating a balance between times invested in strategic marketing with the velocity of their competition. By cautiously analyzing financial planning and cash flow, sales and market growth, and the company’s internal and external environments, my case company can develop a marketing plan that will result in both productivity and profitability.
Strategic marketing for my case company provides the vision and direction by which the company’s technological resources play a role in realizing a bright future in going global. Organization Effectiveness Organizations are constantly analyzing the environment and developing ways in which to adapt to the environment in an effort to meet end state goals. For instance, Cisco may be teaming up with President Obama’s administration to utilize information technology and innovation to encourage future economic growth and job creation across the globe. This partnership is an example of ambiguity and institutional theories.
With the development of new and emergent technologies Cisco Systems, Inc needs expertise beyond its current capabilities. If organizations hope to execute strategies for growth and dominate the fast-growing market of information technology both symbolic-interpretive and postmodern perspectives should be implemented in everyday business practices. Implementing symbolic interpretive perspectives will assist organizations with maintaining positive employee relationships resulting in an increase in employee retention rates. Loyal employees are more productive and will ultimately assist organizations with increasing profitability.
In addition to building strong employee relationships, the symbolic interpretive perspective will assist organizations with developing and maintaining strong business partnerships assisting with maintaining their global status in worldwide markets. Viewing opportunities or threats realistically will prepare organizations for what is to come and will enable the organization to develop achievable goals. Conclusion In organizational environments; symbolic-interpretive and postmodern perspectives both assist in developing an understanding of organization theory and practice.
Organizations can realize the benefits of becoming familiar with knowledge management and upper echelon theories. An organization’s research strategy is imperative when seeking to meet end state goals. The strategy should strive to integrate a company’s marketing goals, policies, and tactics into meeting end state goals. Utilizing research methodologies will assist organizations with discovering tactical measures to be used when conducting strategic research. Market segmentation is one way to implement research strategies.
Implementing research strategies will assist organizations with identifying the benefits of utilizing WebEx to enter into new markets, the solicitation of new customers or to gain a competitive advantage. After all, an organizations’ primary goal should be to create strategies for growth that will appeal to consumers and ultimately increase profitability.