Strategy in Action and Contemporary Issues in Strategic Management Essay

Pages: 10 (3557 words)  ·  Bibliography Sources: 15  ·  File: .docx  ·  Level: Master's  ·  Topic: Business - Management

Strategy in Action and Contemporary Issues in Strategic Management

Overview of LG Corporation

LG Corporation's strategic planning process

Change management

The concept of strategy-in-action

The implications of strategy-in-action

Enhancement of LG's strategic capability by influencing the strategy in action

First Phase. Common understanding

Second Phase: LG's strategic intent

Third Phase .Success indicators

Fourth Phase: Supporting the strategic objective

Fifth Phase. Strong leadership

Sixth Phase. The Catalytic actions

Seventh Phase: Sustenance of momentum

Why the traditional approach will always reign over the strategy-in-action approach at LG

The Myths that surround the traditional approach

Bias of reification (reification fallacy)

Bias due to control

Bias due to linearity

Business related bias

Role of leadership and employees in strategic planning process

Conclusion

Abstract

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In this paper, we develop a position paper for the purpose of enhancing LG Corporation's strategic capability by means of an effective strategy-in-action. We then evaluate the corporation's strategic planning processes and then suggest any necessary improvements with proper justifications. We then justify why strategy-in-action would not best suit LG corporation when compared to the traditional approach.

Overview of LG Corporation

TOPIC: Essay on Strategy in Action and Contemporary Issues in Strategic Management Assignment

LG Electronics Inc. was founded in 1958 and has its headquarters in Seoul, South Korea. The corporation produces electronics, telecommunication and chemical products and has subsidiaries; LG Electronics, LG Telecom, LG Display and LG Chem. The company operates in over eighty countries. The Corporation was founded by Koo in-Hwoi when he established Lak-Hui Chemical Industrial Corp in the year 1947. In the year, 1952, Lak-Hui (currently called LG Chem) which is pronounced "Lucky" became the pioneer Korean company to enter the business of plastics. After some time, the company expanded to form GoldStar Co., Ltd. (in 1958) which is currently referred to as LG Electronics (Tracked,2011). The GoldStar subsidiary was responsible for the production of the first radio in South Korea. In 1995, the corporation in its attempt to compete well in the global and western market got renamed to "LG" which is an abbreviated form of "Lucky Goldstar." Since 2009, the company has associated the letters LG with a catchy tagline that says "Life's good."

LG Corporation's strategic planning process

Strategy is defined as the process of determining the fundamental long-term goals as well as objectives of a given enterprise. This is coupled with the adoption of the appropriate courses of action and allocation of the necessary resources integral for realizing the stated goals (Chandler, 1962).The strategic plan that has been laid down by LG entails the adoption of a series of moves that would see the corporation being among the five best and most sort after electronics brands in Middle East and Africa. Their vision is to venture into totally new marketplaces and proceed to win the hearts of the consumers by providing them with what they need. They are focused in conquering new markets that are promising but unexplored (neglected).Such markets include Algeria, Angola and Sudan among others. Their plan is to use a new marketing strategy which replaces traditional dealers with power retailers who are increasingly commanding more market share just like for Carrefour

Change management

Change management is one of the key issues that must be handled by every company in order to remain profitable. This is through the employment of a productive workforce irrespective of the changes in organization dynamics. The process of implementing change is never an easy one. It is however necessary. The employees of a given company are usually comfortable with a particular way of doing things as it makes their job easier by repetition. This therefore means that companies such as LG must be involved in active change management processes that must be part of their strategic planning. Change management must be encapsulated in their strategy-in-action plans. The change management at LG should be carried out using Kotter's (1996) techniques. The change is to be implemented at LG using Kotter's 8-step model of change as a result of its demonstrated success.

The concept of strategy-in-action

Several organizations do have some sort of a strategy. Despite this, most of them do fail. This is as a result of the strategies being implemented improperly as a result of a missing framework. The framework of which is an architecture that is integral for the process of strategy conception up to the point when the strategy is implemented and the achievement of its sustainability. The concept of implementation as opposed to that of strategy design is not so present in the various extant strategy literatures. There is an element of dichotomy in this domain. The various articles that deal with leadership do lack strategy implementation moves. He work of Bartlet and Ghosalt (1994) have however come close to the subject of discussion. Their effort is however not on strategy implementation but is on the management of change. It is worth noting that most of the literature on effectiveness and strategy do ignore the element of human factor. An exception which is rather valiant is noted in the work of Hamel (1996) which does provide the right principles but with the lack of a process and model. What lacks in the approach used by most corporations such as LG is an approach that can be used to bridge the gap that exists between the formulation of the strategy and the implementation of the strategy. The methodology that is appropriate for bridging this gap is strategy-in-action which has been praised as the most systematic and scientific approach which helps in the formulation of comprehensive strategies.

The implications of strategy-in-action

The traditional approaches to organizational strategy are still dominant in the contemporary business environment. They are however not sufficient in the complex and dynamic global marketplace. There has been a major paradigm shift in terms of management and formulation of corporate strategies. The 21st century has seen ideological and geopolitical issues receding into the dark while issues related to humans have taken top priority. The current business leaders need to adopt a more advanced method of empowerment. This is where the concept of strategy-in-action comes in handy. Since it can be used for effective change management and the maintenance of corporate culture in order to increase productivity

Some companies however blend both aspects of traditional and traditional to organizational strategy in order to encourage systemic innovation (Innovation Point, 2004).

Enhancement of LG's strategic capability by influencing the strategy in action

The strategy in action that is to be used in influencing LG's strategy-in-action is to involve activities that influence the whole of LG's organization structure. It is to involve all the seven phases of strategy in action

Fig 1: Strategy in action pyramids

Sustenance momentum

Catalytic action

Strong leadership

Supporting the strategic objective

Indicators of sucess

Time Time

Work on strategic intent

Common understanding

Source: Zweifel and Tapas (1999)

First Phase. Common understanding

LG Corporation should strive to ensure that a shared and common understanding percolates through its organization structure. The strategy-in-action process basically commences with a group of about fifteen to twenty five leaders and thinkers who are the major stakeholders from all the relevant organizational sectors who come together in order to arrive at a shared understanding of the present situation. They too have the key elements that must be addressed by the strategy. The stakeholders should not comprise of only the top management but also the middle level management who are selected front-line individuals who may include board members, shareholders, and representatives of suppliers as well as customers. The selected group must be small enough in order to be effective and intimate while being large enough to ensure that all of the relevant views are included. It is important that the people who are often ignored by the top management be the one who attend these sessions for strategic analysis. Prior to the commencement of the initial strategic session, it is important that an elaborate background paper is drafted by and independent expert in order to maximize its objectivity. The purpose of the background paper is the establishment of main issues that are relevant to the process of establishing a common understanding. The main purpose of the first session is to serve the work of protecting the results that are obtained for the purpose of protecting business-as-usual as well reveal the elements that are missing, the opportunities and obstacles for convergence and synergy. The LG union and the management should spend a couple of weeks in the formal discussion of the existing competitive landscape and the contemporary business environment. The other thing that should be discussed is the need to have the front-line workforce to develop top notch competencies and be empowered to handle the problems. The professionalism of the workforce should be evaluated at this stage.

The most important thing in this phase is that all the participants should listen and learn a lot prior to jumping to a conclusion. The employees must also be very careful about their beliefs as well as biases. Therefore, a shared understanding is crucial and must therefore be created in a continuous basis. This is because the… [END OF PREVIEW] . . . READ MORE

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