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GMGA 3073 Strategic Public Management

1.0 INTRODUCTION

Strategy is the means that individual or organizations achieve their objectives. The

strategy also defined a method or creating a new strategy plan to bring about a desired future

such as achievement of goal or solution to a problem. However, Henry Mintzberg described

strategy as a pattern in a stream of decision. He view that strategy has at least two

implications. Firstly, strategy is not one decision but must be viewed in the context of a number

of decision and the consistency among them. Secondly, the concept means that the organization

must constantly aware of decision alternatives (Stahl & Grigsby, 1992).

Then, the term of strategic management is used to refer the entire scope of strategic

decision making activity in an organization. It can be seen as management decisions relating to

the organization to its environment, internal activity guide and determine the long-term

performance of the organization. Next, strategic management is the process by which a firm

managers for developing of the implementation and formulation a strategy. They must be a

proactive, anticipate change, continually refine and make dramatic change to their strategies

(Dess, McNamara, & Eisner, 2013).

In addition, the strategic management of an organization involving to three continuous

processes namely analysis, decision and action. In analysis, strategic management refers to the

analysis of strategic goals such as vision, mission and strategic objectives, including the analysis

of internal and external environment of the organization. In decision, leader must make a good

decision while the lastly is the action must be taken. Every organization must take the action

because it is necessary to implement the strategies (Dess, McNamara, & Eisner, 2013).
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GMGA 3073 Strategic Public Management

The development of strategic management is described from an evolutionary perspective

based on the cycles of change, selection and retention. The evolution of strategic management

means defining as a process of changing environmental an organization. According to Grant and

Jordan, the evolution of strategy has been driven more by the practical needs to business than by

the development of theory (Grant & Jordan, 2012, p. 13). In addition, the evolution is a change in

strategy that result in transformation. However, it been in stages. This is the most of challenging

type of strategic change because it involves on existing strategies and exploiting capabilities

while also developing a new strategic capabilities (Diwan, 1999).

In brief, the evolution of strategic management involves a fundamental approach to

widespread. The initial stage of strategic management is more focused on the planning process

financial. However, the ratings are evolved to process planning, execution and control.

2.0 DEFINITION

American business historian Alfred D. Chandler (1962) argues that the strategy is the

determination of the basic long-term goals and objectives of the company and the use of courses

of action and allocation of resources necessary to carry out those goals (Cole, 1997).

The definition of strategic management has variety. The diversity of these definitions are

based on the context of the researchers. For example, Pearce and Robinson (2000) stated

management refers to a set of strategic decisions and actions resulting from the implementation

of planned to achieve the organization's goals. In addition, the planned implementation involves

activities began with the establishment of the organization's vision to evaluating the success of

strategic process as input for decision-making in the future.

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GMGA 3073 Strategic Public Management

Next, Bryson (1995) defined the strategic management is a disciplined effort to produce

decisions or certain actions to establish a direction for an organization. He also stated that to

achieve the goal of strategic management requires a data and information, focused planning and

taking into account the implications of the future consequences of current actions. Fidler and

Rogerson (1996) argue that strategic management is a process of formation and implementation

of the strategy as a result of the initial reactions which is known as planning for future events

with regard to the organizational environment.

In summary, the strategic management is a process that involves the planned

implementation of the decisions that have been decided by the process of identifying an

organizational environment.

3.0 THE EVOLUTION OF STRATEGIC MANAGEMENT

FINANCIAL CORPORAT STRATEGY AS QUEST FOR STRATEGY STRATEGY IN STRATEGY IN

BUDGETING E PLANNING POSITIONING COMPETITIVE FOR THE THE NEW TURBULENT
NEW MILLENNIUM TIMES
Medium-term Industry analysis Analysis of ECONOMY
economic resources and CSR and business Corporate
DCF- based
forecasting Market capabilities ethics governance and
capital
budgeting segmentation social
Formal corporate Shareholder value Strategic Competing for responsibility
planning The experience maximization innovation standards
curve Organizational
Diversification
Financial Restructuring and New business Winner-take-all ambidexterity
and quest for
control through PIMS analysis re-engineering models markets
synergy
operating Managing risk
budgets Planning business Alliances Disruptive Global strategies and uncertainty
portfolios technologies

1950 1960 1970 1980 1990 2000 2009 2011

Figure 1: Evolution of strategic management: dominant themes

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3.1 Financial budgeting

In between 1950s and 1960s, the senior executives have experienced increasing difficulty in

coordinating the decisions and maintain control in the companies that are growing in size and

complexity. Financial budget in the form of annual financial planning and investment valuation,

provided in short-term control and selection of projects, but not much to guide the company's

long-term the development (Grant & Jordan, 2012).

