Strategic challenges of the 21st Century

Introduction

This module describes ?what is strategy? and ?what kind of strategic challenges can be faced by the organisation in the next century? by the impact of globalisation. The module of ?Strategic Challenges? consisted of 10 weeks time. During these sessions, I will be able to understand the strategy and its positive implementation and how to plan a strategic plan. The different seminar and presentations helped me in the development of personality. It also gave me direction to explain my ideas to other people. I have learnt a lot during this time. It will also help in my future.

The first part of my module deals about ?what is strategy??. Strategy basically deals with three basic questions and it applies to get the answer of these questions. The three questions are ?where are we today??, ?where we want to go in future??, and ?how we can go there??. Strategy basically makes a bridge among these questions. Initially, strategy is related with or derives form the military vocabulary as term or tool. Than I explain the modern view of the strategy. I explain the concept of ?Globalisation? with its demands and complications. I also describe the impact of globalisation on the business.

The last session of this model is about indicating the some ?Strategic Challenges? with the cope of globalisation impact, which would be faced by the organisations. The first challenge for the any organisation is to find out the complexity of the task and setting the vision of the organisation. Normally, strategy is designed by the top management and implemented by the operational management. In this model, I try to describe the every strategic challenge cope with schools of strategy by ?Mintzberg?. I have also included the different frameworks and diagrams of different authors. I have also included the different theories and concepts of other authors. All the challenges of the 21st century, I take form the Internet by the expert's strategic managers.

What is strategy?

There is no single, universally specific definition of strategy. Different authors, managers, and military leaders use this term differently; some include goals and objective as part of strategy while others make firm distinctions between them.

Initially strategies referred to a role (a general in command of an army). Later it came to mean 'the art of the general,? which is to say the psychological and behavioural skills with which he occupied the role. By the time Pericles (450 B.C) it came to mean managerial skill (administration, leadership, oration, and power). And by Alexander's time (330 B.C.) it referred to the skill of employing forces to overcome opposition and to create a unified system of global governance. (The strategy processes, 3rd. ed., by Henry Mintzberg 1996, p. 2).

The thought and vision of every human being is different to each other. Every human being has a specific vision in his life. He is very much optimistic about his goal. Than next step, how he can achieve it. What kind of way he should be adopted. Than he started to apply different tactics to meet his shake and satisfying his dominant nature. When he reached, he became a superior on others and occupied a certain position. Thought is known as planning. Tactics and objectives are known as strategy. The example that comes into my mind for understanding what strategy is, is a bridge. This is where you are, on one side, and this is where you want to go, on the other side. The bridge has to be rooted at both ends. It doesn't make much sense to talk about strategy, which is just how you get across the bridge from where you are to where you want to go, and have your proposals fit one side and not the other. Now that's a trivial kind of notion. If you have a strategy that orients nicely toward your goal, but which makes all sorts of wrong assumptions about where you are starting out, will get you nowhere fast. If you have a strategy that understands the present context well, and relates sensibly to its possibilities and has good recipes for moving rapidly forward, but which doesn't aim toward where you want to wind up, that might be worse than no strategy at all.

If we are examine the corporate strategies of the world's organisations. We will find the three basic kinds of strategies like as Parenting, Following and Rule breaking. The first strategy is concern with ?Parenting group?, this group of organisations like GM, FORD, IBM, GE, Motorola, NEC, Philips?.., all these organisations have tendency and responsible for inventing the new products throughout the world. Their main strategy is retain their customer and hold their market share with new and modified products. The second type of strategy is ?Following?. In this group, their main strategy is following the ?parenting group? inventions and produced the same goods and services which introduced by the parenting group. They get the benefit from the success and failure of the their products, example like as Toshiba, Nokia, Sony, Hitachi ??? The third type of strategy ?Rule Breaking? is used by those organisations, which are only involved in inventions and nothing else. Their main strategy is invention. These organisations sale their patents to other organisations of the world. The major examples of these organisations are Del Computer, 3M, Depot Chemicals, Philips etc. I think it is hard to say which kind of strategy is best. But in the global competition every organisation should have capacity to be best by all means,

Modern views on strategy

?The determinant of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. (Chandler-1962).

?The pattern of objectives, purposes, or goal and the major policies and plans for achieving these goals, stated In such a way to define what business the company is in or to be and the kind of company it is or is to be.? (Kenneth Andrews-1969)

The impact of Globalisation on Business

If developments at the level of the industry are tending to converge on worldwide basis the industry can be said to be globalising. In other words, from the perspective of competition the world needs to be treated as a single market. In this regard, the global industry ?is not merely a collection of domestic industries but series of linked domestic industries in which the rivals compete against each other on a truly world-wide basis? (Porter 1986).

If a movie makes by the any Hollywood actor, it means that they will sell it only in USA market but for the global market. In 1996, a movie ?Daylight? was a box office did in the home market, earning a modest $33m in North America, but also about the fact that it provide to be a successful export and earned $120m elsewhere. If you are Nolan Archibald, the CEO of Black & Decker, it means that, in reviewing your strategy for the North American power tools market, you look at the strategies of competitors such as Makita and Bosch not only in North America but also world-wide. If you are Ken Iverson, the chairman of Nucor Steel, it means that, when deciding on major capacity additions such as a new $700m mini-mill, you consider not only US locations but also foreign ones such as Brazil. As the above anecdotes suggest, the world is becoming a global village. The notion of an increasingly interconnected global economy poses a number of related questions: what is globalisation, what is driving globalisation, and what do these trends imply for companies and for managers. (By Vijay Govindaran Amos Tuck School OF Business Admin. 15 Feb 1999)

After the collapse of the former USSR, the process of ?Globalisation? accelerated as its main impediment ?Communism? in its way died its own death. It means demolish of the boundaries and make the ?One world?. Development in technology, satellite communications, and crisis of different countries has been shrinking the world. The phenomenon of globalisation is although not new but it always existed in different forms in the world. It brought more potential for organisations to grow and expand becomes almost unlimited. However, new competitors can suddenly appear any time, from anywhere. Managers who do not closely monitor changes in their global environment or fail to respond quickly to those changes are likely to find their organisation survival in doubt.

