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MGT302 Strategic Management

Published : 08-Sep,2021  |  Views : 10


  • Current standard linear approach, shortcomings etc different approaches to Strategic Management through following:

stakeholder approach

dynamic capabilities

sustainable approach

  • Viability of each approach,
  • Suggested benefits
  • Implementation issues
  • Limitations


Strategy management is about the application and planning of various instruments to attain the main aim of the company.  Strategic management allows a company to formulate long-term plans so that the company can achieve competitive advantage of other countries.  The top leaders of the company mainly take the decisions.  The leaders take the decision according to the   availability of the resources.  The linear strategy mainly puts emphasis on planning based on proper method and consecutive order.  In linear strategy application,   the top managers of the company change their products according to the needs of the market.

 The managers also change their strategies and decisions according to the needs of the environment.  This type of strategic approach has mainly two motives.  The first one is the profit and the second one is the productivity.   There are certain limitations of the linear structure of the management. The managers and the leaders take all the decisions from recruiting employees for the company, deciding the remuneration of the employees and others.   Then in this type of approach, company does not have any specific ways of planning because it is always changes with the external surrounding.  Moreover, it does not give any power to the employees for executing any decisions.   Another limitation is that if the   manager is absent then  all the company cannot take any decisions of its own.

Different Approaches of Strategic Management

Stakeholder Approach of Strategic management

        The stakeholder approach   mainly came into the field of strategic management in the 1980s.   The main reason for which the stakeholder management came into process was  due to the problems faced by the manager  when there is  changes in the  business market especially in the field of  stock market.  The traditional management was not helping the managers of the company to formulate new strategies and it was not helping the managers to overcome the situation (Tantalo  and Priem 2016) .A stakeholder approach was an instrument at that to challenge the traditional strategies which is mainly depended on economic factors ( Bridoux and Stoelhorst 2014).  This approach suggests the managers to understand the problems and the thoughts of the shareholders, employees and customers.

 From that period to present time, the managers of the organizations try to adapt this strategy otherwise, there would be a serious blow to the company if any external or internal factor affects the company in a negative way. It can be said that from the stakeholder approach there emerged different kind of theories such as organizational theory and corporate social responsibility (Costa and Menichini 2013). Corporate Social Responsibility has now become one of the important attributes of the company because  it includes the business ethics and code of conduct and norms of the company which is very necessary  to  continue the reputation  and financial stability of  the company (Harrison and Wicks 2013). It can be considered that the stakeholder approach is based on the resource and market related to a particular company.  Another important thing is that the stakeholder approach denotes to research about the stakeholder company associated with the main company. The Australia mining industry has got its reputation by applying the stakeholder approach. It can be said that the good corporate management is one of the key factor for the proper functioning and profit generation purpose of the company (Carroll and Buchholtz 2014). The company has improved its corporate relationship with the other stakeholders of the company so that it gets help from the stakeholders in case of emergency.

The Australian mining industry has responded to the changing social environment by following different methods.  In order to build reputation the Australia mining industry and its associated company have used the strategies of being socially responsible which is one of the feature of the stakeholder approach.  The positive reputation of the company is not followed by the analysis and the actions of the mining company but   the company has respected the decisions of the manager and employees of the stakeholder company (Kramar 2014).   Another important thing done by the mining company is that they have also followed the  concept of en not possible to  maintain the  decorum of the company  and consequently build reputation with corporate social responsibility  in the  company itself otherwise  it would  have be the  stakeholder company and other companies and more specifically the  client of the company.

Dynamic Capabilities

Dynamic capability is another feature of strategic management.  The Dynamic capability  strategy  was established by David Teece, Gary Pisano and Amy Shuen, in their 1997 paper ‘Dynamic Capabilities and Strategic Management’.  Dynamic capabilities are the potential to integrate, construct and adapt external and internal   skills so that the company can go at par with the changing circumstances of the market.  Dynamic ability is to constantly modify, expand and develop new resources according to the demands of the business market (Booth 2015).   There are primarily three types of dynamic capabilities,  the first is the potential of the companies to learn about new matters and construct new strategic assets, then the amalgamation of the new strategies  which  contains technology, customer  feedback  and finally  modifying and applying the strategies  which have  been  not appreciated earlier (Helfat and Martin 2015).  

