3.10.4 Problems with strategy and why strategies fail Flashcards
planned strategy
the strategy the managers intend to implement
emergent strategy
the strategy that actually develops over time
divorce between ownership and control
occurs when the owners of a business do not control the day-to-day decisions being made
contingency planning
occurs when a business plans for possible but unlikely events
strategic drift
occurs when the strategy of the business no longer matches with the environment in which it operates
corporate governance
the systems and process that are in place to monitor and control how business is run
strategic decisions
major decisions, involving large degrees of risk and a very high level of uncertainty
difficulties of deciding which strategy to choose
- opportunity cost
- threat of new entrants
- managers may be biased towards their own ideas
- external environment
difficulties of implementing a strategy
- overcoming resistance
- alignment with business’ core values
- poor communication e.g. duplication of effort
lack of resources e.g. raw materials, money, skilled labour
features of a planned strategy
- a clear vision
- defined mission and values
- measurable goals
- a SWOT analysis
- an action plan
- performance measures
benefits of a planned strategy
- improved decision-making
- enhanced resource allocation
- increased organisational alignment
- better risk management
- the ability to seize opportunities for growth and innovation
limitations of a planned strategy
- becoming outdated in dynamic environments
- stifling creativity
- potentially leading to tunnel vision if followed rigidly
- requiring flexibility and adaptability
features of an emergent strategy
- flexibility
- adaptability
- a focus on learning and experimentation
benefits of an emergent strategy
- increased flexibility
- agility
- the ability to adapt to changing environments
- allowing businesses to gain a competitive edge
- foster innovation through trial and error
limitations of an emergent strategy
- potential for short-term focus
- strategic drift
- difficulty in control
- challenges in achieving pre-defined goals
reasons for strategic drift
- failure to act quick enough
- failure to recognise change
- the assumption that the brand name will ensure survival despite the strategy
- reactive decision made to activity in the external environment
reasons why strategies must be checked and reviewed
- to assess whether it is successful
- eliminate risk
- reflect changes in the market e.g. avoiding strategic drift
- to review progress to reward employees
- finding errors
- reviewing ethics of the decision
benefits of strategic planning
- its a form of scientific decision making - its based on data (likely to be more successful)
- helps provide everybody with a sense of direction - they plan out the tasks that needs to be done
drawbacks of strategic planning
- the external environment is dynamic (constantly changing) so therefore needed to be checked regularly to make sure strategy is fit for environment
-strategies often evolve over time - it is heavily detailed
