Good Strategy & Bad Strategy
The theory of business strategy revolves around game-theoretic tools into the study of business competition that helps a business carefully analyze a whole range of questions that are amenable to economic analysis (Shapiro, 1989). Many of the important aspects of strategic business behaviour are subjected to game-theoretic analysis. The theory of business strategy enables businesses to look closely at industry and understand the type of competition that prevails in it if the managers have to make any reliable predictions of industry behaviour and performance and how they are affected by an exogenous or structural change (Shapiro, 1989).
The basic idea of a strategy is the application of strength applied to the most promising opportunities. Successful implementation of a strategy in business involves having a strong coherent strategy to coordinate all the policies and actions and the creation of new strengths through subtle shifts in viewpoints (Rumelt, 2011). A good strategy is usually unexpected and involves discovering power. An organization’s chief without a successful plan can believe the plan is pointless. But more often the loss is due to poor strategy. (Rumelt, 2011). Leaders who are believed to use poor strategies have not selected incorrect objectives or made errors in practice, but instead misguided opinions of what strategy is and how it operates.
Good strategy arises because other organizations do not have one and they expect that the other organizations do not have one either. A successful strategy requires continuity, alignment of actions, strategies, and money to reach a meaningful result. Lots of companies may not provide that, most of the time. Alternatively, they have numerous objectives and programs symbolizing change, but they have no clear strategy for achieving the improvement other than “spend more and work harder.” (Rumelt, 2011)
Good strategies come from insight into new sources of strength and weakness. Looking at things from a different or fresh perspective can reveal new realms of advantage and opportunity as well as weaknesses and threats. (Rumelt, 2011)
Bad strategy is sometimes perceived to be the absence of a good strategy which is not the case. Bad strategy grows out of specific misconceptions and leadership dysfunctions. Bad strategy can be detected by the following major hallmarks (Rumelt, 2011) –
i. Fluff — Fluff is the superficial restatement of the obvious combined with a generous sprinkling of buzzwords. Fluff masquerades as expertise, thought, and analysis. (Rumelt, 2011)
ii. Failure to face challenges — A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge. If the challenge is not defined, it is difficult or impossible to assess the quality of the strategy. (Rumelt, 2011)
iii. Mistaking goals for strategy — Bad strategies often takes place when leaders mistake attaining their company or self-goal success as a strategy (Rumelt, 2011)
iv. Bad strategic objectives — Bad strategy occurs when the manager at top-level think of strategies as actions designed to accomplish specific goals for their subordinates and goals are then negotiated between them. (Rumelt, 2011)
REFERENCES
· Shapiro, C., 1989. The theory of Business Strategy. RAND journal of economics, 20(1).
· Rumelt, R., 2011. Bad Strategy. In: Good Strategy/Bad strategy — the difference and why it matters . London, Great Britain: Profile books limited, pp. 32–50.
