he Practice and Theory of Strategy Development Processes In Your Chosen Organisation Essay Sample

This sub-task of the essay will turn to how scheme development procedures and deductions for the “learning organisation” construct in relation to scheme development are applied in China-based Haier Group ( HG ) ( See the background information on HG in Appendix A ) . Strategy development processes reflect the ways in which scheme is either officially and consciously developed or emerges as portion of a form of critical determinations over clip ( University of Southern Queensland 2009 ) . This undertaking looks at strategic be aftering which encapsulates the scheme development processes ( Lynch 2003 ) . In add-on. strategic planning can besides be viewed as an organizational acquisition procedure ( Lynch 2003 ) .

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Intended scheme is an look of coveted strategic way intentionally planned by directors ( Johnson. Scholes & A ; Whittington 2008. p. 565 ) . Strategic planning is formally/intentionally developed in HG by first transporting out an SWOT analysis. SWOT is an acronym for the internal resource strengths and failings of an administration and the external chances and menaces to the administration ( Stapleton & A ; Thomas 1998. p. 332 ) . A SWOT analysis summarises the cardinal issues from the concern environment and the strategic capableness of an administration that are most likely to impact on scheme development ( Johnson. Scholes & A ; Whittington 2008. p. 148 ) . Although this theoretical account is used. but HG starts strategic planning by first scanning its internal environment to place internal resource strengths and failings by analyzing factors such as top direction. finance. R & A ; D. buying. fabrication and accounting. This is because HG direction believes that internal strengths are the key to guarantee long-run success.

Harmonizing to the normative strategic procedure theoretical account that include the four wide countries set out by Lynch ( 2003. p. 53 ) . HG’s manner is consistent with the resource-based theories ( See Figure 1 ) which focus on the internal facets of the organisation as the get downing point of scheme development and emphasizes on the strengths of the organisation because they are cardinal to any long-run success. Hamel & A ; Prahalad ( 1998 ) argued that resources were far more of import in presenting competitory advantage. proposing that the traditional competitory scheme theoretical account devised by Porter ( 1985 ) with the focal point on the product-market placement underestimates the importance of capableness edifice in the scheme development procedure.

However. troubles related with resource-based position can originate from the ceaseless capacity to absorb more information. cognition. capablenesss and other resources. but the window of chance may shut before cognition and capablenesss are built up. and hence there is a demand to equilibrate the conflicting demands of geographic expedition for more cognition and capablenesss and the development of bing cognition and capablenesss ( Penrose 1995 ) . Another possible job is that its fans stress excessively much on internal acquisition issues. and hence neglect altering client demands externally ( Levinthal & A ; March 1993 ) .

Figure 1- The normative strategic procedure

Due to the jobs of merely concentrating on resource-based position. following internal environment scanning. HG normally scans the external environment. excessively. External environment scanning in HG focal points on external micro-environment of the full industry ( i. e. providers. selling mediators. clients. rivals and populaces ) and external macro-environment ( i. e. demographic. economic. natural. technological. political and cultural factors ) ( Porter. 1985 ) . This means although HG emphasizes chiefly on the importance of internal resource strengths as the footing of developing scheme. external environment is besides examined in order to vie against rivals more efficaciously by placing chances and menaces.

But it can non be said that HG’s manner is utilizing profit-maximization/competition-based theories because external environment is still non the first focal point ( Lynch 2003 ) . The internal facets of the administration are the first focal point in HG. Or it can be said that HG’s manner is based on the games-based theories since both analysis of resources and analysis of the external environment are considered as the get downing point of scheme development ( See Figure 1 ) .

After finishing the SWOT analysis by scanning internal and external environment. top direction of HG so develops strategic issues and future challenges. During this phase. HG besides verifies and develops their strategic vision and mission statement and aims. This is consistent with the 2nd measure of the perspective strategic procedure ( See Figure 1 ) . Mission defines what concern the company is in. and vision defines what the company wants to be ; both of them are of import because they provide the foundation for scheme development ( Allison & A ; Kaye. 2005 ) .

Based on the above attempts made by the top direction of HG. the scheme development undertaking is so transferred to each divisional section which is required to fix a “Strategic plan” in alliance with the organisational-level ends. This is particularly true in merchandise divisions ( e. g. icebox division. air conditioner division ) that need to foster scan the external environment of the section. Divisional director is responsible for the divisional strategic program after the strategic development preparation provided by the central offices. Here. divisions besides need to develop strategic options and urge the best scheme based on their ain state of affairss. Strategic picks development is of import as it looks at an organisation’s hereafter and the manner in which it needs to react to the many force per unit areas and influences ( Johnson. Scholes & A ; Whittington 2008 ) .

