Reference no: EM131048658

Question 1

Incremental change

Patterson and Sorrellsurl...cited Kurt Lewis  statesfor one to truly understand something, try to change it. This is a relevant statement when making changes within the organisation. During the period of organisational change much focus is put on the structure, tools, resources, measurements, procedures and policies. Nevertheless, for the initiation to be effective people need to buy in and be committed. Thompson defines incremental change as re-constructing the organisation. Changing a specific detail the whole organisation changes over time.

Smit and Cronje refer to this type of change as a first order change, evolutionary or gradual change. Smit uses the example when the University its current registration incrementally to become more efficient, that University is implementing a change of the first order. Smit continues to say in this type of change there are no major consequences to other parts of the system .Old ways of doing things is replaced with new systems for an example Tertiary institutions are now moving away from using the normal application system of applying using hard copy application form. Online application is widely adopted by many institutions.

Discontinuous change

This change is also referred to as revolutionary change, second order or radical change. Smit and Cronje uses the the example of Arcelo Mittal one of the gaint steel firm were left with no option but to cut down cost by 40% in order to become competitive at international level and also to comply with the benchmark in the steel industry. Smit and Cronje adds that this radical change had a huge impact not only to the senior management and executives of the firm but also to the employees at large, they were required to apply for job from scratch.

Question 2

Strategic Success

Strategic success can be measured in different ways in the strategic management. To determine if the organisation is in a better position to earn above-average returns for its investors. Investors would want to invest in an organisation that earn above average.Organisations that do not have a competitive advantage in an appealing industry an be at the advantage to earn above-average returns. If the organisation is unable to fulfil this requirement it is certainly set to fail. Assessing the success in strategic management terms is also determined by the organisations strategic competitiveness in which other organisations are not able to imitate their product and they find it very difficult and expensive to duplicate  For an example, Broadmoor has been honoured with its outstanding performance by adhering to a strategy of proving the highest levelof customer service for over 40 consecutive years. Ehlers and Kobusalso stated that strategic success can also be successfully fulfilled if the organisation has essential capabilities in place, resources only may not help the organisation to be productive

Above-average returns

Competitive advantage

Ehlers and Kobus cited Michael Porter 1995,178 that competitive strategy is when the organisation engages to the activities in order to gain competitive advantage in a specified industry. The competitive advantage of the organisation responds to the question: what advantage or competency the organisation use to characterise themselves from other competitors? Competitive advantage must be perceived as a competitive advantage and it must have characteristics of sustainability, it must not be easily copied by its competitors.

Competitive advantage and above-average returns are obtained easily when the organisation has rare, valuable resources that cannot be easily imitated rather expensive to duplicate, non-sustainable or unique. This puts the competitive advantage of the organisation on the edge.Louw and Venter, 2013:24

Competitive advantage and strategic survival closely relate to strategic competitiveness and the organisation can sustain and maintain competitive advantage over a long period of time. It is vital to keep in mind that survival means an organisation that is able to survive in a longterm.Brewsteretal 2012..31 cited Barney J 1191,17that the organisation is termed to have a sustained competitive advantage when the company is administering a value creating strategy not being executed by any present or potential competitors and these other companies must not imitate the benefits of this strategy.

Olso and Stanely......stipulates that a competitive advantage is to simply 'beat the competition'.He uses Broadmoor advantage as an example to conclude that excellent service is the only key to Broadmoor hotels competitive advantage but the real secret is in the collaboration of its structure and systems to its market strategy which is basically on behaviours that create superior customer value and this strategy makes it difficult for other competitors to imitate the strategy.Louw and Venter continue to say sustaining competitive advantage is the biggest challenge in the organisations. A competitive advantage can only be sustained for a specified period of time given the pace with which competitors are able to copy value creating capabilities. For an example Kodak they focused too much on the film technology for a very long time. This almost cost the company their customers and this decline pushed Kodak to reorganise and stimulate its digital transformation.

Strategic survival

Study guide....37 declares that closely related strategic competitiveness and competitive advantage is strategic survival. Continues to say the manner in which the organisation is able to maintain and sustain a competitive advantage for a long period of time.

According to Drawer and Frost , 1999  cited by..pdf10..in their study they stated that successful organisations have adopted the powerful multinational competitors .Vist in Russia and ShangahiJahwa in China have successfully defended their home turfs against such multinationals as Compaq and Unilever. Jollibee Foods in Philippines and Cemex in Mexico have built on strength at home and launch international expansion strategies of their own strategy options. In some instances organisations in local industries can go an extra mile in protecting their current markets.

