A Strategy To Align Organization And Environment Essay

This paper analyzes the term strategical convulsion exactly means, types of strategic beget, necessities to focus on strategic mate, and or so eventfully how well an organization can align its resources & capabilities with the opportunities that exist in the external milieu so as to achieve peak process in the business. Strategy of Nestle as an example to discuss how far-off it is true that effective strategic run ensures organizations resources & capabilities and what the environment exactly needs from it.Key Words strategical, encounter, Strategy, Resource, Capabilities, Opportunities, Environment, Business Introduction It should be recognized that any strategy or management style is distract just in a particular set of circumstances. strategic jib enables an organization to operate in its particular competitive situation at peak effectiveness. It expresses the degree to which an organization is interconnected its resources and capabilities with the opportunities i n the external environment.The matching takes place finished strategy and it is therefore vital that the company defy the actual resources and capabilities to execute and support the strategy. Meaning of Strategic Fit The contingency theorists argument that performance outcomes ar maximized when a trusty achieves an alignment or fit between a firms external environment, its internal factors and its strategy has been well established in the publications (Burns & Stalker 1967 Lawrence & Lorsch 1967 Keats & Hitt, 1988).Nadler and Tushman (1979) theorized that the greater the total degree of congruence or fit between the various components, the more effective will be the organization, stellar(a) to higher levels of goal attainment, utilization of resources, and adaptation. Need for Strategic Fit Strategic fit is a quest to align the organizations carrying out with the needs of the market. It also involves identification of the opportunities and the action to capitalize on the op portunities. Strategic fit can be utilize actively to evaluate the menstruation strategic situation of a company as well as opportunities such as M&A and divestitures of organizational divisions.Strategic fit is related to the Resource-based view of the firm which suggests that the key to profitability is not only through positioning and industry selection but rather through an internal focus which seeks to utilize the unique characteristics of the companys portfolio of resources and capabilities. Resources s Capabilities A unique combination of resources and capabilities can eventually be authentic into a competitive advantage which the company can profit from. However, it is important to differentiate between resources and capabilities.Resources relate to the inputs to production owned by the company, whereas capabilities clear the accumulation of learning the company possesses. Types of Resources Resources can be classified as tangible resources and impalpable asset resour ces. Tangible Resources The term tangible means adequate of being touched, genuinely or actual, rather than imaginary or visionary, distinct not vague or elusive, having actual physical existence, as real estate or chattels, and therefore capable of being assigned a note value in monetary terms. Financial (Cash, securities) Physical (Location, plant, machinery) are most of the tangible resources Intangible Resources Resources that are not physical in constitution are said to be Intangible resources. Corporate intellectual office (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all ballpark intangible resources in business point of view. An intangible resource can be classified as either enigmatical or definite depending on the specifics of that resource.A company brand name is considered to be an indefinite resource, as it stays with the company as big as the company continues operations. However, if a company ent ers a legal organisation to operate under another companys patent, with no plans of extending the agreement, it would ready a limited life and would be classified as a definite resource. Technology (Patents, copyrights) Human resources Reputation (Brands) Culture, are some of the intangible resources. CapabilitiesCapabilities are what a firm does, and represents the firms capacity to deploy resources that have been purposely integrated to achieve the desired end state. Capabilities become important when they are combined in unique combinations which create join competencies which have strategic value and can lead to competitive advantage. Capabilities necessary for strategic fit are 1. Coordination 2. Commitment 3. Competence (technology, management and leadership) 4. discourse 5. Creativity 6. Capacity management (allocation of resources)Benefits of Strategic Fit The extent to which the activities of a single organization or of organizations working in partnership concomi tant each other in such a way as to contribute to competitive advantage. The benefits of good strategic fit include live reduction, due to economies of scale, and the transfer of knowledge and skills (technological expertise, managerial know how), use of common brand name. The success of a merger, joint venture, or strategic coalition may be affected by the degree of strategic fit between the organizations involved.Similarly, the strategic fit of one organization with another is very much a factor in decisions about acquisitions, mergers, diversification, or divestment. Types of Strategic Fit 1. Market related fit 2. Operating fit 3. Management fit Market Related Fit Market related fit arises when value chains of different businesses overlap so that the products can be used by same customers, marketed and promoted in similar ways, distributed through common dealers and retailers.