A strategy is a plan of action designed to achieve a long-term or overall aim. A strategy comprehends all the aims of the organization which makes it easier to attain these long-term goals of the organization. For every business activity to be successful, a strategy should be put in place and it is with this strategy that determines the extent of business success. According to Cascade, 95% of employees do not understand their organization’s strategy. Therefore, an organizational strategy should be there in place in order to guide the organization’s stakeholders into the organizational success.
What is an organizational strategy?
Organizational strategies sum up all of the actions you intend to take in order to achieve your long-term business goals. Organizational strategy will emanate from your company’s mission that is, the reason you’re in business. Every action the company takes should aim to fill that one purpose, with that mission guiding all of your strategic decisions. Organizational strategy determines the literal and metaphorical shape of your business. Your corporate culture determines and is determined by how you build your organization and place the people and responsibilities that encompass your business activities.
Key principles to an effective organizational strategy
For an organizational strategy to be effective, it has to follow the ‘SMART’ criteria that is, specific, measurable, attainable, realistic and time bound.
Specific- Being clear about your goals and expectations.
Measurable- goals and objective need to be quantified in order for them to be measured/audited.
Attainable- stakeholders should feel motivated by the satisfaction of achievable achievement.
Realistic- ensure that goals are relevant to your goals or business objectives over time.
Time-bound- it’s incredibly important to have a time-frame for your goals.
Importance of organizational strategy.
1.Aligning Departments & Teams Towards Business Goals.
Organizational strategy ensures that resources are being used efficiently. It helps recognize redundancies and opportunities for collaboration, as well as identifying areas of deficiency within the business’s current structure and staffing. It reinforces the business’s goals into the context of teams and departments.
2. Provide Framework for Better Decision-Making Process.
Decision making can be easier and better when there is an organizational strategy because it states clearly the flow of responsibility and information. Organizational strategy provides a mechanism that facilitates clear authority that ultimately saves time and removes doubt over who gets a final say.
3. Clarifies Direction & Priorities.
By clarifying and out sketching the hierarchies of responsibility, the organization endorses a direction and power structure that dictates the paths it will take going forward. This helps organizations to stay in line with its overall goals.
4. Strategy helps with sustainability and competitive advantage
It literally tells you how to rank your competitors one by one and then overtake them on your ladder to success. When you are making your strategy, you look at where you are standing in the market currently and you plan down the line. As a result, you are increasing the sustainability of your business. You are planning for anything that does not work out well for you and you are also planning in case anything works out too well.
5. Strategy helps in preparation for different markets and products
With strategies in place, an organization can be able to achieve diversity in terms of markets and products. When a business becomes successful, it shows that its strategies are successfully being initiated and this enable an organization to focus on new markets and product which can add to the revenue of the company.
6. Strategy Optimizes and increases profits
One of the tasks assigned to the strategy department is to ensure price competitiveness while keeping an eye on margins. Besides doing that, Marketing strategy actually tightens up the complete process and operations of the organization, thereby contributing to a possibly increased profit and an increase revenue.
In conclusion, “An organizational strategy is the sum of the actions a company intends to take to achieve long-term goals (Johnson, 2016)”. Organizational strategy is derived from a company’s mission, which tells why an organization is in business. Therefore, the top management produces the larger organizational strategy because of decision making that affects the entire organization, while middle and lower management adopt goals and plans to satisfy the overall strategy. More so, the organization should adopt strategies that affective and efficient in order for the business to strive.
References
- Patel, M.R., Vashi, M.P. and Bhatt, B.V., 2017. SMART-Multi-criteria decision-making technique for use in planning activities. New Horizons in Civil Engineering (NHCE 2017), pp.1-6.
- Bjerke, M.B. and Renger, R., 2017. Being smart about writing SMART objectives. Evaluation and program planning, 61, pp.125-127.
- Miles, R.E., Snow, C.C., Meyer, A.D. and Coleman Jr, H.J., 1978. Organizational strategy, structure, and process. Academy of management review, 3(3), pp.546-562.
- Rumelt, R.P., 1998. Evaluating business strategy. Mintzberg H, Quinn JB, Ghoshal S., The Strategy Process, Revised Edition, Prentice Hall Europe.
Ethan Tema is a consultant at Human Capital Experts
0242750549/ 0786889399
Consultant3@humancapitalexperts.co.zw
www.humancapitalexperts.co.zw