The goal of any form of strategy development is to create a sustainable profitable organization. Intended strategy development processes focus on analytical understanding of the business environment and use a variety of forecasting tools to determine organisational strategy and are usually top down strategies with decisions being made by senior management groups (Johnson, Scholes & Whittington, 2008). Forms of intended strategy development processes include:
- Strategic Leadership;
- Strategic Planning Systems; and
- Externally Imposed Strategies.
Strategic Leadership
Strategic leadership is regarded as an intended form of strategy development (Johnson, Scholes & Whittington, 2008) and it can be considered to be a top down strategy development process. A management group or a specific leader drives the organisation to pursue a particular strategy such as niche product offerings or diversification and appropriate decisions are made throughout the company (Johnson, Scholes & Whittington, 2008).
Three forms of strategic leadership have been identified by Johnson, Scholes & Whittington (2008):
- Design;
- Vision; and
- Command.
Design represents those situations where the strategic leader has made strategic decisions based on analytical techniques including those used in formal strategic planning processes (Johnson, Scholes & Whittington, 2008). An authoritarian leader may use strategic leadership as a command and this form of strategic leadership may frequently be seen in smaller organisations (Johnson, Scholes & Whittington, 2008). Strategic leadership as command means that all strategy is decided upon and carried out in accordance with the strategic leader’s wishes (Johnson, Scholes & Whittington, 2008). Vision refers to the creation of the overall picture of the organisation (Johnson, Scholes & Whittington, 2008).
Strategic leadership can be used to develop the organisation and seek new opportunities and it may result in an improved organisation culture through understanding, respect and individual development (Ireland & Hitt, 2005).
Strategic leadership based on design has similarities to formal strategic planning processes. Both forms of strategy development processes utilise analytical thinking in relation to the organisation, its current capabilities and future opportunities and threats.
Strategic Planning Systems
Formal strategic planning is deliberate examination of future capabilities, opportunities and threats (Armstrong, 1982) and requires the commitment of key stakeholders including the board, shareholders, managers and employees (Armstrong, 1982). Formal strategic planning systems can be utilised to exercise control over the organisation and provide direction, control systems and metrics (De Wit & Meyer, 2004) and can be used by managers to alienate employees through exerting additional controls (Armstrong, 1982); however they may ultimately provide value to an organisation through the analysis and brainstorming process (Powell, 1992). There is a growing trend of using formal strategic planning systems in community organizations, particularly where there is a requirement to obtain funding from government sources or a requirement to report against performance metrics.
Externally Imposed Strategies
The final recognised form of intended strategy development is externally imposed strategy. It is a form of intended strategy development process that the organization does not control; rather the organization is forced into new or different business practices. For community organizations, externally imposed strategies may result from changes in funding agreements that may require that the organization move from providing individually based services to group based services or the need to develop comprehensive care plans or increase consumer involvement in the governance of the organization. If a situation arises where it is likely that an externally imposed strategy is going to affect a community organization, it is important to plan to successfully implement the strategy; at these times the use of formal strategic planning systems is recommended together with open communication with the external body that is imposing the strategy.
The importance of planning for a community organisation cannot be under-estimated and intended strategy development processes including strategic leadership and formal strategic planning processes can help chart a course for a successful organization. In situations where strategy is forced on the organization by an external body, such as changes to government funding arrangements, it is vitally important to use formalised systems to review how to best implement the externally imposed strategy.
Sources
- Armstrong, J. S. (1982). The value of formal planning for strategic decisions: review of empirical research. Strategic Management Journal, 3, 197-211.
- De Wit, B. & Meyer, R. (2004). Strategy process, content, context: an international perspective (3rd edition), Thomson, London
- Ireland, R. D. & Hitt, M. A. (2005). Achieving and maintaining strategic competitiveness in the 21st century: the role of strategic leadership. Academy of Management Executive, 19(4), 63-77
- Johnson, G., Scholes, K. and Whittington, R. (2008). Exploring corporate strategy (8th edition), England: Pearson Education Limited
- Powell, T. C. (1992). Strategic planning as competitive advantage. Strategic Management Journal, 13(7), 551-558.
Tracey Lloyd - Based in Australia, Tracey Lloyd is experienced in management & strategic development of community projects and non-profit ...
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