But division’s recommendation may vie for corporate resources ( Schermerhorn. Hunt & A ; Osborn 2003 ) . To get the better of this job. the divisional strategic programs are double-checked by top direction and integrated into the organization-level strategic program ( if the divisional program is suited ; otherwise. the division has to revise it based on the suggestion of the top direction ) which can so be accessed through HG’s Intranet by all the employees. Intranet ( information systems ) is important as it enable HG forces to break transport out their strategic functions twenty-four hours in and twenty-four hours out ( Thompson. Strickland & A ; Gamble 2005 ) .

The strategic program developed by HG besides involves one-year public presentation marks and public presentation assessment method. Performance is reviewed hebdomadal and monthly by top direction and divisional direction to look into whether or non divisional public presentation is on the right path ( See the full procedure in Figure 2 ) . However. repairing a job may necessitate a big figure of resources. and therefore if wrongly judged. may do great loss to the oranisation’s stockholders.

Figure 2- Procedure of public presentation proctor and control in HG

( Beginning: Adapted from HG 2009 )

The existent procedure of strategizing was boundlessly more complex than was assumed in the normative procedure ( the intended scheme development procedure ) and that the procedure is one of experimentation to happen the most productive path forward ( USQ 2009 ) . Emergent scheme comes about through more mundane modus operandis. activities and procedures in organisations that. on the face of it. may non be straight to make with development of scheme but however can play an of import role-“a realized form non expressly intended” ( Mintzberg 1994 ) ( See Figure 3 ) . HG direction besides encourages divisions and even employees to develop emergent scheme based on the organisational-level ends.

HG employees are normally larning through the company’s Intranet and lend advanced thoughts to develop emergent scheme related to their divisions but such thoughts are eventually double-checked and judged by the divisional director and top direction. This is innovation and knowledge-based harmonizing to the emergent scheme procedure set out by Lynch ( 2003. p. 60 ) ( See Figure 4 ) . And in this procedure. HG’s Intranet plays an of import portion. Whilst the emergent schemes have been deemed to be significantly more effectual in covering with complex and progressively disruptive concern environments. a figure of concerns ( see Table 1 ) have retarded their complete acceptance. peculiarly by larger administrations such as HG ( Lynch 2003 ) .

Figure 3-Strategy development paths

( Beginning: Johnson. Scholes & A ; Whittington 2008 )

Figure 4- The emergent scheme procedure

Table 1- Concerns about the emergent strategic procedure

Emergent scheme implies that an organisation is larning what works in pattern ( Mintzberg 1994 ) . Stacey ( 1993 ) besides pointed out that strategic direction was a really reactive procedure. and that administrations are larning entities and their acquisition rhythms are really antiphonal to the actions taken by rivals and other stakeholders who influence their ain strategic picks. Hence the strategic planning procedure is really much a acquisition procedure ( Starkey. Tempest & A ; McKinlay. 2004 ) . Harmonizing to Huber ( 1991 ) . organisational acquisition can be defined as the procedure of cognition acquisition. information distribution and reading. and organisational keeping in response to altering fortunes.

A learning organisation deliberately builds constructions and schemes to advance and maximise organisational acquisition ( Huber 1991 ) . In HG. cognition and information are obtained by scanning external environment ( e. g. rivals. providers. clients. etc ) during the scheme development procedure as mentioned above. Information is so distributed and interpreted to divisions and employees through HG’s Intranet. In add-on. HG encourages divisions and employees to larn through the Intranet to advance and maximise organisational acquisition. Organizational larning based on IT webs ( e. g. HG’s Intranet ) can be really effectual as they connect related organizational units and helps rapidly turn up desired information ( Schermerhorn. Hunt & A ; Osborn 2003. p. 254 ) .

To sum up. the scheme development procedures should look at both formal planning procedure and emergent scheme procedure. Formal planning is of import to make accomplished scheme. but it is normally unrelised or merely partly due to grounds such as environment alterations after the program. Hence emergent scheme procedure becomes of significance to get by with the complex existent universe. Organizational acquisition is important for the scheme development as the strategic planning procedure is really much a learning procedure.


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Founded in 1984. Hair Group ( HG ) is chiefly a China-based manufacturer of family contraptions. including iceboxs. air conditioners and rinsing machines. Its central offices are located in Qingdao. Shandong. China. ( Haier. 2010 ) As of 2008. the company is the 4th largest family contraptions maker worldwide with entire gross revenues of $ 17. 8 billion in 2008. up 20. 6 % compared with the figure of 2007 ( Xinhua News 2009 ) .


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