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Introduction
Although there is still widespread agreement that strategic thinking is required for efficient firm management, it is usually absent or, at best, poor (Bonn, 2001; Liedtka, 1998). The implementation gap is marked by a long history of misunderstandings among both scholars and practitioners, with the terms strategic thinking, strategic planning, and strategic management being employed interchangeably (Mintzberg, 1994). According to Goldman and Casey (2010), there is a gap in practice as well as a dearth of research on strategic thinking. In research spanning sectors and nations, top executives lack of strategic thinking has been highlighted as a key detractor of corporate performance (Bonn, 2001). Bonn (2005) argues that strategic thinking, by definition, facilitates the understanding and molding the future, and as such, it must be capable of challenging present views and changing minds. On the other hand, according to Bonn (2005), a panel of experts named strategic thinking as one of the ten most important topics of study in strategic planning. Additionally, both leaders and strategy theorists have retorted that strategic thinking is essential at all levels of a firm.
According to Goldman et al. (2015), there is a widespread agreement on the importance of strategic thinking and general recommendations that it should be fostered by organizations. As a result, there is a scarcity of literature on what corporations do to assist leaders, managers, and those employed by the company in developing their ability to think strategically. Furthermore, there is no clear technique for how they do it, why they do it, or how effective their efforts are. Eisenhardt and Zbaracki (1992) claim that strategic decision-making is key among strategic process issues in the context of strategic decision-making. It is crucial since it comprises vital decisions that determine a companys fate. Many studies have recognized the topics relevance throughout the previous 30 years by addressing challenges in strategic and, more generally, corporate decision making processes. A brief examination indicates, however, that the fields personality resembles a crazy patchwork of opinions. A deeper examination reveals a field built on mature principles and faulty assumptions.
In the instance of strategic planning, perhaps the more insightful author detailing how this notion has been misinterpreted is Henry Mintzberg. When strategic planning first debuted in the mid-1960s, corporate executives embraced it as the single best tool to develop and implement plans to improve the viability of each business entity. Planning systems were intended to provide the finest plans as well as systematic instructions for implementing those approaches so that the doers, or company managers, could not be correct (Mintzberg 1994; p. 107). As we already know, planning has not always gone as planned.
Through a survey of the literature, this article argues that, since 1985, firms have lacked the right implementation. Due to a frequent misunderstanding of the many strategy theories, many practitioners use corporate strategy in their profession. It also tries to define unique insights into strategy thinking, as well as uncover linkages and meanings between these three separate conceptions of strategy thinking, planning, and decision-making. Further, an association between strategy, change and innovation is discussed in effort to improve a strategic thinking culture while also generating deeper study into the case of strategic thinking and its influence on business profitability, specifically when assertions for change efforts are made owing to the need for long-term growth.
The paper begins by introducing a company as a case study (ABC Inc.). This is followed by distinguishing between strategic planning and strategic thinking, then develops on each concept to finally link it with the decision-making process The article finishes by addressing current changes in organizational strategies as a result of sustainability needs, as well as how strategic thinking execution will be crucial for organizations future innovation and success.
ABC Inc. is a market leader in the fashion design via technology business. The capacity of this firm to conceive, analyze, execute, and evaluate successful management strategies ahead of its competition has been linked to its success. Because of this organizations foresight, it has been able to remain competitive and sustainable and successfully compete. An assessment of the CSR as an approach to managing practices is undertaken as part of the study of this firms operations to guarantee that this organization adopts the most successful strategies. For example, Adam Smith defines a commercial venture as primarily an individuals work that stays completely incorporated in the greater community and is susceptible to its moral obligations (Norman, 2018). He contended that a corporation, the society, its normative framework, and other concerned citizens must all be linked and developed in tandem. Smiths concept of business entailed integrating business players into societys broader context. As a result, society as a whole offers a framework, which is the moral compass outlining the correct ideals by which all community members must be steered, even in business.
Literature Review
Importance of Strategy for Companies
According to Mintzberg (1978), a significant body of research named strategy formation in the private sector, which investigates how corporations create and link their major conceptions of strategic decisions. As per Liedtka (2000), the spectrum of strategy has been essentially focused with the quest of protracted competitive advantage, and as the rate of modification in the industry accelerates, this emphasis translates into a strategic plan involved with equipping organizations with the capacity to deal efficaciously with these environmental changes. So the research goes on to detailing what strategy is and why they need it, and while these concepts and ideas disagree, one clear conclusion emerges: strategy is essential to enabling them to meet their goals, goals, and therefore expand.
