Table of Contents
Definition
Organisational strategy is defined as a dynamic roadmap that explains how a company needs to evolve so that it can meet its goal and vision. It is a plan that describes how to allocate resources and support various business activities like inventory, marketing, production, and infrastructure.
Organisational strategy is a detailed assessment of the things that need to be completed to achieve organisational objectives. Without a useful and well-defined organisational plan in place, it will prove very difficult for a business entity to set milestones and reach its target goals.
Meaning of organisational strategy
Are you on the verge of starting a new business or are you an entrepreneur who is trying to make some functional changes in the organisation to boost the overall growth? Whatever the case, it is imperative to create an organisational strategy as it will help and direct you at every crucial time. The plan is the total of the actions that will be taken over a defined period to achieve long-term goals.
The starting point of the organisational strategy is the mission of the company and the reason why the business has been created. All the actions are relevant to that purpose, and the corporate strategy should be a guiding force to achieve that purpose at all costs. It assists every stakeholder to stick to the plan and walk together.
Understanding organisational strategy
A business needs to grow to thrive and survive in these competitive times. It means capturing a significant chunk of the market, increasing your customer base, boosting your sales figures, adding new products or services to your current list and giving the rival companies a good fight. A business entity needs a well-defined plan that will assist the company in following a path and moving in the right direction to achieve these things.
This is why every business has to develop an organisational strategy. It includes comparing the situation in the present state to the targeted nation and then defining the differences. This will help to know what is required so that the desired changes can take place. Organisational strategy refers to the long-term goals of the business entity so that the business can have the necessary time to evolve in the given period.
It is a fact that most of the organisational strategies look good on paper. The problem lies in executing the plans successfully. This is why companies emphasize finding out what is working and what is not by reviewing them at regular intervals.
This helps them to make adjustments to get back on track if they have deviated from the path. Remember organisational strategy starts with a clear understanding of where a business is and where it wants to go. The plans are for the twists and turn on the road that you will encounter on the way.
Categories of organisational strategy
The types of organisational strategy are as follows
1. Corporate level strategy
The corporate-level strategies are broad in scope, intricate in design and geared for achieving the goals of your business by moving towards the destination the business entity wants to go. It includes
- Profit
- Diversification
- Liquidation
- Turnaround
- Investigation
- No change
- Concentration
2. Functional level strategy
The functional level strategy deals with a particular action plan that is allotted to individuals and departments that assist the business in moving towards the goals that have been created by the corporate level strategy. The strategies at this level are detailed in nature.
3. Business level strategy
The business-level strategy is an integration of corporate and functional level strategies. It includes
- Rebrand
- Broaden exposure
- Investigating new markets
- Increasing marketing budget
Features of organisational strategy
The essential features of an organisational strategy are as follows-
1. Organisational strategy is measurable
A necessary feature of the organisational strategy is that it is measurable. It is easy to say that you have created an effective plan, but who is going to decide whether it is feasible or not.
If the organisational strategy is measurable, then the business has a way to be on track and keep on measuring its performances at regular intervals.
2. Organisational strategy is specific
Make sure that the organisational strategy is as particular as possible. Some people have the habit of creating a plan that encompasses lots of things. This is haphazard and creates confusion. Being specific will help in saving time and effort so that it will become possible to make quick decisions
3. Organisational strategy is realistic
The person who is entrusted with creating an organisational strategy must know about the business inside out. Realistic goals will take you forward, whereas if you try to fly without wings, then things will come crashing down.
If a business is manufacturing 1000 units of scooter every month, you cannot just expect it to double its production without any rhyme or reason. Thinking big is good, but you should have the necessary resources at hand to make your dreams come true.
This is why an essential feature of an organisational strategy is to be realistic and set smaller and feasible goals.
4. Organisational strategy is limited
One of the critical features of an organisational strategy is that it should be limited and not open-ended. Every activity needs a deadline, and similar is the case with the corporate strategy. You cannot make a plan that will go on for an indefinite period. Give yourself a realistic deadline, for instance, four years and then make the plan.
When the businesses and the employees, have a deadline to meet, they will work at a better speed to reach there in time. This is an essential feature of the strategy and should be followed at all costs.
Why does a business need an organisational strategy?
A business entity needs an organisational strategy because of the following reasons-
1. Provide a direction
Every business organisation needs a direction and a plan to move on that track. There are so many routes that you can take, but it is not feasible to walk on them at the same time, and this is where an organisational strategy proves a blessing in disguise. It nudges us towards the right path and saves ample time. Moreover, it avoids unnecessary disasters on the way.
2. Sets priorities
An essential reason for a business entity to have an effective organisational strategy is that it helps to set the preferences. From a business point of view, every work is essential but it is not possible to do them at the same time.
The organisational strategy helps in determining which activities are more important than the others so that you can complete them at first. This way, you will not miss out on essential opportunities and help in the growth and development of the business in the long term.
3. Proper alignment
Once the business picks up speed, it will have to hire various people for different job profiles. A business organisation has numerous departments and people in multiple positions working together. An organisational strategy aligns the goals and objectives of the people and the departments they are working with those of the business entity.
This helps everyone to have a common goal and walk on the same path so that they can ultimately reach the end target. It is a fact that the organisational strategy will align marketing, administration, manufacturing, operations and sales team so that they can work together for the benefit of the organisation.
4. Start saying no
It is essential to say no to things that are not important at that moment in time. It can be a new idea or potential initiatives that are not required in that phase. An organisational strategy helps to understand things that are not important so that you can start saying no to them.
5. Decision-making
Decision-making is one of the most important aspects of a business entity. If it has an organisational strategy in place, then it will work as a helping hand by offering clarity in thoughts.
This will minimize the number of decisions you have to face so that decision-making becomes a simple and easy process.
6. Helps to adapt
Change is imminent, and the business must always be ready to face it at all times. There will also be hurdles and issues at every nook and corner, and a smart business person will take suitable action plans to face them admirably.
It is the organisational strategy that helps a business to adapt to changing situations and face issues at the drop of a hat. This is why business entities are always in favor of creating effective organisational strategies for their business entity.
Why does an organisational strategy fail?
Most business entities create an organisational strategy that will prove useful in the long-term. It is crafted to make strategic decisions. Despite good intentions, several organisational strategies fail to generate an impact. The reasons for the letdown are as follows-
- People fail to realize that thinking things through and effectively implementing them are two different things. You need a good team for both the stages and their thought-process must be aligned so that whatever is written on paper is executed precisely and admirably. In case both sides are having a difference in opinion and are unable to sort it out at the onset then the organisational strategy is doomed for failure
- If an organization is not paying attention to the best possible means of executing the organisational strategy, then it will not happen as you have desired it and in that case, failure is a possibility
- Lack of understanding about the capabilities of the team, individual and even organisation can be an essential reason for organisational failure
- If there is a lack of control and planning in the project the organisational strategy will fail to work
- Under budgeting and poor financial deals as well as poor decisions is a reason why the organisational strategy will fail even if it is excellent
- A business should be aware of the minimum as well as the maximum time that will be needed to complete a task or a process. If the supposed time for completing them is supposedly one month and you drastically reduce it to fifteen days, then inadequate time allocation will be a reason for the failure of organisational strategy; however useful it is.
- If the business has created one of the best organisational strategies with the help of experts, but it lacks sufficient assets and resources to implement the plan, then the chances of failure are very high.
Liked this post? Check out the complete series on Management
