Tailoring corporate strategy to financial performance – How to do it right - The HR Director Magazine

ersamoyor.blogspot.com

This article summarizes my experience of working with a team of top-level management consultants in the US. Executives consider four strategies, including analysis, pro-activeness, defensiveness and futurity. Analysis strategy is regarded as the tendency to search for problems and their root causes, and generates better alternatives to solve them. When executives analyze strategy, they can create more knowledge and find the best solution using a problematic search of various options. This strategy stimulates companies to apply information systems in their decision-making processes in order to investigate various alternatives and options. Also, executives analyze strategic milestones to meet the goals of employee development. Analysis strategy can develop opportunities for assessing current situations in details. This provides new and more innovative solutions for organizational problems as they arise. Therefore, an analysis strategy can play a critical role in improving organization’s decision making processes. Analysis strategy has major effects on financial performance through focusing on analytical decision making process which can potentially increase sales and profitability for companies.  To develop analysis strategy, executives can particularly contribute to the development of a workplace in which there is/are:

1. Emphasis on the effective coordination among different functional areas.
2. Extensive use of information systems to support decision making.
3. Comprehensive analysis undertaken when confronted with an important decision.
4. Use of planning techniques.
5. Effective deployment of management information and control systems.
6. Use of manpower planning and performance appraisal of senior managers.

Pro-activeness is a strategy used by executives who take a proactive approach to search for better positions in the business environment. As executives use the pro-activeness strategy which refers to finding new opportunities and proactively responding to current challenges in external environments, they can enhance their span of control. In fact, a pro-activeness strategy can provide a higher degree of sales and profitability through developing interactions with external environments. As executives seek smart ways for investments, they require a continuous investigation from external business environments. Pro-activeness strategy is critical to improve financial performance. In fact, since pro-activeness manifests itself in behaviors such as continuously exploring the emerging opportunities to invest, this strategy can positively contribute to the efficiency of companies through helping them to find better opportunities for investment that potentially leads to better financial performance in terms of return on investment (ROI) and profitability. To cultivate a pro-activeness strategy, executives can contribute to the development of a workplace in which there is/are:

1. Constant search for new opportunities.
2. Attempt to introduce new brands or products in the market.
3. Constant search for businesses that can be acquired.
4. More effective expansion of capacities when compared to our competitors.
5. Strategic elimination of those operations that are no longer profitable in later stages of life cycles.

Defensiveness recommends undertaking defensive behaviors that manifest themselves in enhancing efficiency and in cutting costs while maintaining continuous budget-analysis and break-even points. Executives take an offensive approach and in this case they employ a defensive strategy. This strategy utilizes modifications in order to efficiently and effectively use organizational resources, decrease costs, and control operational risk. Some executives feel that a defensive strategy, while necessary, sets a negative connotation on their span of control. A defensiveness strategic approach, in fact, enhances efficiency through cutting costs. This kind of strategy also enhances profitability, which enhances efficiency for companies. To foster defensiveness strategy, executives can particularly contribute to the development of a workplace in which there is/are:

1. Regular modifications to the manufacturing/service technology.
2. Use cost control systems for monitoring performance.
3. Use of current management techniques to ensure that we move smoothly at the required level.
4. Emphasis on product/service quality through the use of work improvement teams.

Futurity is reflected in the degree to which the strategic decision-making process takes a two way approach—-an emphasis on both long-term effectiveness and shorter-term efficiency concurrently.  Executives use futurity strategy to expand the growth opportunities available to companies to close the gap between success and failure. Futurity strategy can increase sales and profitability by conducting “what-if” analysis and effectively allocating organizational resources. Futurity strategy implements basic studies to identify and actively respond to the changes occurred in the external environment and provides better outcomes and more profitability. My experience says that futurity strategy has a positive association with sales and profitability. And executives across the globe should consider the critical role of this strategy in improving sales and profitability for companies. To create a futurity strategy, consultants can contribute to the development of a workplace in which there is/are:

1. Specific criteria used for resource allocation which generally reflect short-term considerations.
2. Emphasis on basic research to provide us with a competitive edge for the future.
3. Key indicators of operations forecasted.
4. Formal tracking of significant and general trends.
5. Regular analyses of critical issues.

Therefore, financial performance is dependent upon how executives formulate their strategies. Executives can now see how they can cultivate effective strategies that can enable companies to achieve business objectives, provide better outcomes, more sales and profitability and satisfying careers.

Adblock test (Why?)

"strategy" - Google News
August 20, 2021 at 05:23PM
https://ift.tt/3giZUBo

Tailoring corporate strategy to financial performance – How to do it right - The HR Director Magazine
"strategy" - Google News
https://ift.tt/2Ys7QbK
https://ift.tt/2zRd1Yo

Bagikan Berita Ini