Strategic Thinking and Strategic Planning
Ansoff (1965) states that, as every knowledgeable executive understands, a large part of an employer s time is populated in a daily course of constructing multiple different decisions. Therefore, the quest for the appropriate strategy for improving decision making and strengthening competitive advantage has disturbed many managers and corporate leaders (Mintzberg, 1994). This appears to be the case even today, as Reeves et al. (2015) affirm that in a changing business landscape has never been more crucial to adopt the proper approach to strategy, as the world is changing quicker and growing more unpredictable and sophisticated by the day.
Mintzberg (1994) drew attention to the fact that businesses were confusing terms such as strategic planning, thinking, and computing, as well as goals and objectives, which would only take them in the wrong way. He is unwavering in his belief that strategic planning is not strategic thinking. (p. 107). According to Heracleous (1998), an examination of the literature demonstrates that there is no consensus on what strategic thinking is, what strategic planning is, or what their connection should be. According to Mintzberg (1994), Planning has always been about evaluation: breaking down a goal or set of intentions into phases, formalizing those procedures so that they can be completed very simply, and stating the expected consequences or impacts of each step. Strategic thinking, on the other hand, is concerned with integration. It requires intelligence and innovation. Strategic thinking results in a cohesive picture of the organization.
Steptoe-Warren et al. (2011) reach the following conclusion: The goal of strategic thinking and decision-making is to secure the organizations survival in a competitive environment. Effective strategic thinking and decision-making that directs the business in the most suitable path are required for this to succeed.
Corporate Social Responsibility (CSR) as the missing link in Strategy
CSR is not a new notion; social responsibility has been a recurring theme in business thought since the seventeenth century. However, the concept of CSR has maintained one of the most perplexing concerns among researchers, as well as among involved parties. For example, Latapí Agudelo, Jóhannsdóttir, and Davídsdóttir (2019) saw CSR as a hazy notion but claimed that understanding it from a management perspective was the best approach to execute it. They stated that a lengthy, complex reasoning process might be utilized to support some socially responsible corporate actions that have a high likelihood of providing long-term economic advantages to the firm, therefore compensating it for its social responsibility. However, McGuire presented a more precise definition of CSR, arguing that a companys social responsibility extends beyond its legal and economic requirements; it contains some societal tasks that are beyond its core commitments (as cited in Carroll, 2021). However, McGuire faltered to elucidate the precise social responsibilities of a corporate in definition (as cited in Carroll, 2021). However, it was later expounded to mean that a firm must be concerned with the entitlements of the society, ideology, training, staff satisfaction, and the entire social world.
Since its inception in the 1950s, several circumstances have contributed to a wide emergence of literature and growing interest in the subject. These considerations include the development of CSR research, which has resulted in the creation of concepts, hypotheses, strategies, and issues that have piqued the interest of many academics (Ashrafi et al., 2018). The quantity of information available regarding the notion of CSR is the second element. The current corpus of material, some of which are contradictory, have resulted in a poor image of CSR and uncertainty in CSR practice considering the complexity of the issue and questions regarding a businesss responsibilities (de Jong and van der Meer, 2017). Finally, there is a disconnect between CSR principles and application.
The differences in definition and uncertainty concerning CSR practice are related to the reliance on individual ideas of responsibility; these perceptions are included into the wider theme of an institutions role in society. CSR has several dimensions, which are sometimes portrayed as a unified concept. The social component, which encompasses community programming and community participation, is one of the aspects (McLennan and Banks, 2019). The economic dimension involves the establishment of career prospects for community members, while the environmental dimension includes pollution control and environmental protection (Alamoush, Ballini, and Dalaklis, 2021). Under the CSR framework, firms are supposed to consult with their stakeholders to choose the appropriate course of action for each CSR dimension (Hategan et al., 2018). Therefore, a single definition of CSR is widely recognized since it highlights various practical perspectives of CSR.
The initial perception of a firm following a CSR strategy is one that is accountable in its operations to its internal stakeholders, which include workers, clients, vendors, and investors. The second perspective covers a firms function in relation to the norms imposed by states regionally, internationally, and globally. The final point to consider is a companys performance as a responsible part of the society, both locally and worldwide.
The variety of tactics has caused consternation among businesses, consumers, and governments. According to Hategan et al. (2018), there is a need for more coordination across projects addressing essential components of achieving the CSR agenda. The partnership should establish a consistent framework for outlining what needs to be done, how it should be done, and how performance should be monitored. According to the author, having this level of global concord can lead to the establishment of a widely acknowledged framework for CSR execution. He contends that establishing a uniform framework is the only way for CSR to flourish internationally.
