Corporate and Functional Strategy Formulation and Strategic Choice Concepts

Posted: January 4th, 2023

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Corporate and Functional Strategy Formulation and Strategic Choice Concepts

Executive summary

This report on strategy formulation and implementation focuses on the concepts pertinent to the successful formulation and implementation of the corporate sustainability strategy. Corporate sustainability is increasingly being demanded by governments, public, and individuals inside and outside organizations as the demand for green corporate practices pervades the business environment. In developing a corporate sustainability strategy, companies grapple with i) the tradeoffs between competing resource demands, ii) strategic soundness of a selected action, and boundaries governing employees’ innovation and experimentation freedom within organizational constraints, as articulated in chapter 8 of the textbook authored by Wheelen, Hunger, Hoffman, and Bamford dubbed Strategic Management and Business Policy. The concepts considered here are communication, employee motivation, management control, leadership, organizational culture, and organizational structure as those that influence strategy formulation and implementation. In reading the article “Corporate sustainability strategy–bridging the gap between formulation and implementation”, car manufacturers implemented the corporate sustainability strategy successfully after considering the concepts to be considered in this study and influencing factors. The exposition of the concepts from this paper will grow my knowledge about corporate strategy, which I will explain individual to enhance thought organization and expression.

Abstract

1. Engert, Sabrina, and Rupert J. Baumgartner. “Corporate sustainability strategy–bridging the gap between formulation and implementation.” Journal of Cleaner Production 113 (2016): 822-834.

This article discusses the conditions that influence the successful implementation of a corporate sustainability strategy in the automotive industry. The article responds to the gap translating sustainability strategy into corporate practice and identified the factors that facilitate the bridging of the gap in formulation and implementation of a corporate sustainability strategy.

2. Kernbach, Sebastian, Martin J. Eppler, and Sabrina Bresciani. “The use of visualization in the communication of business strategies: An experimental evaluation.” International Journal of Business Communication 52.2 (2015): 164-187.

The authors of this article collect empirical evidence comparing visual and textual formats in communicating business strategies. After collecting evidence from 76 managers, the authors found that graphic presentation of strategy enhanced attention, agreement, and recollection of the organizational strategy compared to textual presentations.

3. Cloutier, Omer, Laura Felusiak, Calvin Hill, and Enda Jean Pemberton-Jones. “The importance of developing strategies for employee retention.” Journal of Leadership, Accountability & Ethics 12.2 (2015): 119-129.

This article discusses employee retention as being critical to the revenue generation, growth, and stability of an organization. Therefore, forestalling high employee turnover by increasing the longevity of employee tenures improved organizational performance because the workforce remained motivated through the retention strategies. The authors note that in after hiring highly-skilled and diverse employees, organizations needed to keep their employees motivated by implementing human resource training and development programs. 

4. Bedford, David S. “Management control systems across different modes of innovation: Implications for firm performance.” Management Accounting Research 28 (2015): 12-30.

This article discusses the importance of control levers as pertinent components of management control systems needed to promote innovation and enhance firm performance. After surveying 400 firms, the article demonstrated that control levers facilitated the balancing of exploration and exploitation, while supplementing organizational management control mechanisms, thus helping realize the organizational strategies. 

5. Jabbar, Ali Abdulridha, and Ali Mohammed Hussein. “The role of leadership in strategic management.” International Journal of Research-Granthaalayah 5.5 (2017): 99-106.

In this article, the authors delve into the significance of leadership in the process of strategic management. Effective leaders determined and articulated the vision and mission of their organizations, thus facilitating the effective implementation of organizational strategies. 

6. Bortolotti, Thomas, Stefania Boscari, and Pamela Danese. “Successful lean implementation: Organizational culture and soft lean practices.” International Journal of Production Economics 160 (2015): 182-201.

The authors of this paper investigated the organizational culture characteristics that influenced the successful implementation of lean management practices to enhance organizational sustainability. They revealed that successful lean companies had their organizational culture characterized by low levels of assertiveness, had a humane orientation, exhibited future orientation, and had higher levels of institutional collectivism.

7. Kaiser, Michael G., Fedi El Arbi, and Frederik Ahlemann. “Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment.” International Journal of Project Management 33.1 (2015): 126-139.

This paper discusses the place of organizational structure in effective implementation of organizational strategy. Using cases from the German construction industry, the authors argued that structural alignment was critical in realizing the strategic goals in project portfolio management in construction firms. 

