Strategic management principles and practice

Strategic Management

The concept of strategic entrepreneurship does not suggest that all three types of innovative activity must be employed. Competitive advantage can be derived from excellence in any of the three. Although the three are not mutually exclusive, it is often difficult for a firm to specialize in each, as they are all different from one another. Within a large corporation, all three may be utilized simultaneously for different aspects of the business. For a startup, it is reasonable that the company become expert in one area in order to develop a niche for itself. The circumstances of the company and the market should dictate the type of innovative activity on which the firm focuses.

Organizational structure and controls are critical to the firm's strategies. There is a direct correlation between firm performance and the degree to which structures and controls support the firm's strategy. Organizational structure, for example, denotes the lines of responsibility -- who does what and when. It is the structure, then, that allows the firm to implement its strategy. The strategy itself is a set of objectives and a broad implementation structure. If the organizational structure is not congruent with the methods of implementing the strategy, it will be more difficult for the firm to make their strategy work. Likewise, controls are important to the execution of strategy. They guide the use of strategy. Controls allow management to measure actual results against desired results. This allows management to make adjustments to implementation and execution in order to bring the firm's performance back in line with the performance expected from the strategy. Controls can also indicate to the firm deficiencies in the strategy. This allows management to revisit elements of strategy and make adjustments so that the firm can continue to meet its objectives.

3) Whether or not I would encourage an entrepreneurial mindset would depend on the type of business I had. Many firms require constant innovation to excel, others do not. Internal innovation can drive business forward, but this does not need to come from the entire company. If the business is one that is well established the preference may be for incremental innovation, in which case the entire firm need not be engaged. However, if the firm requires radical innovation in order to flourish then in that case I would encourage an entrepreneurial mindset in order to engage the entire workforce in this vital activity.