Four-Cycle Approach to Strategic Management
Decisions are made from developing and analyzing alternatives and making a choice. Through a series of decisions or choices, executives can define, develop plans, goals and objectives, and set a desired course for the future of an organization. In the article, A four-cycle approach to strategy development and implementation, by William Finnie, strategy is defined as the management of change or adaptation of external circumstances and the creation of a desired future. Every organization has some kind of strategy in place, but through the development of an effectively implemented strategic plan a company can more readily meet the requirements of it customers. The four cycles that Finnie describes are strategy development, management review of changes and finalization of strategies and objectives, functional goals and action plans, and budgeting and resource allocation. In the first step of the cycle, strategy development, an organization would perform situation analysis, define the business, identify objectives, develop a generic strategy, establish customer-oriented strategies, and establish competitor-oriented strategies. From these steps, a basic strategy is developed.
y would review its environment or the external factors that would affect the business. In the text, Dessler discusses development of strategic plans. The principles consist of defining a clear objective, preparing defensive operations, definition of authority and responsibility, amassing the workforce and allocating them by areas of importance, and continuous innovation. It is also important for an organization to continuously consider the external threats and opportunities provided by its competitors and its customers. A company can best define customer strategies through customer surveys to aid in identifying customer requirements. Once implemented, the second cycle, management review of strategies and objectives should take place annually to ensure their effectiveness and redefine if necessary. Management will then define a strategic objective of the company's long-terms goals in areas of quality or customer satisfaction and market share. However, the process does not stop there; it must be an ongoing process of development, implementation, and review. The final step between the development and implementation of the strategies is the mission statement. Management must spend time researching, discussing and determining the current and future plans of the organization and develop a clear strategy for the achievement of those plans. Using the surveys will also help identify an organization's strengths and weaknesses. Finnie describes a generic strategy as "a broad strategic approach to creating a defensible position in the industry - identifying a competitive advantage". The previous ownership did not develop the organization under the premise that it would grow. While their plans and strategies indicated the intent to grow and gain a greater market share, they didn't plan for the resources required to cover the growth or steps necessary to improve processes. Cycle four consists of budgeting and resource allocation.
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