Concepts

1. Communication: communication, in this context, is the passing of information about the organizational strategy to employees by their managers. Effective communication should ensure that the organizational strategy is well understood and recalled by the recipients of the information (Kernbach, Eppler, and Bresciani 165).
2. Employee motivation: it is the creation and maintenance of a high level of creativity, commitment and energy of employees at the workplace. It involved the provision of training opportunities and rewards to employees to prevent high employee turnover.
3. Management control: these are the procedures and routines used by managers to maintain and change the activity patterns in organizations. They are information-based and formal. They were activated using control levers such belief, boundary, interactive and diagnostic control levers
4. Leadership: strategic leadership is the quality of anticipating, envisioning, and maintaining flexibility while empowering others to accommodate the necessary change to enhance the realization of organizational strategies (Jabbar and Hussein 100).
5. Organizational culture: this is the set of learned ways, values, and beliefs developed over the history of an organization, which influence the behavior of the individuals therein
6. Organizational structure: it is about how information glows through an organization and the relationship between the different levels in an organization.

Analysis

Communication

The sustainability mission and vision, strategic objectives and initiatives needed to be communicated effectively through the entire organization to facilitate the successful implementation of the corporate sustainability strategy. In addition to regular sustainability reporting, strategy implementation was enhanced by standardized and transparent internal communication. Moreover, cross-department interaction reduced the conflicts that hindered the strategy implementation process (Engert and Baumgartner 831).

Employee Motivation

To sustain employee motivation in support of the corporate sustainability strategy implementation, employees needed to have sufficient knowledge to understand the implications of sustainability in daily corporate activities and rewarded sufficiently to contribute to the attainment of the sustainability targets (Engert and Baumgartner 831).

Management Control

Management control was critical for successful implementation of sustainability strategies in an organization. Assessment processes and performance indicators needed to be developed in a manner that makes them measureable and enable their monitoring. Management systems such as occupational health and safety assessment series (OHsAS) 1800 and ISO 14001 facilitate internal management control of the implementation of corporate sustainability strategies (Engert and Baumgartner 830).

Leadership

Leadership is invaluable and irreplaceable for implementing the strategy of an organization. Leaders needed to be intrinsically motivated to direct and positively influence the implementation of the sustainability strategy in an organization. The leaders that participated in strategy formulation and target-setting needed to participate in the implementation process to help translate the vision into practice (Engert and Baumgartner 830).

Organizational Culture

Sustainability needed to be embedded into the culture of an organization to facilitate the implementation of corporate sustainability. Sustainability culture upheld social and environmental values, thus influencing the behavior of managers and employees in an organization and directing actions toward sustainability goals. It can facilitate the implementation of lean practices in companies, which help achieve the sustainability strategy (Bortolotti, Boscari, and Danese 183; Engert and Baumgartner 829).    

Organizational Structure

Organizational structure is critical in the successful implementation of corporate sustainability strategies. Coherence between organizational structure and corporate sustainability strategies was imperative at the strategy implementation stage. The strategic fit between the structure of an organization and its processes and strategies helped frontal the conflicts emanating from ineffective communication between the department heads (Engert and Baumgartner 829; Kaiser, El Arbi, and Ahlemann 128).

Conclusion

This exercise was beneficial in helping me understand the different aspects of corporate strategy and the relationship between strategy formulation and implementation. Using the explanations of concepts found in the book; Strategic Management and Business Policy, I was able to gather peer-reviewed articles that provided a real-life perspective. The article titled, “Corporate sustainability strategy–bridging the gap between formulation and implementation” put together the concepts that related to the successful implementation of a corporate sustainability strategy in the automotive industry, which was under increasing pressure to reduce its carbon footprint.

Works cited

Bedford, David S. “Management control systems across different modes of innovation: Implications for firm performance.” Management Accounting Research 28 (2015): 12-30.

Bortolotti, Thomas, Stefania Boscari, and Pamela Danese. “Successful lean implementation: Organizational culture and soft lean practices.” International Journal of Production Economics 160 (2015): 182-201.

Cloutier, Omer, Laura Felusiak, Calvin Hill, and Enda Jean Pemberton-Jones. “The Importance of Developing Strategies for Employee Retention.” Journal of Leadership, Accountability & Ethics 12.2 (2015): 119-129.

Engert, Sabrina, and Rupert J. Baumgartner. “Corporate sustainability strategy–bridging the gap between formulation and implementation.” Journal of Cleaner Production 113 (2016): 822-834.

Jabbar, Ali Abdulridha, and Ali Mohammed Hussein. “The role of leadership in strategic management.” International Journal of Research-Granthaalayah 5.5 (2017): 99-106.

Kaiser, Michael G., Fedi El Arbi, and Frederik Ahlemann. “Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment.” International Journal of Project Management 33.1 (2015): 126-139.

Kernbach, Sebastian, Martin J. Eppler, and Sabrina Bresciani. “The use of visualization in the communication of business strategies: An experimental evaluation.” International Journal of Business Communication 52.2 (2015): 164-187.

Wheelen, Thomas L. J. David Hunger, Alan N. Hoffman, and Charles E. Bamford. Strategic management and business policy. Boston, MA: Pearson, 2017.