All types of organizations need effective leaders. The strategic leadership approach emphasizes the important role of leaders in developing business strategies in organizations. According to this approach, leaders have to play an important part in formulating business strategy because they are primarily responsible for the success or failure of organizations. Given this, strategic leaders are expected to inspire, guide, energize, set standards and mobilize people to make extraordinary things happen in organizations, overcome uncertainty, turn visions into realities and move organizations forward. Without strategic leadership, there would not be any extraordinary efforts needed to solve existing problems, capitalize on existing as well as potential opportunities and adapt to radical change.
More specifically, this particular approach is most relevant and applicable for organizations striving to achieve new organizational objectives with new strategies. Strategic leadership is required in such organizations because someone has to direct the way and make sure that everyone concerned gets there. Organizations that adopt the strategic leadership approach have leaders who can encourage and inspire individuals and teams to give their best in implementing the selected strategies. More importantly, this approach involves leading and directing people to use their abilities and skills most effectively and efficiently to accomplish organizational objectives. Strategic leadership involves:
Providing the management leadership and direction
Maintaining effective relationships within the organization.
Introducing action plans to put the programs in place (actions to be taken, by who, during what time frame, and with what expected results).
Gaining the commitment and cooperation of his team
Getting the group into action to achieve the agreed objectives.
Make the best use of the skills, energies and talents of the team.
Build up the morale of the employees.
In this approach, the chief executive officer (CEO) specifically leads and manages the organization by becoming and serving as the chief strategist. As the chief strategist, the CEO begins by having a clear framework of what he or she wants his or her organization to do and where she/he or wants it to be in the future. The CEO systematically envisions the future of the organization and strategically plans out how to take the organization there. In this approach, the CEO will be responsible for; making strategic decisions, allocating resources, planning and implementing the strategy implementation process, and revising the annual plan and strategy.
The other strategic approaches
In addition to the different approaches presented above, the literature also highlights other more recent relevant approaches that have been introduced and adopted by various companies in different industries. Similarly, these more recent approaches can be distinguished from each other based on their emphasis, focus and scope of the strategy developed. Table 1 summarizes the other more recent approaches as identified and promoted in the literature. Most of the strategic approaches presented in Table 1 were introduced in the early 2000s and 2010s.
Table 1: Other approaches to formulate business strategy.
Conclusion
This paper reviews some of the most common approaches used to develop business strategies in organizations. The literature and review of past studies indicate that business strategy in different organizations is developed through different strategic approaches. The evidence from the review suggests that the approaches are generally different from each other in terms of their complexity, strategic focus and scope. In addition, the review of the literature also unveils that each approach has its own set of limitations.
The differences in the approaches to business strategy further suggest that these approaches may not be necessarily relevant and applicable to all kinds of organizations. The approaches presented in this paper may be only applicable and relevant to certain types of organizations that operate in less complex business environments.
However, the importance of each approach to organizations will depend on how they define their business strategy, its strategic focus and scope. Concept of business strategy, various definitions have been used to describe the concept. Presently, there is no universally accepted definition of business strategy. The definitions presented in the literature differ not only from one author to the other but also they vary with the different strategic approaches used to explain and practice business strategy. In addition, each definition has its own strategic focus and scope. The strategic focus refers to the specific areas (or arenas) that a particular business strategy wishes to target. Apart from its strategic focus, each business strategy will also have its own scope. The scope refers to what extent the business strategy will stretch its target areas or arenas.
As for the approaches reviewed and presented in this paper, organizations should understand their strategic focus and extent of scope before attempting to adopt them. Nonetheless, organizations would stand a better chance of formulating their own effective business strategy by developing their abilities to size up and make sense of their business activities as well as becoming more aware of the continuous changes occurring in their business environment. More importantly, for organizations to be able to do all this, they need to first develop their competencies as well as seek new strategic directions and identify new strategic initiatives. With competencies, new strategic directions and initiatives, organizations are most likely to be able to identify as well as develop the most appropriate approach to formulate and implement a more effective business strategy. Organizations that adopt effective business strategies will not only be able to improve their organizational performance but also sustain their success.
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