The first stage includes the learning stage in which the employees and leaders of a company need to  change their  working strategy and routines so that  they can  resolve the  problem of the company. It also enables to understand the threats of the company and deal with the strategic blind spots of the company, which denotes the incomplete or unsuccessful decisions taken by the   managers of the company.   The second stage involves in building new strategy for the company.  It can be said that the quality performance of a company   is mainly based on organizational routines  for  collecting and processing information which is connected to customer experiences, technical  framework, and supervising the factories and  the resources needed for  processing the  work in the  factory (Vogel  and Güttel 2013) .

This strategy also tells about to enhance the increasing competitive advantage by collaborations and acquisitions.  Third, one is changing the existing assets to new one by following reconfiguration and changing the company attitude.  The managers and leaders of the company have to decentralize by allocating powers to decide and create new approaches applicable for the company.  Another important thing is that the human resource and other materialistic resources of the company must be integrated together in order to achieve consistency and reputation of the company ( Rothaermel 2015) .

It can be said that Apple and IBM companies have always changed themselves with the changing situation.  As the world is changing fast, it is very important for the managers of the organization to transform and reinvent strategies according to the needs of the company.  However, Apple is not specialized as technological leader but it has always tried to develop new features to meet the needs of the customer.  The main positive aspect of Apple that is based on dynamic capabilities which has helped the company to grasp new markets and also to structure the markets accordingly (Wolf 2014). It has used the innovation strategy for creating exclusive products like iPad for the customers (Iannuzzi and Valentino 2014). 

This has enabled them to dominate the market of both portable digital music and music player industry. They have totally depended on consumer electronics, which is not limited to computers only.  IBM, meanwhile, is a true technological innovator both internally and in the market. IBM successfully transformed electromechanical tabulating machines to mainframe computers, and thus it has able to make them stand as a reputed IT-based company among the multinational companies.  On the contrary, one can see that Kodak, Polaroid and Digital Equipment   excelled in technological field at one point of time, but later they cannot compete in the competitive market whereas Apple and IBM both are still on the top positions in the business mark (Mahoney  and Qian  2013).

Sustainable Approach

 The sustainable approach is very new in the management field, which challenges the traditional strategies implemented in the company. The concept of the sustainable strategy management is about the holistic management related to organization behavior and goals of the company (Beske,  Landand Seuring, 2014).  There are various elements incorporated into the sustainability strategic management.  The first important feature is the corporate values.  This means that the corporate company or organization must have some particular values and ethics, which helps a company to maintain a discipline in the organization and enables to reach the goals of the company.  Thus, for this reason now a day much emphasis is given on corporate values. The second element is connected with the employees of the organization and the company. The experts in this field have suggested that apart from focusing on the profit of the company, the leaders and managers must also concentrate on the decisions of the employees.  This is because employees are a major part of fulfilling the long-term target of the company.

 It must be observed in different companies where the employees are not considered an important part in the organization that company does not progress well in the end.  Therefore, it is very important to consider the decisions and strategies of the employees and execute in the plans and policies of the company (Stockenstrand and Ander  2014)  The third important factor is the leadership quality of the managers in the organization. This is because it is due to the motivation and proper decisions taken by the leaders a company flourishes or wither away.  A leader must motivate and inspire the employees and the team members to execute their own ideas while doing work.  The leader must focus on the development and empowerment of the employees. They must also work collectively along with the employees to encourage them. The attitude of the leader must not be like power wielders.  There should also be a committee, which will supervise the activities of the leaders

.  These are the significant features of the sustainable strategic management. The fourth element deals about the basic attributes of the strategies.  The planning of the strategies of the company must be based on researching the external and internal factors of a particular company.  The strategy must be formulated after proper surveying the threats and scopes of the company. Sometimes faults lies with clarity of the strategies rather than the implication of the strategies.  Another important thing is the using of certain instruments such as balanced scorecard, strategy maps, strategy executing programmes and finally budgeting and task scheduling facilitates the sustainable approach of the company  (Pepper  et al.,2014).

