Strategic Management – 48 hours open exam 第二部分
Task 3
How does 3-Horizon framework inform strategic management?
702 words
The strategic management theory defines ‘strategic management’ in an organizational set up as a continuous process that involves laying out organizational goals and objectives, studying the internal business and competitive business environment, assessing business strategies while at the same time implementing them in the firm in line with the pre-defined organizational goals and objectives (Hill, Jones & Schilling, 2014).
The 3-horizon framework plots out the value of organizational strategies against time. The strategies of a business extend from the current strategies (operators) that are under the first horizon, the possible current strategies (business builders) that are under the second horizon and the visionaries that are a viable alternative for the organization in the future and under horizon three. This structure enables management to figure out each set of strategies in terms of value for the relevant period (current, possible currents and future). By so doing, it becomes important to analyse each set of strategies with a focus on the organizational future.
Managements of many modern businesses have found reference to this structure of importance as it watches achievement of organizational goals and objectives in the right time through strategies’ implementation. The frame is a convenient formula for setting out an appropriate portfolio of strategies over time and the need to marry them to efficiently achieve the existing goals and objectives. Using the framework enables the management to think of the entire life cycle of the organization in terms of strategies and map them accordingly to attain not only a successful present but also the future (Peter & Shu-Ling, 2009).
The model acknowledges the constantly present competition, the ever-present changing environment and the evolving markets from the view of strategic management. Management must steadily progress in counteracting the present business essentials with the opportunities available at the second and third horizons to come up with ideal future at all times. It therefore allows management to address challenges present in the first horizon and nature the situation of the third by allocating resources to suitably govern the expected metamorphosis.
Under horizon one, this is what strategies a business currently holds. There is need to adequately set out the prevailing conditions and the nature of elements, technology and challenges present at this stage for the purposes of perfecting horizon three. Management must keep in mind that with a dynamic market and external business environment, the current situation is not constant (Joel & Naila, 2013).
Under horizon two, management has to explore the appealing future, the perfect desired nature of the future system while at the same time analyse available and emerging components that could be adapted and implemented in the next phase; horizon three. For the most suitable choices in horizon three, management needs to have a keen eye on the dynamics of both the market and competition to come up with best options for this horizon. In this stage, views can diverge and conflict; the reason as to why it is seen as a transition vacuum and termed as most rocky of the three. Management must draw a clear separation line between the vision and current conditions to come up with better and compatible methodologies for the future.
Horizon three may constantly look incompatible with the current horizon as ideas may seem far-fetched in the beginning. It is however the stage at which a perfect merge of horizon one and horizon two elements happen bringing about more efficiency and effectiveness in the operations of a business (Mehrdad, Stephen & David, 2000). Once the targeted components are finally achieved, the cycle repeats itself with the future horizon three becoming the current horizon one. It is therefore a continuous cycle of a business’s strategizing roadmap that an organization manages throughout its life time. The three horizon framework keeps the strategic management team vigilant in its work by presenting the company’s current elements while mapping out its future best-fit status hence enabling a constant improving organizational performance.
Management teams of different organizations use this framework to appropriately understand the conditions and challenges of the various horizons and come up with ideal strategies of managing them. This enables effective strategic management of organizational targets, goals and objectives and to some extent planned out performance (Joel & Naila, 2013).
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