Stead and Stead (2013) endorse this stance, claiming that CSR has become a critical problem in society as well as a central concern in the business environment, resulting in a considerable shift in the strategic framework. According to the findings of the 2011 study, firms who completely adopted sustainability as a major strategic component were able to implement effectively useful precautionary tactics in new sustainable and ecologically positioned enterprises on the market. Furthermore, Stead and Stead (2013) observed that enterprises who simply adopted sustainable transformation as a strategic plan were unable to compete in this new market sector.
Corporate Environmental Responsibility (CER)
CSR, as an ecological part of a companys obligation, addresses the environmental effects of its operations, infrastructure, and products by lowering emissions, increasing productivity, and eliminating unsustainable practices that may deprive future generations of natural assets. The internet, the media, and the digital revolution put businesses in the limelight, resulting in regular judgment of enterprises based on how they save the environment. Companies from diverse locations and industries, on the other hand, have progressively benefitted and understood the substantial worth and competitive advantages achieved by conducting environmental efforts.
Environmental protection, clean energy, green innovation, ecologically oriented innovation, and supply-chain management are some of the environmental efforts that have benefited businesses. Reducing the quantity of material and energy consumed helps the environment while also having an impact on the corporations bottom line. KPMG, which has been involved in a variety of environmental activities since 1996, is an example of a distinct sector. As a result, companies are recognizing that CSR has a beneficial influence on their bottom line.
The environmental components of social responsibility, on the other hand, produce the greatest quantifiable data. These CER components assists in the correlation of proactive firms to favorable financial results (Peng et al., 2021). Moreover, CSR encourages product differentiation at both the product and brand levels. Companies use CER principles into product features to show customers that the company cares about environmental and social issues (Peterson et al., 2021). According to Oláh et al. (2018), firms in emerging economies have participated in environmental or social advances, resulting in increased revenue growth and cost savings. These strategies were also demonstrated to have a positive impact on the corporate image of the firms. They have experienced cheaper labor costs because of fewer absenteeism, as well as lower trash disposal costs, and they benefit from the partnership provided by the communities in which the firms operate.
As a result, corporations key contributions to addressing societal environmental challenges include lowering the raw materials and energy utilized in manufacturing, as well as minimizing pollution and waste from operations.
Strategy, Innovation, and Change Relationship
According to the research reviewed above, there is still a lack of strategic thinking in businesses, which leads to poor strategies and, as a result, poor decisions. The dilemma is exacerbated in a world that is getting more competitive, vulnerable to fast change, and with considerably more complex demands that may jeopardize the survival of these businesses. According to Liedkas (2000) principles, the current study supports the premise that strategic planning should follow strategic thinking and the necessity for changes in a corporation. In this case, the top management are crucial in designing and establishing a work culture where all are motivated to develop new concepts and to comply with research and innovation. As such, through strategic changes, a comprehensive measurement of both surrounding environments, with more opportunities for positive performance are vital (Bonn 2001).
Differentiation Utility as a Strategy
Diverse businesses exhibit varying degrees of utility understanding to their corporate situation, and as a result, they respond differently to variations in the inner and outside surroundings. In this regard, not all industries have the same level of knowledge utility exposure; as a result, corporations behave differently from one another. According to Peng et al. (2021), businesses with large and significant environmental consequences, such as mining, are more likely to engage with environmental challenges. The author does, however, mention that excellent practices in social stewardship may be discovered in the IT, culinary, and beauty products businesses utilities.
All industries are growing more vulnerable to environmental challenges, and all sectors will be impacted over time. According to Lorenzo, Rubio and Garcés (2018), a cost and differentiation strategy as a utility is determined by the industrys circumstances. To improve the firms strategic position, the competitive strategy of preference must adapt to the demands of the organization. A differentiation strategy is an appropriate technique in more environmentally sensitive enterprises because it enables a company to explore methods to differentiate itself beyond its prototype or core service, allowing it to charge premium fees. Sustainability concerns among partners, suppliers, employees, and customers give new opportunities for businesses to differentiate themselves. As a result, CER has an impact on organizational strategy by developing strategies to adapt to environmental changes, which affects organizational operations and, in certain circumstances, products and culture; hence, CER is linked to organizational strategy, change, and innovation.
Creation of a Competitive Advantage
Adopting ecologically oriented corporate responsibility allows a firm to distinguish itself by establishing an image (change) of environmentalism, which may have a far-reaching influence (innovation) on a firms operation and advertising elements. Environmental marketing and corporate responsibility, according to Abbas et al. (2019) are becoming issues of concern research because of the findings of various case studies undertaken in recent years. Abbas et al. (2019) performed a research to investigate the impact of CSR and ecological influences and established that CSR offered a positive control on firms sustainable performance. Therefore, CSR emphasizes that building an ecologically friendly image can help a firm rank better on the official list.
