MANTISSA COLLEGE

DAMANSARA
KUALA LUMPUR




NAME:
COURSE: STRATEGIC MANAGEMENT
COURSE CODE:
LECTURER: MR. SUREN DEV





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TABLE OF CONTENT
Topic Pages
Introduction 3
Question 1
Explain why an organization needs a strategy? 3
What will likely to be happened to organisation with bad strategy implementation? 4-5
What are the possible solutions to overcome the bad strategy implementation? 5

Question 2
Strategy formulation 5
Strategy implementation 5
Strategy evaluation 5-6
Conclusion 7
References 8

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INTRODUCTION
In todays turbulent and competitive business world, strategy is one of the most significant
concepts to emerge in the field of management for a company to survive and to be successful.
Strategy is the direction and scope of an organisation over the long-term; which achieves
advantage for the organisation through its configuration of resources within a challenging
environment, to meet the needs of markets and to fulfil stakeholder expectations (Johnson,
(1993). However, managers and entrepreneurs are now alert to the fact that environment scan
change at any point of time and hence any plans made should follow a strategy that includes
contingency planning too. Organisations use possibility planning as overall security plan to
ensure the quickest return of information services in the event of experiencing a service
disruption.
This assignment will focus on why an organisation needs a strategy, consequences of
implementing a bad strategy, possible outcomes in overcoming bad strategy and stages in
strategy development.


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An organization without a strategy resembles a ship without a rudder means a business may have
employees, resources and drive, but if it does not have a clear and convincing vision of where is
direction, it is heading for destruction and that is why organizational strategy are designed to
avoid this situation, and to keep organizations moving efficiently toward their goals(Joel and
Kami, 1998).
QUESTION 1a: Why Organisations need strategy
Organisations need strategy to provides overall direction to the enterprise and is closely related
to the field of organizational studies. In the field of business administration it is useful to talk
about strategic consistency between the organization and its environment. We must consider
strategy as a set of actions that we take in order to achieve progress. Goals are the final
destination that we arrive at, as a result of the progress made so far within the organization
(Porter, 1985). For example, when both stakeholders and shareholders of the organization see
that the company knows where it is going and is making efforts in that direction, it becomes easy
for them to invest and place their trust in the management of that company . And this can only be
possible as goals are being achieved regularly, such that they point to the overall objective of the
company. With this in mind, there is no successful company today, which has not taken serious
steps to preach their main objectives to their workers and to their stakeholders (Porter, 1980).
Therefore, for the achievement of maximum growth and a strong competitive advantage, every
company needs a strategy that is clearly defined.
Dynamism in the business environment is another reason why organisation needs a strategy
because of the constant changes in the external environment. Having a strategy will let them
know when they are operating on the wrong side and another strategy is quickly developed to
keep them back on track. Changes in the world leading economy can affect business
environment in another part of the world as a result of globalization.

Furthermore, an organisation strategy is needed because it provides management with a
benchmark to measure a company success or failure. What gets measured improves. However,
it's difficult to measure the success of the organisation if there is no clear strategy (Drucker,
1973).
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Also, developing organisational strategy gives competitive advantage as an advantage over
competitors gained by offering consumers greater value, either by means of lower prices or by
providing greater benefits and services that justify higher prices. Michael Porter has developed a
framework in which he identifies four basic business strategies that could be adopted in order to
gain competitive advantage. The four strategies relate to the extent to which the scope of
businesses activities are narrow versus broad and the extent to which a business seeks to
differentiate its products as shown in the

QUESTION 1b:
Organisation with a bad strategy implementation will not be able to achieve its vision either long
or short term. Strategy is a guide to the forecasted goals and when a bad strategy is implemented
then the organisation is sure heading to the wrong direction and whenever new strategies are
implemented but the organisational structure remain the same, administrative problems will
begin to emerge (chandler, 1965).
Another mishap that is likely to happen to an organisation that operates with bad strategy
implementation is lack of competitive advantage over its competitors because there is no way
they can understand there consumers and in order to successfully implement any strategy, the
business must understand the customer, including information about gender, age, values,
consumption patterns and geography. Anticipating the needs of the customer and answering
these needs can give a business an advantage over the competition and then businesses can work
toward satisfying customers by creating strategies that have value to the organisation and the
customer.
Furthermore, it will also reduce the profit margin of the organisation because there is proper
game plan or strategy to annex external opportunities and no defensive strategy on threats pose
by the environment.
Richard Rumelt (2011) said that most companies have strategies that are unrealistic, muddled
and undifferentiated. This is hardly surprising, since in recent years the very idea of strategy
has been brought down by a deluge of nave advice and simplistic frameworks. Managers should
know that the essence of strategy is a clear and differentiated point of view that supports forceful
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and coherent action. He also ascertained that the major cause for bad strategies is when
organizations plan poorly, or are found doing the wrong things, while their competitors are doing
the right things. The major key, according to Rumelt, is to do the right things, and the right
amount of success will come to your organization.
A good strategic plan has become the foundation for effective and successful businesses. The
reason for this is simple: sound strategy will lead to a better chance for success. We then need to
ask ourselves a question: What does a poor strategic plan look like? The following are four
features of a strategic plan that will definitely miss the mark.
They make the mistake of failing to face the challenges. The tendency to overlook certain
issues that seem not to be too important at the moment.
Over-optimistic Expansion: Using high debt to finance investments in new facilities and
equipment, then getting trapped with high fixed costs when demand turns down, excess
capacity appears, and cash flows are tight.
When objectives are not clearly defined to the employees of the organization, nobody will
know exactly what is expected of them as a goal.
Unrealistic Status-Climbing: Going after the high end of the market without having the
reputation to attract buyers looking for name-brand, prestige goods (e.g., Sears' attempts to
introduce designer women's clothing)
Many companies repeatedly fail to truly motivate their people to work with enthusiasm, all
together, towards the corporate aims. Most companies and organizations know their businesses,
and the strategies required for success. However many corporations - especially large ones -
struggle to translate the theory into action plans that will enable the strategy to be successfully
implemented and sustained (Kouzes & Posner, 1995).