Next in the 1950s, it was known as the embryonic stage, it is ranked as the focus of the

top management team. It is about the budget planning and control. In addition, it is also about the

main concepts about financial controls. In order to achieve control over the budget, management

made use accounting tools such as the capital budget and financial planning. Currently

companies achieve competitive advantage through the coordination and control of the budget

system (Academic Library, 2014).

3.2 Corporate planning

The corporate planning known as the long-term was developed in 1950 to serve this purpose.

The macroeconomic forecasts provide the basis for a new corporate design. The common format

is a five-year corporate planning document setting goals and objectives. The forecast of

economic trends are included in market demand, market share, revenue, costs and margins.

Highest priority are set for the product and region in firms of different businesses and the capital

expenditure allocated (Grant & Jordan, 2012).

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GMGA 3073 Strategic Public Management

In the 1960s to 1970s, the management team began to focus on the direction of corporate

planning. Most of the company's corporate planning department initiated plans for growth and

the forecast used as the main tool to describe growth. The company commenced its growth try to

find opportunities for diversification. By the 1970s, the strategic management began to develop a

more serious beyond budget planning and control, and corporate planning in order to enter the

company put in relation to competitors. Moreover, companies are trying to focus on specific

market segments and selecting leadership position. During this period, companies were analyzed

to determine the attractiveness of the industry in terms of barriers to entry existing suppliers and

potential buyers. Therefore, companies are trying to diversify and grow through entry into the

global arena in this period (Academic Library, 2014).

3.3 Strategy as positioning

The strategic position is a position in an organization in the future, while appreciating differences

of the changing environment, plus the systematic realization that position. The strategic position

of the organization are included the desired future state of the organization based on the present

and future development, and create a plan to realize the position. The strategic positioning is a

method that comes from the world business. This method aims to ensure the continuity of the

organization.

The strategic position forms an integral part of the strategic management. According to

Johnson and Scholes (2005), the strategic position with regard to the impact on the external

environment strategy, internal resources, competencies, expectations and influence of

stakeholders. A consideration of the environment, strategic capability, the expectations and the
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purposes within the cultural and political framework of the organization provides a basis for

understanding the strategic position of an organization (Lees, 2008).

The strategy management is the emphasis and directed attention to the performance of the

business. In the 1970s to 1980s, the attention and emphasis focused on the source of profits in

industrial environments. The industrial economic organization pioneered by Michael Porter from

Harvard Business School to analyzing the profitability of the industry. However, other studies

also focused on profitability between different companies in the industry, especially in terms of

the market and experience regarding the costs and benefits (Grant & Jordan, 2012).

3.4 Quest for Competitive Advantage

During 1990s, strategic management shift to figure out how the others companies can

outperform. The main issue changed to reinforce competitive advantage. Market-based analysis

and resources-based analysis monopolize in this stage. Some of the company focus on corporate

restructuring, reengineering, and outsourcing. Growing to attractive industry were the main

strategies of those companies were engaged. They will more emphasize to resource acquisition

and capability building (Academic Library, 2014). Being asked on how to outperform their

competitors many business practitioners, particularly in functional areas, will refer to improving

efficiency in their operational activities. They continually optimize processes to reduce failure

rates and customer complaints, increase productivity and cut down non-value add activities,

reduce lead times, and working capital, eliminate waste, etc. (Thomas, 2016).