As a result, if it is preferred to employees, suppliers and partners may favor it. The image boosts employee engagement and brand loyalty by demonstrating that the company cares about its stakeholders mutual interests. Abbas et al. (2019) discovered that environmental stewardship lowers operating expenses and improves a companys reputation. In this situation, ABCs expenditures should be greatly reduced because of following an environmental conservation plan.
Reputation Strategy
An organizations reputation can help it distinguish its commodities from those of its rivals. According to Nave and Ferreira (2019), its ethics and morals, its goods, history, productivity, human resources, and brand image determine a firms reputation. A corporation that projects a positive image gains a positive reputation. However, in a business, an outward image may not be adequate to get the intended results (Nave and Ferreira, 2019). Nave and Ferreira (2019) contends that in order to increase performance, a companys exterior image must mirror its internal procedures or identity. As a result, Abbas et al. (2019) contends that a reflected image is more likely to produce the intended effects than a rational picture. He believes that the best way to develop a strong reputation and image is for a corporation to become the identity, rather than the other way around.
CER may become an important aspect of an organizations reputation. However, the company must incorporate it into its culture. According to Abbas et al. (2019), when CER is ingrained in an organizations culture, it becomes simpler to express its principles and standards. According to Abbas et al. (2019), CER is context-dependent, and when developing a new brand regarding environmental stewardship, the emerging image must align with the values and needs of stakeholders in a particular location. As a result, building a reflected, positive image may boost a firms reputation, resulting in change and innovation in organizational strategy.
Strategy in Public Sector Manager
ABC Inc. is a public sector entity, hence has public sector managers. In this sector, strategy is primarily concerned with corporate modeling methodologies in single public sector enterprises. Strategy is becoming a wider and more broadly diffused activity in which more managers and companies participate. A better way ahead for public managers is to focus less on strategy concepts and more on achieving the best execution and results. Instead, public managers must commit more time and energy to establishing and enhancing public target markets, as well as collaborating with other stakeholders and engaging citizens. Politicians, stakeholders, and individuals all have a part in attaining the goals of a plan. As a result, seeing oneself as a participant in the creation of public value is a more measured approach for top administrators.
Strengths/ Utilities of Strategic Analysis
According to Bonn (2001), strategic analysis and planning highlight the internal beneficial characteristics of a firm that are within control. Therefore, as per Steptoe-Warren et al. (2011), recognizing these useful properties allows a business to focus on the elements that contribute to positive achievement and reproduce the approach wherever it is relevant. In this case, strategic analyses aids in identifying the strengths of both internal and external assets, resulting in a growing competitive advantage (Steptoe-Warren et al., 2011). Liedtka (2000) posits that strategic analyses provides managers with elements that add value or provide a company with a competitive advantage. Therefore, half of the game plan is evident when one have a fair competitive advantage within a competition. The only thing that needs to be clarified is what are not working well for an organization.
Limitations of Strategic Analyses
Strategic analysis can offer a plethora of concepts but does not assist in determining which ones are the strongest. Eisenhardt and Zbaracki (1992) affirm that a cursory analysis reveals a fields character that reflects a crazy quilt of viewpoints (p. 17). As per Eisenhardt and Zbaracki (19920, a closer look to strategic analyses reveals a discipline founded on mature concepts yet with flawed assumptions. Moreover, often too much time is wasted exploring problem-solving concepts, leaving little or no time for product innovation or service level modifications at the institutional level.
In conclusion, the above literature reviews discloses that it is possible to infer that the proper alignment of these many strategic ideas, with a regard to the evolution of strategic thinking, would result in better judgments. This would increase performance, especially if implemented at all levels of the company, both individually and collectively. This results in integrated plans that enable businesses to handle the demands appropriately, which can only be feasible via the growth of strategic planning in their day-to-day operations. As such, strategy, change and innovation have a unified relationship, with the need for one idea resulting to a necessity for another. In this case, the above-illustrated strategies are important for the continuous innovation and are prerequisite for changes in current competitive marketplace.
Critical Analyses of Strategic Processes
The process begins with assessing the internal and external environments, establishing who they are, and identifying their vision, purpose, goals, and objectives, proceeded by strategy formulation, strategy implementation, execution, and assessment.
Review of Organizational Vision and Mission
ABCs Inc. is a multinational fashion and design firm with over 30 offices in over 30 countries globally. The companys headquarters are in Paris, France, and it employs over 140,000 personnel. Because this city is regarded as one of the worlds smartest, it possesses the resources required for ABCs long-term success. As a result, the company vision and purpose are among the most important parts of the corporate strategy.
