Dynamic Strategy - Qualitative - AN INVESTIGATION ON THE STRATEGY FORMULATION PROCESS WITHIN THE ROMANIAN COMPANIES

The article tries to find out the effects of strategy formulation process in companies in Romania. The authors give some definitions of strategic management.  One of them, which I found really interesting, comes from Ohmae (1982) who argues that strategic management is the “pursuit of superior performance by using a strategy that ensures a better or stronger matching of corporate strengths to customer needs than is provided by competitors” (Ohmae, 1982: 91).

The authors then analyze the steps that constitute the strategic management process. These are:

       1.      analysis of the external and internal environment;

       2.      strategy formulation;

       3.      strategy implementation and

       4.      strategy evaluation

(Borza et al.,2008)

The authors provide some information about the factors that influence strategy formulation and talk about strategic objectives, decisions, and policies. They also refer the two models of strategic formulation. The objective and the cognitive model.

The authors conduct a research in 35 companies in order to find what managers think about strategic formulation process. In this research the questionnaire had two sections: one with factual questions and one about different elements of the formulation phase of the strategy.

One significant finding of the research was that 74% of the companies had a vision and 74% of those had revised their vision this year. That’s really interesting as it shows that most of the managers recognize the importance of having a current vision for their company. Another interesting finding was that 71% of the managers had developed a strategy for their firm and 72% of them revised their strategy this year. However, only 54% of the companies had conducted a SWOT analysis. This low percentage shows that some of the firms have either copied their strategy from another firm or have come up with a strategy “based on intuition”. Either way, they have formulated a strategy that is not suitable for their firm.

The research also showed that managers pay too much attention on setting long term goals for their companies, as 89% of managers have already established long term goals. This result along with the fact that only 71% of the managers have established a strategy shows that some managers have long term goals without first setting a strategy for their company.  

In my opinion, the latter is the most important finding of the research. Managers try to setup long term goals without having an established strategy for their company. This is definitely a sign that those managers lack strategic management skills. The correct managerial strategy is to establish a strategy first and then try to set long or short term goals.

References

Ohmae, K., (1982). The mind of the strategist, McGraw-Hill, London.

Borza, A., Bordean, O., Dobocan, C., Mitra, C., (2008). Strategic management. Concepts and cases, Risoprint Publishing House, Cluj-Napoca.

Bordean, O., Borza, A., Rus, C., Mitra C., An investigation on the strategy formulation process within the Romanian companies