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