In business, strategy helps a company to establish some sort of advantage relative to its

competitors that is crucial for outperforming them. Strategy is about gaining, sustaining and
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renewing competitive advantage as a base for superior performance. Firms that are capable of

providing their customers goods and services that are better, cheaper or delivered faster than

those of their competitors are generally more likely to outperform their rivals and win in the

market. Companies take strategies to achieve such a competitive advantage, and thus, ultimately

superior performance compared to their competitors in the same industry or to the industry

average (Thomas, 2016).

There are two key options for clarifying on strategies in the quest for competitive

advantage for a company. First, it can attempt to identify sources and take an outside-in

perspective for competitive advantage in the market or industry. Next, the company can progress

strategies and concentrate on its resources by following an inside-out perspective. These two

perspectives are indicated in the market-based view of strategy and the resource-based view of

strategy. They are conventionally used for justifying the differences in competitive advantage

and performance of companies (Thomas, 2016).

Based on the market-based view of strategy, main factor for accomplishing competitive

advantage and ultimate performance is the firms external. Subsequently, the company is well

guided to classify and concentrate its business activities on the industries and markets. Moreover,

a strong position is needed in those industries to accomplish above usual revenues. Based on the

resource-based view of strategy, a company can anticipate to own a sustainable competitive

advantage when it has specific resources and capabilities that are valuable, cannot substitute and

cannot imitate. Besides that, a company is planned in a way to utilize these resources (Thomas,

2016).
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GMGA 3073 Strategic Public Management

3.5 Strategy for The New Economy

During 2000s was an inconsistent business environment due to economic downturn and

occasional crisis in financial sector around the world. Emerging Third World economies

developed new strategies for the companies during that moments. Looking for unexplored

worldwide markets and externalization to reduce expanding consumptions will be one of the

strategies (Academic Library, 2014).

The growth of the Internet has caused the distinct changes in the strategic management

process. The Internet has delivered a new channel of distribution, a more efficient way of

assembly and spread strategic information, and a new medium of stay connected with customers.

The primary change is the spectacular shifts in organizational structure and their effects on

strong business models (Appa & Parvathiswara, 2008).

Markides referred to strategic innovation as the strategy of breaking rules, indicating

that strategic innovation is an intense on sustaining in an unsteady market (Markides, 1997).

Strategic innovation is about beginning of new markets and bounds in customer value and

remodelling the current markets to attain value enhancements for customers (Schlegelmilch,

Diamantapoulos, & Kreuz, 2003). Strategic innovation has a distinct goal of attaining

competitive advantage by generating customer value and new markets.

Technologies have the most latent to greatly change the current status. They change how

businesses generate profits and how we live and work, sometimes with fabulous speed. They can

change how people live and work, create new opportunities for businesses, and lead growth or

change relative advantage for companies. Energy storage technology could transform how,

where, and when we use energy. Advanced oil and gas exploration and recovery could fuel
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GMGA 3073 Strategic Public Management

economic growth and shift value across energy markets and regions (McKinsey & Company,

2013).

The business model concept has also been forward in the field of innovation and

technology management. Companies commercialize innovative ideas and technologies through

their business models are the primary of business model. Next, a new dimension of innovation,

which extends the traditional modes of process and organizational innovation. One significant

role of the business model could include seizing value from early stage technology by revealing

the value potential established in technologies and transforming it into market outcomes (Zott,

Amit, & Massa, 2010).

3.6 Strategy in The New Millennium

Start from 2009, the models of organization transform to focus on Corporate Social

Responsibility (CSR) and business ethics. Business ethics is the principles and standards that

specify good conduct in business organizations. The reliability of behaviour in business is

determined by customers, competitors, government regulators, public, and everyones personal

moral principles and values. Moreover, businesses should not only make a profit but also

consider the social implications of their activities judged by many consumers and social

advocates. They define social responsibility as a business responsibility to increase its positive

influences and decrease its negative influences on society (Ferrell, Thorne, & Linda, 2015).

There are four dimensions of social responsibility: economic, legal, ethical, and

voluntary. Gaining revenues is the economic foundation of the pyramid and obeying with the

regulations is the next step. A business whose only purpose is to maximize profits is not likely to
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GMGA 3073 Strategic Public Management

consider as social responsibility, although its operations will probably be lawful. Next, voluntary

responsibilities are extra activities that may not be necessary but which support human well-

being or goodwill. Legal and economic concerns have been recognized in business, but voluntary

and ethical issues are more recent concerns (Ferrell, Thorne, & Linda, 2015).