A major impact of globalisation will be on Branding & Marketing. Companies increasingly compete with each other on a global scale and find themselves having to communicate their products to a global audience. My intriguing area of study is how different companies are responding to the global marketing challenge. Heinz argues that in the next century ?we will increasingly see the development of a global consumer. Heinz has responded to the challenge by standardising all its tomato ketchup bottles, while re-branding the product, through a ?31m advertising campaign, to reflect its ?distinctive, laconic, cool personality?. However, not all companies view the global market in the same way. Amway, one of the world's largest direct-selling companies, argues that consumer in different companies have different needs, which makes global marketing extremely high-risk. Finding the right marketing mix requires finding the common ground between the geographical differences, which requires a detailed understanding of individual marketplace. A study of companies at the start of the third millennium would be incomplete without a look at e-commerce. Microsoft also appears in the guide, with look at the way e-commerce is starting to take over from traditional retailing method. Microsoft predicts that the shape of business will alter more in the next ten years then in the previous 50. It forecasts that the value of transactions completed over the Internet will exceed $3500 billion a year in five years time. These examples of different successful organisations in last century are providing a guideline for other managers to what kind of cognitive strategy they have made. (The Time)
To succeed in the international operating environment of the 21st century, global manager must be preparing his strategy more dynamic and broad way. They have to look the following framework on global forces. (The strategy processes, 3rd. ed., by Henry Mintzberg 1996, p.739).

Strategic challenge for 21st century

In the presence of above framework and effects of globalisation the following strategic challenges could be face by the managers in next century.

Managing across borders:

Recent changes in the international operating environment have forced companies to optimise efficiency, responsiveness, and learning simultaneously in their worldwide operations (Bartlett and Ghoshal, 1987).

Companies that previously concentrated on developing and managing one of these capabilities, this new challenge implies not only a total strategic reorientation but also a major change in organisational capability, as well. It kind of complex task for the any organisation to keep and balance all three objective in any circumstances. But it is just initial task, may be they have to face more complicated tasks while doing in global business. It will be very important for the administration to increase the effectiveness/efficiency of tasks not involved directly in the delivery of the product or service as well as internal perspectives. It can be possible for the parent company to keep and improve all these efficiency in his domestic product-market. But it will not be easy to counterbalance all these efficiencies in other unit, which located in the other part of world. The environmental, cultural, distance and language difference like issues can create a major complexity to keep balance these objectives.

We can link and demolish this complexity by applying the Learning and cognitive school of strategy (Mintzberg) introduced the psychology into the field of strategy. The cognitive school of strategy is emerge as description in terms of concepts, maps, schemas, and frames- that shape how people deal with inputs from the environment. The strategic management concerned with functionally specific tasks, any one of which is unlikely to imperil the organisation's future. Is the strategic management has competency to cope with challenges or not? The administration is essentially about the change managing, not concepts or ideas, but people. Tom peters tells us that good managers are doers. Michael Porter suggests that they are thinkers. Not so, argue Abraham Zalezinzik and Warren Bennis: good managers are really leaders. Yet, for the better part of this century, the classical writers- Henri Fayol and Lyndell Urwick, among others- keep telling us that good managers are essentially controllers.

The challenge of global building leadership, according to Gary Hamel and C. K. Prahalad, is to embed the ambitions for such leadership throughout the company and to create ?an obsession with winning? which will energise the collective action of all employees. The role is build in such an ambition, to help people develop faith in their own ability to deliver on though goals, to motivate them to do so, and to channel their energies into a step by step progression that they compare with ?running the marathon in 400-meter sprints?. I would like to recommend here, to start global business. Management should conduct and frame of their strategy and evaluate it either our HR skills can maintain the balance or not. I am also agreed on the view of Bartlett & Ghoshal, and management should pay more intention towards increasing the efficiencies.

Investment Generation

For the global operations, every organisation needs huge funds. Fund raising is not difficult task but difficulty starts when we have to return them. The interests- rate, taxes and government policies gobble up more than 60% of profit. The difference in exchange rates also affects on profit.

Most of organisation raised their funds by the ?Centralisation?. The complexity can be linked with the strategy of learning and designing/planning school of strategy by Mintzberg, The design school is a formation of a deliberate process of conscious thoughts like level of control, simplicity and formal and indicating the all possible risk factors. The planning school is conscious and control process of formal planning and decomposed the process in distinct steps by detailed execution of operation. Moreover on designing school, ?The end product of strategic decisions is deceptively simple; a combination of products and markets is selected for the firm. This combination is arrived at by addition of new products-markets, divestment from some old ones, and expansion of the present position. (Ansoff model 1965:12 from the rise & fall of strategy planning by Mintzberg 1994 p# 43)

The Ans. & Sterner model on design of new strategy is also emphasis on the current position of the organisation. The design of a strategy should be very much clear and decomposed into small steps and well define. The analysis of a strategy is evaluated by the concept of SWOT model. This model was initially discovered by the Philip Selznick's (1957). The SWOT model is stand for as strengths, weakness, opportunities and threats analysis of a design & planning strategy. The above global strategy framework (part 1) is also indicating about the position and resources of business and parent company.

In this challenge, I would like to give some suggestions. The short-term loans are not favourable for any long-term projects. They are some other ...

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