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‘Strategic Management is not a neutral body of knowledge. It conveys sets of assumptions and practices that systematically raise the status of some groups and ideas at the expense of others. Discuss. The three areas this essay will discuss are the strategic management of culture, globalisation, the strategic management of financialization. This essay question is asking you to draw out and examine strategic management in terms of the effects it has for different groups and for different ways of understanding the social and organisational world. To answer this question, you will need to identify whether (and if so how) strategic management seems to be constructed in a way that promotes some group’s interests and ideas at the expense of others.
This essay will discuss some of the effects of strategic management from different people’s ideas and practices on the different ways of understanding in the business world. Such as Henry Mintzberg (1987), where the author illustrates how strategy considered as plans or perspectives (models). However, it demonstrates strategic management are ideas, knowledge and practices appeared from different models. For example, Igor Ansoff (The Rational Planning Model), also, Porter’s Five Forces model.
The essay will have three main sections to discusses about three different areas of strategic management which includes some areas were covered in the unit as the following, the strategic management of culture, the strategic management of globalization, the strategic management of financialization. Each of these themes has a different perspective on strategic management. In the first paragraph of each section the paper begins by defining each of the culture, globalization and financialization terms in the management field and then it will address the benefits and the impacts of these terms of the strategic management of on specific groups. In the second and third paragraphs of each section, the paper will explain which group is benefiting and not benefiting from ideas or practices of strategic management of culture, globalization and financialization, as these ideas were formulated from some other groups such as managers in the organizations. For example, some benefiting groups from these terms such as. The strategic management of culture is a crucial factor in the organisations, the idea of this term can benefit the employees of any business to bring them to work as a team and for a common goal. The financialization can benefit many people around the world just like intermediaries that connect individual households to global financial markets, such as banks. Where globalization can benefit the many countries to decrease labour exploitation problems or develop and connect all people around the world.
The paper concludes by summarising the concept of strategic management can have many different views such as plans or ideologies. Also, it will explain the advantages of the strategic management of culture, globalization, and financialization which allowing some groups to benefit at the expense of others.
The idea of strategic management was borrowed from military strategy to business strategy. Many authors believe that strategic management is a process that involves managers from all parts of the organization in the formulation and implementation of strategies and strategic goals. According to Henry Mintzberg (1987), the author defines strategy as a plan such as ”strategy is a plan-some sort of consciously intended course of action, a guideline to deal with a situation”. Another definition by the author is that strategy is as perspective, for example, ”strategy as a perspective focusses the attention on the reflections and actions of the collectivist’’, (Mintzberg, Strategy, Part I, 1987).
Businesses mostly followers many models that were created for military strategy. These models have individuals plans or designs on how to run a business with long-term success. For example, Igor Ansoff (The Rational Planning Model), this model is plans and ideas were introduced by a Russian engineer in the 19th century for the organization’s goals, many these ideas were borrowed from military strategy into the business strategy. Also, Porter’s Five Forces is another model which was created by Michael Porter in (1980s), these ideas or practices were designed to help the businesses with guidelines details, (Chris Carter, Stewart R. Clegg and Martin Kornberger 2008).
The strategic management of culture, culture plays a significant role in the organizations and in the communities. The best or well-built procedures of organizational culture would provide a safer environment for employees and customers and it would have an ethical organizational place or good reputation. Having organizational culture in strategic management is very essential for the businesses, as both organizational culture and strategies are social producers and many authors or strategists claim that culture and strategies are connected. It is believed that the organizational culture is more about ideas, rituals, and beliefs of people who have an impact on the industries as evidence is mounting that the theories and practices of organisational culture are more than a passing passion or a simple repackaging of old ideas. As Thompson. P, David .M, stated that in (1995), ”corporate culture, which can be described as the way that management mobilizes associations of values, language, rituals, and myths”. Which is the essential part of the organizations in the commitment and enthusiasm of employees and working for something worthwhile. The top managers decide to establish a culture that can look right for everyone in the industry to become a powerful management work for shareholders to connect and operate their leaders with values and ideas to do their work in a strategy caring method.
The ideas and the theories of strategic management of culture can benefit many people in the organization from different backgrounds such as employees and other shareholders. Corporate culture strategy plays a vital role in the employee’s actions and plans, it can bring among employees’ integration, cooperation and work as a team. As some authors argue that ”organizations can use cultural strategy to influence, educate and shape their staff ‘s mindset and attitude to gain their support in following the company’s plan and procedure while reducing resistance in the organization”, (Sinha 2008). One of the most important aspects of corporate culture that has the capacity to turn employees into advocates because employees want to feel like they are doing something that matters to the company, they are more likely to consider culture advocates. According to HUGH WILLMOT (1993) ”central to these ideas is the doctrine that the discipline of culture ensures that the practical autonomy of employees is dedicated to the realization of core corporate values”.
This shows that corporate culture strategy can benefit not just the employees but also the customers. Mainly customers look after which businesses have a good cultural strategy because with a strong organizational culture it can attract many customers to the business such as banks. As Emmanuel Ogbonna, Barry Wilkinson (1990) states that ”the transformation of a culture of the organization and the values of employees such that to a high quality of personal service is enjoyed by the customer”, and this can create long-term profit for the businesses. It appears that the rationales of the corporate culture strategy can drive from managers or other strategists to benefit customers or employees.
