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Development of an agile business strategy in an uncertain market environment von Mutzel, Hans-Peter (eBook)

  • Erscheinungsdatum: 07.01.2015
  • Verlag: GRIN Verlag
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Development of an agile business strategy in an uncertain market environment

Master's Thesis from the year 2014 in the subject Business economics - Business Management, Corporate Governance, grade: 1, Donau-Universität Krems (Faculty of Business and Globalization; Department for Management and Economics), course: Danube Professional MBA; Area of Concentration: Strategic Management & Organizational Change, language: English, abstract: Strategic decision-making is a key task for every senior manager of any sized company. Strategic decisions are characterized by highly uncertain conditions. Managing this uncertainty and anticipating the future, is seen as key to success and the measure for being a successful manager. In the opposite direction, if firms fail to anticipate how the future will be, it is then often called 'bad luck'. However, if 'failing to anticipate the future' were correlated with bad luck, this would mean that 'anticipating the future right' should be directly linked with good luck. However, good luck is often ignored and seen as excellent management performance instead. To reduce the influence of luck, this master thesis deals with the different approaches on strategy-formation and decision-making, to identify to what extent they differ in their methodology on how they manage the uncertainty and how they try to get control over the future. The aim is to identify best practice approaches that should lead to better performance on reduced risk and cost.

Produktinformationen

    Format: ePUB
    Kopierschutz: AdobeDRM
    Seitenzahl: 118
    Erscheinungsdatum: 07.01.2015
    Sprache: Englisch
    ISBN: 9783656870579
    Verlag: GRIN Verlag
    Serie: Akademische Schriftenreihe Bd.V286607
    Größe: 2017kBytes
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Development of an agile business strategy in an uncertain market environment

2. Literature review and the general term definition

One of the major differences between causal and effectual strategy formation methods is the view, how an organization can manage its future. The more traditional causal view is to be able to control the future, you need to predict the uncertainty of the future, while the effectual approach says that if you are able to control the future, then there is no need to predict the uncertain future (Sarasvathy, 2008).

To align the understanding on how the different terms are used in this master thesis, the literature review starts with the definition of the relevant terms.

2.1 General Term Definition

2.1.1 Strategy

The term strategy has its origin from the field of military and was related to managing conflicts and winning battles. The literature can be traced back to ca. 500 B.C. when the Chinese philosopher and military general Sun Tzu wrote his book the Art of war (Sun Tzu & translated by Sawyer, Ralph 1994). It is one of the most popular study of strategy ever written and has had a huge influence on the history of warfare. His developed strategy principles influenced great Asian war leaders as Mao Tse-tung, Giap, and Yamamoto but also western warlords form Napoleon, the German Generals in World War II until the recent wars in the gulf area. However, the principles of Sun Tzu found their way also into the modern business environment. Many Asian companies make this book a required reading for key executives and also many Western businesspeople are using it for inspiration and advise to manoeuvre companies through competitive situations of all kinds (Sun Tzu & translated by Sawyer, Ralph 1994).

In the business context, strategy is seen as the link between the firm and its environment and as the determination of long-run goals and objectives and adoption of action and allocation of resources (Chandler 1962; Grant 2010)..

Figure 1: Strategy as a link between the firm and its environment; adapted from Grant (2010)

A further popular view of business strategy was set by Henry Mintzberg. He defined strategy as a pattern on sequentially decisions. In his view, a strategy is in a constant move from an intended or planned strategy to the final realized strategy. On the move, the final realized strategy is influenced by deliberate strategies and emergent strategies. The part of the original strategy plan, which was not executed is called the unrealized strategy (Mintzberg et al. 1998).

Figure 2: Pattern of strategic decisions, adapted from Mintzberg (1998)

But what makes strategy finally "strategic? Every day executives must make a variety of decisions. Most of them will respond to daily routine issues, while some of them will have the potential to affect the organization fundamentally. Such critical decision are characterized by three elements; Strategic decisions are important, they come along with allocation of significant resources and they usually involve more than one department (Duhaime, Irene et al. 2012).

2.1.2 The market and competitive space

A huge portion of the strategy literature is about markets; mainly whether they already exist is the first challenge. The traditional description of markets has been a physical place where buyers and sellers came together to exchange goods for other goods or money. Therefore, the markets have been divided into three categories: demand, supply and institutions. Hence, people who are willing and are able to pay for a product or service characterize demand. People who are willing and are able to supply a product or service at a price people are willing to pay characterize supply. Third, inst

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