QUESTION 1c
In order to overcome bad strategy implementation, corrective measures must be taken by going
back to the formulation stage and re-formulate some of their strategy aligning it with both
external and internal environment. Also check for the root cause of the first strategy
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implemented and why is not working or yielding anticipated result. In a bid to overcome bad
strategy implementation, new environmental analysis must be performed, formulation of new
strategies which should be developed by all the stakeholders in each department of the
organisation in order to include them in the process and share their experiences based on what
they are encountering on daily basis. After deciding on which strategy to choose out of all the
alternatives; there must proper communication to the employees, realistic synergy expectations,
well-structured system, top management commitment and a clear strategic fit. However, every
operational manager, down to supervisor and the entire employee must be involved in one way
or the other (Gopinath, 1991).
Nonetheless, the new formulated strategy must be given some time to evaluate its performance in
the organisation and business environment. The purpose of the evaluation or assessment is to
measure if goals and objectives of the organisation is achieved through these strategies.
Overcoming bad strategy implementation requires managers to develop programs, budgets and
procedure for implementation of strategy and achieving synergy among divisions and functional
areas in order to establish and maintain the organisational distinctive competence. Programs
must be developed to create a series of new organisational activities, budgets to allocate funds to
the new activities and procedures on how to handle the day to day details. Above it all, it must be
checked at all time to see if the major purpose of implementation is achieved (Hrebiniak, 1984).

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QUESTION 2
STRATEGY FORMULATION
This is the process of development of long term plans for the effective management of
environmental opportunities and threats. It is also the stage of deciding best course of action
among the various strategies formulated for accomplishing organisational objectives and later
achieving organisational purpose. Before formulation, general environmental scanning must
have been properly conducted which is monitoring; evaluating and disseminating information
from the external and internal environment of the organisation. The simplest way to conduct this
scanning is through SWOT analysis. Thereafter managers formulate corporate, business and
functional strategies (David et al, 2011).
STRATEGY IMPLEMENTATION
This is the process in which strategies and policies are put into action through the development
of programs, budgets and procedures. Although implementation comes after strategy has been
formulated, implementation is a key part of strategic management. This implies making the
strategy work as intended or putting the organisations chosen strategy into structure distributing
resources, developing decision making process and managing human resources. However, this
stage is very crucial in organisational success, after formulation of strategies if they are not well
implemented the organisation may not succeed (Chandler, 1962).
STRATEGY EVALUATION
Strategy evaluation is the final step of strategy management process. Corporate activities and
performance results are also monitored, so that actual performance can be compared with desired
performance. Managers use the resulting information to take remedial action and resolve
problems. It also reveals weaknesses in previously implemented strategic plans and stimulates
the entire process again. The key strategy evaluation activities are assessing internal and
external factors that are the root of present strategies, measuring performance and taking
corrective actions. Evaluation makes sure that the organisational strategy as well as its
implementation meets organisational objectives (Hill and Jones, 1998).Benefits of strategic
evaluation are
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Provision of Direction: They enable management to make sure that the organisation is heading
in the right direction and that corrective action is taken where needed.
Guidance to Stakeholders: Everyone within the organisation, both managers and workers alike,
learn what is happening, how their performance compares with what is expected, and what needs
to be done to keep up the good work or improve performance.
Inspire confidence: Information about good performance inspires confidence in everybody.
Those within the organisation are likely to be more motivated to maintain and achieve better
performance in order to keep up their track record.


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CONCLUSION
It is imperative to have strategy as well as analysing the operating environment before
formulation and implementation of strategies and without leaving no stone unturned.

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REFERENCES
David, R. (2011) Strategic management concepts and cases, 13
th
Edn, New Jersey: Prentice Hall
Drucker, P., (1973)Management: Tasks, Responsibilities, Practices, p. 325.
Gopinath, C., (1991) Turnaround: Recognizing decline and Initiating Intervention, Long Range
Planning, pp.96-101
Gerry, J. and Scholes, K. (2001) Exploring Corporate Strategy, 3th Edition, Prentice Hall:
Pennsylvania State University
Hill C.W. and Jones G. R., (1998) Strategic management, 4
th
Edition, Boston: Houghton Mifflin
Company
Hrebiniak, L.G. and Joyce, W.F. (1984) Implementing Strategy, New York: McMillian, pp. 85-
86
Kouzes, J.M., and Posner, B. Z. (1995). The Leadership Challenge: How to Keep Getting
Extraordinary Things Done in Organizations. New York: Jossey-Bass Publishers.
Porter, Michael E. (1985). Competitive advantage: Creating and sustaining superior
performance. New York: Free Press.
Pearce J., Robinson R.,(2003) Strategic management, 8
th
Edition, Columbus: McGraw Hill
Companies
Ross, J. and Kami, M. (1998)Corporate Management in Crisis: Why the Mighty Fall, New York:
The McGraw-Hill Companies
Rumelt, R. P. (2011) Good Strategy, Bad Strategy: The difference and Why it Matters. Crown
Publishing Group, N. Y. USA.