Saturn project which was established by General Motorsa $5 billion investment . The project was initiated to back the increase in imported cars. After two years of inception the project drastically went back. The decline was as a result of resources available at General Motors, due to increasing competition. Methe and Perry cited Buss and Guiles 1986. The decline of Saturn project is a testimony that there is a strategic challenge which finally affects the survival of the organisation

Question 3

Corporate-level strategy

Bettis states that strategy content which is corporate, business and functional levels , are the outcomes of the  strategic decision making. Corporate level strategy is about the overall scope of an organisation and how well value will be added to its different business divisions. Bettis continues to say corporate level strategy is about developing, selecting and managing a set of businesses that compete in different industries.

According to Venter......265).corporate level strategy pin point the actions that the companies follow to gain a competitive advantage by choosing a group of different businesses competing in the different markets. For an exampleAnglo American Corporation owns businesses in mining, retail, media and other sectors, the strategic decision formulators base their reviews on a set of assumptions or hypotheses in which competition in the industry probably develops. According to (Barney and Hesterly)the greater the extent to which these assumptions and hypotheses accurately reflect how competition in this industry actually develops, the more likely it is that an organisation will gain a competitive advantage from implementing its strategy.

Bettis .....Businesses are required to find balance so that the corporate portfolio imparts to the long term economic-sustainability of the organisation (Stead and Stead)

Business level strategy

 Venter.......262).This strategy is often referred to as competitive strategy as they relate to the organisations well planned decisions on how to fulfil its customer's needs and how to respond to the competitive efforts of its rivals. This strategy is based on the products and services an organisation needs to develop and position in the market to achieve a competitive advantage. Bettis states that this strategy works with the individual business or a business unit, the organisation operates and focuses on how to compete effectively in an industry.....He continues to say the unfavourable decision for the organisation at the business level is the option of which products or services to offer the market, for the organisations with the intention of becoming more sustainable have to decide whether  to update their current products and services. He states that the sustainability of products powerfully influenced by the new technologies that are used in their production line.

For an example...the type of raw material s that can be used determine the potential production process, the amount of pollution discharged during the production  process, health and safety of employees and the public together with waste management.

Functional level strategy

Kobus...214 defines this strategy as annual tactics, this is associated with business units. In practical terms this means that functional strategy together with the action plans have to be developed to ensure that  all organisational units, divisions departments and project teams  practice what they have to do in order to implement the strategy effectively. The following aspects will be required at a functional level human resources, capital and time. And these will allow the top management of the organisation to determine the potential of each strategic alternatives realistically .For the above mentioned reason it is vital that functional managers be part of strategic planning process. Venter stipulates that it is empirical to understand the functional implicationsof grand strategies formulatedat top management level.Venter.....464) add on to say, in organisations functional units include  marketing, human resource, information system, finance, operations like production or manufacturing and research and development. Functional strategies are unique to each organisation and no function be independent from one another, they should be integrated as it is stated in the principle of Gestalt.

For an exampleWoolworths opted todiversify and expand its product line to include food, groceries and fresh produce, a functional strategy had to be developed in ensuring that this grand strategy is effectively executed.

Question 4

Inside-out perspective

Louw and Venter..35... states that strategic leaders who inherit this perspective understand that strategies are to be designed and developed around the organisation's resources and dynamic capabilities, strategic architecture, goals and values together with business intelligence to stand a better chance of succeeding in the external environment. This is called strategic stretch.BB Journalthe internal capabilities especially the human ones have a signicant role and they are often undermined by the strategists. Strategy success can be recognised if it has support from the right group of people and other resources, these must be sufficiently aligned with the strategy.

Kobus116 ..The organisation may have resources available but if there are capabilities to put together the organisation and for a long period of time. The interrelationship between resources and capabilities is keyfor the organisation for example Glomail's data base is not of utmost importance if no one is behind it.

Venter.....25 for the organisation to stretch its resources and capabilities depends on its strategic architect. This move is supported by internal coordinators to intergrate functions within the organisational external coordinators.The well planned relationship between the two perspectives will result to competitive advantage and above-average returns.Well formulated and properly developed strategies will build a robst organisational capabilities, values and goals.

Outside-out perspective...

Venter...  states that this perspective is a market driven strategy, strategies should be designed and developed to considering the market needs and response to external environment.BB journal....the business may be threatened by the rivalry that can produce the same quality goods at a reasonable price or better products at the equal price. Outside strategy must be able to withstand these threats. He continues to say, one of the responsibilities of strategists is to examine the outside environment for threats and opportunities they also have to consider the perspective of customers, industry experts and suppliers . These authors perceive this out-side perspective as a robust strategy. He continues to say other organisations especially in the technological fields assign scientific teams and engineers to assess the external environment. Brewster HRMdeclares that aligning organisations strategy and its resources together with the environment the organisation can inherit superior performance; this alignment is regarded as strategic fit.