REACTION PAPER: CHAPTER 1

With the passage of time, many organizations have emerged having similar product,

catering same group of customers and having the same opportunities. However, despite

having similarities on relevant aspects, these organizations did not perform similarly at all.

Some succeeded and some failed. And it is because of Strategy.

According to Alfred D. Chandler, “Strategy is the determination of the basic long-

term goals and objectives of an enterprise and the adoption of the course of action and the

allocation of resources necessary for carrying out these goals.” James Brain Quinn also

defines strategy as “the pattern of plan that integrates an organization’s major goals, policies,

and action sequences into a cohesive whole.” In simpler terms, Strategy is a planned or

emergent course of action that is expected to contribute to the achievement of organizational

goals. It can also be an idea or a thought that is viewed to be productive to complete a course

of action. Through these definitions, we can say that a strategy is intended for a long-run

plan. However, it does not need to be planned. There are strategies that emerges unexpectedly

as a result of a situation or an incident and is expected to contribute to the achievement of

organizational goals.

In order to achieve the organizational goals, strategies need to be effective, and for the

strategies to be effective, it needs to follow certain criteria. It should be clear, concise,

flexible, coordinated, surprise and secure. There are also different kind of strategies, from

deliberate to most emergent. First is the Planned Strategy where precise intentions are

formulated and articulated by a central leadership and is highly deliberate. Second is

Entrepreneurial Strategy where intentions exist as the personal, unarticulated visions of a

single leader and so are adaptable to new opportunities; it is relatively deliberate but can

emerge too. Third is Ideological Strategy where intentions exist as the collective vision of all
members of the organization and are rather deliberate. Fourth is Umbrella Strategy that is

partly deliberate and partly emergent, or can also be called deliberately emergent since the

leadership purposely allows others the flexibility to maneuver and form patterns within the

boundaries. Fifth is the Process Strategy where the leadership controls the process aspects of

strategy and leaving the actual content of strategy to others, this is also partly deliberate,

partly emergent and deliberately emergent. Sixth is Disconnected Strategy where members

loosely coupled with the rest of the organization produce patterns in the streams of their own

actions in the absence of common intentions of the organization at large, and deliberate for

those who make them. Seventh is Consensus Strategy where various members converge on

patterns that pervade the organization in the absence of common intentions and are rather

emergent in nature. Eighth and last is the Imposed Strategy where the external environment

dictates patterns in actions either through direct imposition or implicitly pre-empting, and are

organizationally emergent, although they may be internalized and made deliberate. With

these different kinds of strategies, is these really necessary for an organization?

It is beyond doubt that every organization necessarily formulate strategies. It is

necessary in view to have rules to guide the search for new opportunities both inside and

outside the firm, to take high quality project decisions, to develop measures to judge an

opportunity, to have an assurance that the firm’s overall resource allocation pattern is

efficient, to have and develop internal ability to anticipate change, to save time, money and

executive talent, to identify, develop and exploit potential opportunities, and to utilize the

delay principle, that is, delay the commitment until an opportunity is on hand. In other words,

these strategies are necessary to keep an organization alive, make it better and achieve its

goals. There are also key areas in developing a strategy in which managers have to consider.

These are (i)The type of goods and/or services that the firm will produce and will sell. (ii)The

mode of producing goods and rendering services. (iii)Who are and will be the firm’s
customers. (iv)The methods of financing the various operations of the firm. (v)The amount of

risk that the firm will take. (vi)Methods of implementing the strategy. Putting these key areas

into consideration in developing a strategy would most likely result into a better output in an

organization.

Now that we already know what is strategy and its implications, we can proceed to

strategic management. Others may confuse management from strategic management.

Accordingly, the nature of strategic management is different from that of management.

Strategic management is concerned with deciding on strategy and planning how that strategy

is to be put into effect. It is a continuous, interactive, cross-functional process aimed at

keeping an organization as a whole appropriately matched to its environment. Just like

everything else, strategic management also passed through different stages in its evolutionary

process and reached their present stage. It goes through four phases over time. The Phase 1 is

Basic Financial Planning where its main concern is simply meeting annual budget

requirement, operational functions like production, marketing, finance, and human resources

and emphasizing on the operational control. Phase 2 is Forecast-based Planning where the

primary concern is mainly on effective plans, environmental scanning, plan for the future and

allocation of resources. Phase 3 is Externally-oriented Planning where notable developments

emerged namely increasing response to markets and competition and complete situational

analysis and assessment of competitive strength. Lastly, Phase 4 is Strategic Management

where the focus shifts over time from meeting the budget to planning for the future, to

thinking abstractly, to working to create desired future. These management process is

definitely long and difficult and thus requires sustained effort and efficient leadership.

Given the circumstances that strategic management is a difficult task, managers argue

why they should engage themselves in such difficulties. However, many believed that

strategic management is highly needed in order to have a much better organization. It is

needed due to change process, to provide guidelines, field of study, better performance,

systematic decisions, communication, and allocation of resources and holistic approach.

There are also several benefits of strategic management that several organizations have been

reaping. Some of those is that it helps an organization to be proactive rather than reactive in

shaping its future, it helps organizations not only to respond to its relevant environment, but

also to initiate and influence its environment and thereby exert control over its destiny, and it

also gives a degree of formality and discipline to the management of business. Along with the

benefits are the challenges of strategic management. The first challenge is Technological

advancement and innovations that led to the obsolescence of the existing technologies that

creates a challenge for firms using obsolete technologies. Next is the Product/Service

innovation and Development that leads to further competition and creates new challenges for

strategic management. Next is the Global Issues that leads business activities to cross national

boundaries more intensely and frequently that increases operations of multinational and

transnational corporations in the country. Next is the Quality Issues that changed the concept

of post-production quality control into Total Quality Management and further changed to

feed forward and zero-defect of the product. Next is the Economic Boom that provides the

opportunities for the increase in demand as well as business operations and Economic

Recession that creates threat in general. Lastly are the Social Issues that would definitely

affect the organization one way or another.

As a conclusion, no matter how long and hard the process of having and developing a

strategy and engaging into strategic management, it is advisable for an organization to do

such in order to obtain and achieve internal ability. And is definitely essential due to change

and for better performance.