Many organizations have plans going well into the future with strategic goals spanning five to 15 years. Corporate strategy is a pattern of decisions and plans which are directed at interacting with the external and internal environment and effectively and efficiently allocating capabilities to achieve organizational objectives. There are different types of strategies, and one type can create better results for companies when compared to others.
In my experience working with international companies, executives often consider the four dimensions of corporate strategy, including analysis, proactiveness, defensiveness and futurity.
Analysis strategy is the tendency to search for problems and their root causes, and generate better alternatives to solve them. When executives analyze strategy, they can create more knowledge and find the best solution using a search of various options. This type of strategy also stimulates companies to apply information systems in their decision-making processes in order to investigate various alternatives and options. Also, executives analyze strategic milestones to meet the goals of employee development. This strategy provides new and innovative solutions for organizational problems as they arise. To develop this strategy, executives can particularly contribute to the development of a workplace in which there is/are:
- Emphasis on the effective coordination among different functional areas.
- Extensive use of information systems to support decision-making.
- Comprehensive analysis undertaken when confronted with an important decision.
- Use of planning techniques.
- Effective deployment of management information and control systems.
- Use of manpower planning and performance appraisal of senior managers.
Proactiveness is a strategy element used by executives to search for better positions in the business environment. As executives use the proactive strategy, which refers to finding new opportunities and responding to current challenges in external environments, they can enhance their span of control. To cultivate a proactive strategy, executives can contribute to the development of a workplace in which there is/are:
- Constant search for new opportunities.
- Attempt to introduce new brands or products in the market.
- Constant search for businesses that can be acquired.
- More effective expansion of capacities when compared to competitors.
- Strategic elimination of those operations that are no longer profitable in later stages of life cycles.
Defensive strategy recommends undertaking behaviors that manifest themselves in enhancing efficiency and in cutting costs while maintaining continuous budget-analysis and break-even points. A defensive strategy utilizes modifications in order to efficiently and effectively use organizational resources, decrease costs and control operational risk. Some executives feel that a defensive strategy, while necessary, sets a negative connotation on their span of control. A defensive strategic approach, in fact, enhances organizational learning through reusing commercial knowledge. To foster this strategy, executives can contribute to the development of a workplace in which there is/are:
- Regular modifications to the manufacturing/service technology.
- Use of cost control systems for monitoring performance.
- Use of current management techniques to ensure that we move smoothly at the required level.
- Emphasis on product/service quality through the use of work improvement teams.
A future-focused strategy is reflected in the degree to which the strategic decision-making process takes a two-way approach—an emphasis on both long-term effectiveness and shorter-term efficiency concurrently. Executives use futurity strategy to expand the growth opportunities available to companies to close the gap between success and failure. Futurity strategy implements basic studies to identify and actively respond to the trends and changes occurring in the external environment to provide better outcomes. To create a future-focused strategy, executives can contribute to the development of a workplace in which there is/are:
- Specific criteria used for resource allocation that generally reflect short-term considerations.
- Emphasis on basic research to provide us with a competitive edge for the future.
- Key indicators of operations forecasted.
- Formal tracking of significant and general trends.
- Regular analyses of critical issues.
The key for executives is to develop a workplace and organizational processes that support the corporate strategy that they employ. By picking the right strategy, organizations can continue to prosper. Success, therefore, is dependent upon how executives formulate and execute their corporate strategy. Executives can now see how they can cultivate an effective corporate strategy, which can enable superior performance to achieve business objectives.