Monday, 1 April 2013

Improve Performance of Business by Using Better Business Strategy

We can define the strategy as a result of decisions and actions in the service of politics. It is defined at the global level (corporate strategy) but also at the functional level. It aims to seek and obtain a distinctive competence (sometimes called differential expertise), source of competitive advantage and ensure the competitiveness and profitability of the company over the long term. This involves understanding the environment to alter the competitive balance to his advantage.

The Business Strategy strategic decision is often irreversible and involves structural changes. These decisions can engage the company in the long-term strategy is the management of uncertainty.

The strategy should be analyzed as a complex decision process that incorporates organizational dimensions (internal) and environmental (external). Strategic decision is of bounded rationality (search for a satisfactory solution rather than optimal) and whose relevance can be assessed.

The strategic approach includes strategic analysis (diagnosis and strategic segmentation), the strategy formulation (strategic choices), implementation (planning) and strategic management (control, mobilization of human resources). It must therefore take into account the different parameters of the environment, the company and the internal and external stakeholders:

Depending on the circumstances and modes of governance, we distinguish:

  • A contingency approach (strategy possible).
  • A proactive approach (strategy desired).
  • A holistic approach: seeking a balanced process.

The formulation of a strategy involves three levels of reflection and action:

  • Completion: Define business (know-how of the company), missions (response to market expectations) goals (qualitative expression of the purpose, be a leader, for example).
  • Operationalization: Setting objectives (quantified expression of a goal, market share, for example). Adopting a series of actions.
  • The Media: Fix resource allocation to achieve the objectives.

Every company is more or less guided by a policy or not explained by the group leader. It is the result of motivation, training and cultural leaders.

The policy is defined as a set of guiding principles and main rules and standards that guide ongoing action.
The policy is required to strategy setting his goals, constraints and criteria to be met

In reality, the policy is a mixture of rules and standards. This is the way to act and to conduct a case it specifies the objectives to contribute to the sustainability of the company and its goals and carries out the coordination of different functions. It is often formalized in charters of companies.

Policy and Governance: The concept of policy refers to the corporate governance (corporate governance) often mentioned in the companies in which the managerial powers of ownership and management are separated. In parallel to the increase dimensional firms, the owners were gradually excluded from the effective management of the business for the benefit of managers. It now makes a distinction between the power of managers and controlling shareholders owning the dominant decision-making center is no longer systematically owner. Managing a business requires a specific skills side, the other significant amounts of capital. Managers therefore assume management while shareholders have property rights and vote.

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