Exploring the Underestimated Importance of Organizational Strategy

An organisation’s strategy normally starts with a clear intended plan, after analysing the various environmental, industry and organisational factors, discussing them with other managers, and expressing them in a formal plan. This is the intended strategy which is an expression of the desired strategic direction deliberately formulated and planned by managers.

This intended strategy development process can be achieved with strategic planning, as often, strategy development is equated with formalised strategic planning systems. However, the practice of top-down strategic planning seems to be declining in recent years with the shift to line managers taking responsibility for their strategy development. The development process of intended strategy can also be accomplished by holding strategic workshops with project groups, engaging outside strategy consultants and/or imposed externally by powerful external stakeholders.

On the other hand, the development process of emergent strategy as the realised strategy occurs as a result of daily routines, activities and processes within the organisation that give rise to decisions that become the long-term direction of that organisation. The organisational processes that might account for the development of emergent strategy are logical incrementalism, resources allocation routines, cultural processes and political processes. Logical incrementalism according to Quinn involves “learning from partial commitments rather than through global formulations of total strategies”. That is, emergent strategy is developed by experimentation which relies on the social processes within the organisation to sense environmental changes and try out new ideas.

Resources allocation routines on the development process of emergent strategy on the other hand, identify the process in which strategy emerges in organisations through formalised routines and systems of the organisation. That is, strategy develops as the outcome of resource allocation routines in organisations, sometimes known as the Bower-Burgelman explanation. This development process was also found to be similar in other later studies in this area.

Organisational culture and politics also influence the strategy development process. The culture of an organisation has a strong impact on the emergent and incremental development of strategy through the way things were done around here. This in effect is organisational culture driving the strategy and hence influencing the strategy development process.

This was confirmed by a study by Menon et al. which found that innovative culture is the fundamental antecedent of effective marketing strategy making and that strategy creativity directly affects market performance of an organisation. This implies that organisational culture and managerial creativity are important attributes in the development of strategy. Power politics in an organisation can also have a serious effect on the strategy development process through the outcome of the processes of bargaining and negotiation among powerful internal and external interest groups or stakeholders. Within all these processes, individuals do seem to play an important part in strategy development. Strategic leadership from the CEO, business founder, and top management influence the development of strategy through their vision. Such visionary capacity can be explained in terms of their intuition. Research indicates that this capacity of managers to use their intuition in decision making also plays an important role in strategy development. 

In conclusion, organizational strategy is critical component of any successful business. A well-developed strategy helps organizations to set clear objectives and define the steps required to achieve them. By creating a clear and concise structure, organizations can optimize their resources, streamline their operations, and ultimately achieve their strategic goals. The importance of organizational strategy cannot be overstated. Businesses that fail to plan and implement effective strategies are likely to encounter obstacles that can hinder their growth and success. Conversely, businesses that invest in developing and executing sound strategies are more likely to succeed and remain competitive in the marketplace.