However, but also many people do not benefit from the cultural strategy, or it can have disadvantages for different shareholders. This can occur when businesses have a poor corporate culture strategy which results in a lack of communication between employees, a lot of competition, an unhealthy focus on profit, less engagement in the office, no empathy and deficient of leadership or management. These could have a huge impact on different shareholders such as employees, customers, suppliers, and investors. Also, some low-level employees such as shopkeepers, shopfloor workers or a cashier, are less likely to benefit from the organizational culture strategy. As E. Ogbonna and B. Wilkinson (2003), explained that ”the position of organizational culture has been mostly negative and many academics have raised moral concerns in terms of the inculcation of organizational values to lower-level employees who are disadvantage regarding of their status and power capacity to decide organizational values ”.
The strategic management of globalization, while strategic management refers to the plans, carry out most of the company’s models, strategic management has a significant connection to the globalization. In recent years the term globalization has been advanced in the corporate world and many businesses use technologies to make their job easier such as face to face meetings via Skype around the globe. The discussion on globalization that controlling the business press and the management journals focus mainly on its economic mien. Globalization is a theory in many quarters as an inevitable process, as some authors argue that ”globalization is an inescapable reality making nations states obsolete”, (Ohmae and Schmidt, 1995). As well as Globalization is a political process that is raised by the connection of power and domination. Also, the term globalization is a process of social and cultural aspects, like the Waters (1995), stated that the globalization ” as a social process in which the constraints of the geography on social and cultural recede and in which communities considered the awareness that they are receding”.
Globalization has many different advantages that people benefit from the strategy of globalization. People or citizens around the world would benefit from globalization that can help them to develop themselves or their countries, such as decreasing border restrictions that allow people to move freely and to work or study in developed states, and opening product access by decreasing export barriers which benefit the consumers from import or export products. Also, financial globalization is likely to improve the financial systems in many states. According to Sergio L. Schmukler (2004), states that ”financial globalization can lead to large benefits, particularly to the development of the financial system”. In the last few decades, many countries have seen a dramatic change in their financial systems which was from the new technology and the liberalization systems, the main groups who benefited from these new systems are governments, private investors or borrowers and financial organizations.
At the same time, global strategy have disadvantages or some groups that do not benefit from it such as in financial globalization it might carry out sometimes crisis or risks, as Sergio L. Schmukler (2004) defined that ” countries liberalized their financial systems and became integrated with world financial markets”, the globalization would establish a significant impacts to those countries. As a result, the crises of globalization would create for many states an economic downturn, high level of inflation and price changes. For example, the social consequences of globalization have been seen in many places around the globe such as the ”labour strikes in France and South Korea, the current crisis in Indonesia, and the rise of religious groups”, is can lead to a breakdown the policies and an initial backlash against the globalization, which is a major of globalization is the problem of governance (Hirst and Thompson, 1998).
And lastly, the strategic management of financialization, the finance strategy is one of the most important strategies in all businesses, the idea of financialization is progressively used to express the concept that a primary shift in the last few years has occurred in the part of capitalist activity. The main theory of capitalist businesses is used to improve the economy by manufacturing or trading products and services. The growth of financial strategies in the markets has shaped the way of financialization from industrial to capitalism. According to Rosemary Batt and Eileen Appelbaum (2013), both authors argue In the organizational system ”financialization entails the process by which external financial actors such as investment banks, large investors and shareholders—are able to influence or control the internal organizational strategies and financial outcomes of nonfinancial firms”. The finance strategy helped the economy of many countries to rise, and many authors argue that financialization refers to a ”pattern of accumulation” in which profit raise mostly by financial channels rather than trade and commodity production, (Krippner, 2005).
The financialization strategy is very important for organizations to meet their goals and target the company’s success. Many businesses benefit from the finance strategy as a guide or plan for their profitable, such as shareholders’ values mainly refers to the ideas and practices and the main essential factor of the corporation is to make a profit for its other shareholders. According to Aglietta (2000, p.149), ”shareholders, value has become the norm of the transformation of capitalism”. Also, a lot of people such as customers and investors who benefit from finance strategy such as banks provide ‘finance’ for wealthy and middle-class households, capital-funded pension plans, and home mortgages for people as a loan and the banks take back double the amount they provided to the citizens. According to Davis (2009), ”The financialization of every day has been facilitated by important technological and institutional developments in the second half of the twentieth century, allowing people from all walks of life to become investors”. Private organizations, banks, securities, and government firms benefitted the most.
However, the disadvantages of finance strategy, shows that employees who has fewer benefits of financial strategy, as many employees are under pressure every day by their employers to meet the company’s profit, also the limitation of the capacity that employees have at their workplace. According to (Lapavitsas2011) ”defined that the dramatic rise in the fortunes of the finance sector, it provides the limited capacity to generate employment”. The data shows that workers were certainly being treated less like shareholders and more like factors pf production, (Fligatein and Shin, 420).
Finally, it shows that strategic management is very important and crucial in the corporation’s world because they provide directions and powers for long term success, encourages new ideas and above all and develops a sustainable competitive advantage. Each of the areas discussed in this paper describes which groups benefit and which do not benefit from each of the following areas; cultural strategy is to enhance, manage or control the behaviours of the employees at the workplace. Mainly employees and other shareholders who benefits from cultural strategy. While globalization can benefit people around the world to connect them together by technologies. And finance strategy is the dominant factor in the corporate world which mostly benefit governments, investors, private sectors such as banks.
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