Analytical Approach to Strategic Management - Strategic Management

A second approach might be for one person in the organisation to undertake the study – the chief executive personally, or the planner, or some other appropriate person. On an individual basis, the ability of any one person to probe deeply is limited by the size and complexity of the group: a vast multinational giant would have to decentralise its approach if it were ever to finish. The third approach uses a series of teams on a part-time basis, led by – depending on size – a number of people who had been allocated full-time to the appraisal, with all the work being coordinated and controlled by one person method has the merit that it really works and, provided the coordinator gets the teams working in the right areas and seeking answers to the right questions, it goes a long way to ensuring that the results are objective and emotionally detached. A number of basic concepts should be carried in mind as the appraisal progresses, and performance rated against these.

  1. It should always be assumed that there might be a better way of doing anything until the contrary is proved.
  2. It is usually a relatively small amount of effort which produces most of the return. Actual figures will vary, but will generally prove that a large amount of profit, say 80 per cent, comes from, say, 20 per cent of effort. The remaining 20 per cent of profit comes from 80 per cent of effort. Unfortunately, it is rarely possible to be specific about the exact point when effort could profitably be curtailed, although any action which reduces the amount of less profitable action should lead to corporate improvement.
  3. Often knowledge of what is being done is not as perfect as managers within a company believe. One of the tasks of the corporate appraisal should be to ascertain the facts. This can often be a very difficult exercise. Incorrect answers are often supplied to the investigators’ questions out of ignorance, and in good faith.
  4. When what is being done has been established, the question Why? should be asked.
  5. The future is more important than the present, where the trends and effects on the aspects studied can be foreseen.
  6. The appraisal should cover all aspects of the company.

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