Global strategy drives to a spacious type of business strategies, and a high level of

variation to the local business environment. The challenge here is to create a single strategy that

can be practiced around the world while at the same time sustaining the adaptability to adjust that

strategy to the local business environment when required (Yip, 2002). A global strategy includes

a precisely designed single strategy for the whole network of subsidiaries and partners, enclosing

many countries simultaneously and leveraging synergies across many countries (Twarowska &

Kkol, 2013).

A market in which the best marketers are able to seizure a very large share of the market

and rewards, while the remaining competitors are left with very little share is the winner-take-all

market (Lee, 2016). The economic influence touched by local businesses when a large firm such

as Wal-Mart opens a location in the area. The Wal-Mart consequence usually establishes itself by

forcing smaller retail firms out of business and reducing wages for competitors' employees.

Many local businesses compete against the introduction of Wal-Marts into their regions for this

reason. The Wal-Mart consequence is not all bad whereas it can also control inflation and help to

retain employees productivity at an optimum level. The chain of stores can save consumers

billions of dollars, but may also reduce wages and competition in an area (Fishman, 2007).
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GMGA 3073 Strategic Public Management

3.7 Strategy in Turbulent Times

Governance at the first look refers to the authority and control that are practiced

governing and flowing any organization within a framework of regulations, roles, duties,

systems, processes and relationships. Thus, executives and boards of directors in any

organization are assumed to be kept liable for their judgements with great perceptions in respects

to social responsibility (Alan, 2014). Thus, the board is anticipated to govern corporate strategies

and culture over modelling and explaining its vision, core beliefs and values. The board is

anticipated to look at management policies and individuals roles apart from their own

responsibility according to the regulatory frameworks and conventions. Besides, the board is also

anticipated to be liable for all way of governance, including: decision making, organizational

structure through specifying operational and control processes (Baret, Sandford, Hida, Vazirani,

& Hatfield, 2013).

Ambidextrous organizations are complex administrative forms composed of multiple

internally incompatible framework that are collectively capable of performing together for short-

term efficiency as well as long-term innovation (Bradach, 1997). Like a juggler who needs to

handle multiple balls at the same time, organizations need to compete on multiple markets at

once. Ambidextrous organizations achieve higher levels of financial performance and also deal

with possibly opposing pressures from preliminary and exploitative innovations. For example,

argued that ambidextrous organizations create dual organization structures for governing the

innovation process (Duncan, 1976). In this respect, organizational units change their structure of

organizational form to assist the beginning and the carrying out phase of the innovation process.
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GMGA 3073 Strategic Public Management

The structure of industry has changed thoroughly over the past 10 years; companies are

faced with more risk and doubt than ever before. Regulations and legislation on the environment,

sustainability and safety on sites have positioned more accountability on organizations.

Customers and owners expect more, they do not want surprises, and are more likely to engage in

lawsuit when things go wrong. Risk management has become a crucial part for all the companies

in market. Risk management is dependent on the collection and feedback of data and the skill of

the decision-maker to understand and utilize the data (Roger, n.d.).

Achieving strategic business objectives, positioning the organization for sustainable

growth and competing in the global arena has placed a new demand on organizations. The

challenge is to recognize those leadership roles that can make a real transformation to

organizational performance. The main issue is the leadership role enacted. The successful

development of strategy formulation, implementation and evaluation requires a consistent and

coordinated commitment from top management. Leadership needs to recognize new pathways

for the organization to follow and allowing it to build momentum for the future (Mosia &

Veldsman, 2004).

