Management and Business Environment Essay
Rational analysis and objective decisions allows achieving long-run successes and avoid failures. The Evolutionary approach – more fatalistic approach, seeing the business environment as a jungle in which the main aim of an organization is to survive by being efficient. Business processes and competition between organizations are compared to the biological evolution processes. Rational long-term planning is irrelevant due to unpredictable business environment.
Only these organizations which are capable of fitting efficiently to the environment changes may have a chance to maximize theirs profit. The Processors approach – seeing the rational long-term planning as a futile processes, due to unforeseeable behavior of people and unpredictable business environment. Strategy emerges as a result of pragmatic processes of forecasting and learning. The optimal strategy is not known. The Systemic approach – believing that rational planning is useful, however it is embedded in social system.
This strategy perceptive believes that people and theirs behavior are foreseeable and can prepare the rational plan of action. However, the strategy objectives and practices are depended on the social system in which the strategy is carried out. The above generic perspectives of strategy differ fundamentally according to: the outcomes of strategy, the processes by which the strategy is made.
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The vertical axis measures the degree to which the strategy is profit minimization oriented or allows other more pluralistic strategy goals. The horizontal axis considers how formal is the processes of strategy formulation and development That Is how much the strategy Is a result of deliberate leaning or whether it emerges accidentally to fall behind with business environment changes. Fig. 1. Strategy perspectives Source: R. Whetting: What is strategy – and does it matter? Thomson Learning, London, 2001, p. 9 The Classical and Evolutionary approaches believe that profit minimization is the natural outcome of the strategy making. The strategy perspectives represented by outcomes of the strategy process. They believe that profit is not as much important, as there are other possible outcomes. These two pairs are completely different according to processes. The Evolutionary and Processors approaches see strategy as emerging from the situations that arise.