  The BRE group service in United Kingdom adapts the strategy of the sustainable approach.  The BRE Group has existed for 90 years by developing the skills of research and innovation and has able to build an environment and worldwide recognition .It is a consultancy, which encourages their clients to do work, based on sustainable approach (Chang  2016).  NCC is one of the renowned construction and property Development Company in Northern Europe.   The home market is at Nordic region.  It constructs and builds residential and commercial complexes. It also creates industrial and public buildings and roads and other various types of infrastructures.   The company follows sustainable approach not in terms for only benefit of the company and its employees. However, it also follows environment sustainability  (Bharadwaj et al., 2013). The company focuses on the safety and security of the workplace for the employees.  It also looks after the health of all the stakeholders in the value chain.  The manager also concentrates on the improved quality of life for the employees, the customers and the people of the society.   The company tries to sustain a proper decorum, ethical values and unity among the employees of the organization.  The company does not encourage corruption and always conduct fair business.  The managing committee puts emphasis on the less emissions of green house gases.


Finally, it can be said that three approaches of the strategic management are some way or other linked to each other.   Presently, the strategies of the business management have changed largely.  Previously the strategy of the business management is only restricted to the profit making attributes of the company.  Nevertheless, presently, the focus has shifted from profit making strategy to the factors, which leads to the recognition and revenue generation of the company.  Present days the viewpoints of the world have transformed, every person may be employees or manager is specific about his or her respect and dignity (Grant 2016) .  The previous notion that the decisions of the employees and the stakeholder are not paid any attention.  

 The stakeholder approach and the sustainable approach both deals with the good reputation of the company with the stakeholders and the employees of the organization.  Stakeholder approach has important features of Corporate Social Responsibility, which includes business ethics. The sustainable business approach also signifies about corporate norms but   specifies the necessity of a good leader in a company and also gives stress on the plans and policies related to strategies.  Dynamic capability is very much essential in modern times because not only a company or organization every person has to be persistent with the changing pace of the society.  So, in case of organizations also the company has to keep changing its plans and policies according to the consumer needs.  Otherwise, it will not able to retain itself as a reputed company in the long time.  The example of the company Apple is given where the company has retain its exclusiveness by manufacturing electronic system related to music system.  Dynamic capability also suggests the company to survey and research about the competitors of the company. The reason behind this it helps the company to be aware of its own position and act accordingly.  

One of the common factors of all the three strategies is the essence of the leader and management committee of the company.  This is because whatever may be all the strategies may be it is related to marketing and human resource management or the advertising part more or less everything is based on the ideas, decisions taken by the managers or leaders of a company. The employees are also important part of the organization and the improvement of the work of the employees of the organization depends on the attitude of the leaders.  Thus, the leaders mind set and attitude has to be liberal otherwise the whole company will face the negative consequences. Another important aspect is all the three strategies are  some way or other overlapped with each other with some  specialized  feature.

One of the limitation of the company the three strategies are none of  the strategy speaks about the legal authority of the employees.  None of the strategy is concerned with the legal and humanitarian rights of the employees apart from its impact on the decision making process. There should be focus on the legal authority of the employees because sometimes the employees are  exploited  and harassed  without no reason.  Another significant thing is every company  must have  a cell which will look after any harassment related problems.


Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature. International Journal of Production Economics, 152, pp.131-143.

Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. and Venkatraman, N.V., 2013. Digital business strategy: toward a next generation of insights.

Booth, S.A., 2015. Crisis management strategy: Competition and change in modern enterprises. Routledge.

Bridoux, F. and Stoelhorst, J.W., 2014. Microfoundations for stakeholder theory: Managing stakeholders with heterogeneous motives. Strategic Management Journal, 35(1), pp.107-125.

Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.

Chang, J.F., 2016. Business process management systems: strategy and implementation. CRC Press.

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Harrison, J.S. and Wicks, A.C., 2013. Stakeholder theory, value, and firm performance. Business ethics quarterly, 23(01), pp.97-124.

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Iannuzzi, S.E. and Valentino, G., 2014. Comparative behavior of gasoline–diesel/butanol–diesel blends and injection strategy management on performance and emissions of a light duty diesel engine. Energy, 71, pp.321-331.

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Mahoney, J.T. and Qian, L., 2013. Market frictions as building blocks of an organizational economics approach to strategic management. Strategic Management Journal, 34(9), pp.1019-1041.

Pepper, C., Pai, I., Hay, A., Deery, A., Wilson, P., Williamson, P. and Pitkin, L., 2014. Investigation strategy in the management of metastatic adenocarcinoma of unknown primary presenting as cervical lymphadenopathy. Acta oto-laryngologica, 134(8), pp.838-842.

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Stockenstrand, A.K. and Ander, O., 2014. Arts funding and its effects on strategy, management and learning. International Journal of Arts Management, 17(1), p.43.

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