4.0 Conclusion

The field of strategy has evolved substantially over the years. Firms have learned to

analyze their competitive environment, define their position, develop competitive and corporate

advantages, and understand threats to sustaining advantage in the face of challenging competitive

threats. Different approaches including industrial organization, the resource-based view, dynamic

capabilities, and game theory have helped academicians and practitioners understand the
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dynamics of competition and develop recommendations on how firms should define their

competitive and corporate strategies. Strategy management represents an important tool for

business management in a competitive and turbulent marketplace, the main objective of strategy

involves preparing the organization to confront the current hostile environment, to this end

systematically and objectively deploying the skills, qualifications and internal resources of the

enterprise.
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5.0 References

1. Academic Library. (2014). The Evolution of Strategic Management. Retrieved March 7, 2017,

from Academic Lib.com- Free online college e textbooks:

http://academlib.com/3798/management/ evolution_strategic_management

2. Alan, C. (2014). Corporate Governance Principles and Recommendations (3rd ed.). ASX

Corporate Governance Council. Retrieved from http://www.asx.com.au/documents/asx-

compliance/cgcprinciples-and-recommendations-3rd-edn.pdf

3. Appa, C. & Parvathiswara, B. (2008). Strategic Management and Business Policy: Text and

Cases (1st ed.). New Delhi: Anurag Jain.

4. Baret, S., Sandford, N., Hida, E., Vazirani, J., & Hatfield, S. (2013). RolesandResponsibilities.

Deloitte (1st ed.). Board Governance. Retrieved from http://www.corpgov.deloitte.com/

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5. Bradach, J. (1997). Using the Plural Form in the Management of Restaurant Chains.

Administrative Science Quarterly, 42(2), 276. http://dx.doi.org/10.2307/2393921

6. Bryson, J.M. (1995). Strategic planning for public and nonprofit organizations. San Franciso:

Jossey-Bass Publishers.

7. Cole, G. A. (1997). Strategic Management. London: Thomson Learning, High Holborn House.
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8. Diwan, P. (1999). Strategic Management. Kuala Lumpur: Golden Books Centre Sdn. Bhd.

9. Dess, G. G., McNamara, G., & Eisner, A. B. (2013). Strategic Management: Creating

Competitive Advantages. McGraw-Hill Education.

10. Duncan, R. (1976). The Ambidextrous organization: Designing Dual Structures for

Innovation (1st ed., pp. 167-188). New York: North Holland: The Management of

Organizational Design.

11. Ferrell, O., Thorne, D., & Linda, F. (2015). Business and society (4th ed., pp. 30-50). New

York: McGraw-Hill Education.

12. Fidler, C., & Rogerson, R. (1996). Strategic management support systems. London: Pitman

Publishing.

13. Fishman, C. (2007). The Wal-Mart effect (1st ed.). London: Penguin Books.

14. Grant, R. M., & Jordan, J. (2012). Foundations of Strategy. United Kingdom: John Wiley &

Sons, LTD.

15. Lee, I. (2016). Encyclopedia of e-commerce development, implementation, and management

(1st ed., pp. 2365-2375). Hershey: Business Science Reference.

16. Lees , G. (2008). Strategic Position. London: CIMA Offical Terminology.

17. Markides, C. (1997). Strategic Innovation (1st ed., pp. 9-23). Sloan Management Review.
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18. McKinsey & Company,. (2013). Disruptive technologies: Advances that will transform life,

business, and the global economy (p. 3).

19. Mosia, M. & Veldsman, T. (2004). The Importance Of Different Leadership Roles In The

Strategic Management Process. SA Journal Of Human Resource Management, 2(1).

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management:Formulation,implementation.

New York: McGraw-Hill.

21. Schlegelmilch, B., Diamantapoulos, A., & Kreuz, P. (2003). Strategic innovation: the

construct, its drivers and its strategic outcomes. Journal Of Strategic Marketing, 117-132.

22. Thomas, W. (2016). Essentials of Strategic Management (1st ed.). Germany: beck-shop.de.

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Of Expansion Into Foreign Markets. In International Conference 2013 (p. 1006). Zadar,

Croatia: ToKnowPress.

24. Yip, G. (2002). Total global strategy (1st ed.). London: Prentice Hall.

25. Zott, C., Amit, R., & Massa, L. (2010). The Business Model: Recent Developments and

Future Research. SSRN Electronic Journal, 18. http://dx.doi.org/10.2139/ssrn.1674384