In the case of ABC, the firms vision is to create the top quality products on the globe while leaving it better than they found it. This implies that the firm aims to improve the quality of life on the world by producing fashion products that are friendly to the environment. As a result, each of this companys commodities is designed to make consumers lives easier. The last section of the vision statement demonstrates the companys understanding of its corporate environmental responsibilities. This indicates that the corporation is hesitant to indulge in any activity that might harm the environment or contribute to global warming, rendering its sustainable development goals null and invalid.
To accomplish these objectives, this company requires personnel in various departments to devise and execute plans within their respective units. Consequently, individuals employ tactics with which they are already familiar, making the execution process easier. When everyone in the company does their job well, the organization may be anticipated to run smoothly. This organization must first define the framework of its competition in order for the ideas developed to be effective (Mahdi, Nassar and Almsafir, 2019). The company studies the competitive nature of other organizations in order to decide what adjustments it has to adopt in order to defeat these peers in this situation.
ABC requires its staff to discover differentiating ideas in different divisions after assessing how the competitor is gaining a competitive edge. In this situation, the differentiation concepts are centered on what this business can do well than most rivals, which in most situations is research and creation of superior goods with prospective features that the competition has yet to adopt. Furthermore, this firm strives to prove that the techniques adopted are credible and convey a tale of the companys progress into global sustainability through time. Furthermore, in order to comprehend this companys positioning because of its strategic management, the researcher must recognize the multiple business elements that influence ABCs logistics and how these business contexts can be streamlined to enhance the rms global placement on environmental sustainability.
Mechanics/Tools for Strategic Analyses
SWOT Analysis
Strengths. One of the institutions main strengths is that it incorporates product differentiation into its key pillars. This firm has extended its market awareness and domination by developing a variety of goods, including knit wears, coats, sports wears and fashion clothes for television broadcasting personnel. Furthermore, via transformational leadership, this organization has enhanced its staffs skills and capabilities, resulting in higher individual and total productivity.
Weaknesses. This corporation, on the other hand, has a weakness in the nature of an extraordinarily huge personnel database. With over 140,000 staff worldwide, this corporation has a difficult time managing individual employees due to their vast quantity. Moreover, the fact that this corporation has a centralized control structure in which individuals at the top of the organizational chain are required to approve all operations and plans wastes time in decision-making (Öztürk and Yildizba_i, 2020). Furthermore, senior management positions may not comprehend the management demands of some remote nations in some circumstances. This lack of information may limit their capacity to make appropriate judgments for all the firms different stakeholders.
Opportunities. Some of the most promising opportunities for this organization relate around the growing popularity of businesses applying corporate social responsibility. Consumers are no longer only interested in firms that provide high-quality goods. On the contrary, they take into account what these businesses are doing for the ecosystem and the society. In this sense, ABC has a chance to strengthen its worldwide standing by actively participating in more relevant CSR (Magrizos et al., 2021). Furthermore, technological improvements provide a chance for this business to enhance its products and services, boosting their acceptability to prospective customers and, as a result, raising the likelihood of revenue growth.
Threats. The threats to this firm include increased competition and the expensive financial cost of long-term management. To achieve and maintain its position as the finest firm in its field, it must make significant investments in these areas. This implies that the companys operating expenditures are likely to rise in order to acquire the most latest and effective design materials, hire the most talented and qualified workers, and engage in R&D to guarantee that it remains at the forefront of fashion and design. Finally, this means that this firm will be obliged to be remarkable and take risks that other rivals are hesitant or too afraid to take in order to achieve its aims.
PESTLE Analysis
Political Factors. Civil issues, such as political instability in some locations where the corporation does business, also have an impact on this companys strategic management goals. Civil turmoil suggests that a country may renege on preexisting trade treaties between the corporation and the ruling regimes in these territories. As a result, the companys leadership is compelled to navigate turbulent agreements and conversations for improved trade deals, or risk losing all of its properties to the ruling government.
Economic Factors. Economic considerations such as a nations exchange rate volatility may have an impact on this companys merchandise pricing model. In a hyperinflationary environment, the value of a countrys currency plummets, making it difficult for its citizens to purchase ABCs products. Furthermore, economic insecurity may have an impact on the capital value of this corporations interests in these volatile locations, lowering its valuation.
Sociological Factors. Sociological variables such as cultural biases and misconceptions that see certain items and services supplied by this corporation as improper would have an impact on the organizations management in these places. Furthermore, because of its diversity, this organization hires people from a wide range of backgrounds. In certain circumstances, these cultural differences make coexisting difficult. As a result, the organizations manageme
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