Download Effective strategies must be suitable, feasible, and

Effective strategies must be suitable, feasible, and acceptable to
stakeholders.
LEARNING OBJECTIVES [ edit ]
Apply the three criteria for strategic efficacy identified by Johnson, Scholes and Whittington
List the 11 forces that should be incorporated into strategic consideration as argued by Will
Mulcaster
KEY POINTS [ edit ]
Johnson, Scholes, and Whittington suggest evaluating strategicoptions based on three key
criteria: suitability, feasibility, and acceptability.
Suitability refers to the overall rationale of the strategy and its fit with the organization's mission.
Feasibility refers to whether or not the organization has the resources necessary to implement the
strategy.
Acceptability is concerned with stakeholder expectations and the expected outcomes of
implementing the strategy.
Will Mulcaster provides an additional 11 strategic forces which may impact the effectiveness of a
given strategy.
TERMS [ edit ]
effectiveness
The capability of producing a desired result.
strategy
A plan of action intended to accomplish a specific goal.
EXAMPLES [ edit ]
Give us feedback on this content: FULL TEXT [edit ]
Effectiveness is the capability to produce a
desired result. Strategy is
consideredeffectivewhen short-term and
long-term objectives are accomplished and
are in line with the mission, vision,
and stakeholder expectations. This
requires upper management to recognize
how each organizational component
combines to create a competitive
operational process.
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Suitability, Feasibility, and Acceptability
With the above framework in mind, a number of academics have proposed perspectives on
strategic effectiveness. Johnson, Scholes, and Whittington suggest evaluating the potential
success of a strategy based on three criteria:
Suitability deals with the overall rationale of the strategy. One method of assessing
suitability is using a strength, weakness, opportunity, and threat (SWOT) analysis. A
suitable strategy fits the organization's mission, reflects the organization's capabilities,
and captures opportunities in theexternal environment while avoiding threats. A suitable
strategy should derive competitive advantage(s).
Feasibility is concerned with whether or not the organization has the resources required
to implement the strategy (such as capital, people, time, market access, and expertise).
One method of analyzing feasibility is to conducta break-even analysis, which identifies if
there are inputs to generate outputs and consumer demand to cover the costs involved.
Acceptability is concerned with the expectations of stakeholders (such as shareholders,
employees, and customers) and any expected financial and non-financial outcomes. It is
important for stakeholders to accept the strategy based on the risk (such as the
probability of consequences) and the potential returns (such as benefits to stakeholders).
Employees are particularly likely to have concerns about non-financial issues such as
working conditions and outsourcing. One method of assessing acceptability is through
a what­if analysis, identifying best and worst case scenarios.
Harmful
to achieving the objective
Internal origin
Strengths
Weaknesses
Opportunities
Threats
(attributes of the environment)
(attributes of the organization)
Helpful
to achieving the objective
External origin
SWOT ANALYSIS
SWOT Analysis
Here is an example of the SWOT analysis matrix.
Mulcaster's Managing Forces Framework
Will Mulcaster argued that while research has been devoted to generating alternative
strategies, not enough attention has been paid to the conditions that influence the
effectiveness of strategies and strategic decision-making. For instance, it can be seen in
retrospect that the financial crisis of 2008 and 2009 could have been avoided if banks had
paid more attention to the risky nature of their investments. However, knowing in hindsight
cannot address how banks should change the ways they make future decisions.
Mulcaster's Managing Forces Framework addresses this issue by identifying 11 forces that
should be taken into account when making strategic decisions and implementing strategies:
Time
Opposing forces
Politics
Perception
Holistic effects
Adding value
Incentives
Learning capabilities
Opportunity cost
Risk
Style
While this is quite a bit to consider, the key is to be as circumspect as possible when analyzing
a given strategy. In many ways it is similar to the potential issues a scientist faces. A scientist
must always be objective and conduct experiments without a bias toward a specific outcome.
Scientists don't prove something to be true; they test hypotheses. Similarly, strategists must
not create a strategy to get to an end point; they must instead create a series of likely
endpoints based on organizational inputs and operational approaches. Uncertaintyis key,
allowing strategic improvement for higher efficacy.
Example
A firm may perform a break-even analysis to determine if a strategy is feasible. The breakeven point (BEP) is the point at which costs or expenses and revenue are equal: there is no
net loss or gain, so the company has "broken even." For example, if a business sells fewer
than 200 tables each month, it will make a loss; if it sells more, it will make a profit. With this
information, managers could determine if they expected to be able to make and sell 200
tables per month and then implement a strategy that is in accordance with their projections.