Question

How might the process of strategy formulation, implementation, and evaluation differ for (a) large businesses (b) small businesses (c) not-for-profit organizations and (d) global businesses?

Answer 1

We need to fully understand the term Strategy to understand its variances in different size and types of organizations. This applies to for profit, non-profit, social enterprise local, global or any other type of organization.

Strategy comes from the latin ‘Strategem’- towards a goal. It has its roots in the military where the purpose of strategy is to identify the critical hill and then plan how to conquer it.

German military strategist Helmuth von Moltke said it centuries ago, “No battle plan survives first contact with the enemy". It is expected, in military strategic planning, that our well crafted intentions will change and evolve. Thrusts that are being successful will be provided additional support and where things are not working we may need to retreat.

However not planning at all, because the devised plan may have to change, is not an acceptable answer.

When this military concept of strategy was incorporated in the Business curricula it faced the issue that the Strategy of a corporation gets colored by the people who are doing the planning and what are their expectations of the results of the strategic plan. Most of the players are not trained to think like military generals, they are usually risk averse.

Structure and Strategy have a symbiotic relationship and depends upon the stage of the company.

At the startup stage structure is loose and everybody pitches in to do whatever is needed. The key is to find a business model and strategy that begins to take a hold in the market place. Without finding that foothold you are dead anyway. The motivation is clear- get that hill. When you get some success, you set the structure, and throw more resources, to follow that seemingly winning strategy. At this stage the Strategic planning is closer to what it is intended to do. So, at startup, strategy is paramount, they don’t worry so much about structure. It is whatever it takes to get a foothold.

As the company grows, the strategy becomes somewhat fixed and the company structure is constantly optimized to deliver that winning strategy more effectively. Pretty soon the structure of the organization begins to restrict the range of strategy that it can effectively deliver. Any deviation rocks the boat and takes away from the well oiled machine. Strategy begins to follows the prevailing structure. Strategic plans become budgeting exercises reflecting more of the same. Any deviation from the as is is considered too risky and is hardly even examined. Strategic Planning begins to look like an update of the present budget and far from what it’s original intention is supposed to be.