Literature Review Outline


I. Introduction


            Contains link with the introduction and summary of the contents of the succeeding discussions


II. Concepts and Theories


            A. What is strategic audit?


            B. What are the uses of strategic audit?


            C. What are the components of strategic audit?


                        1. Resource Audit


                        2. Value Chain Analysis


                        3. Core Competence Analysis


                        4. Performance Analysis


                        5. Portfolio Analysis


                        6. SWOT Analysis


III. Empirical Application


A.    How do actual business firms perform or use strategic audit?


B.     How has strategic audit affected the operations and performance of actual business firms?


C.     What issues or challenges emerge in the conduct of strategic audit?


D.    What are the best practices in the use of strategic audit?


IV. Synthesis


 


 


                                                    Literature Review


Strategy


                              The term “strategy” origins from the Greek word “strategia –


 


the art of war .According to Webster’s New world dictionary “Strategy is the skill in


 


managing or planning”.


 


                              There are vast amounts of literature on what the “strategy “really means are:


 


Coulter (2002:7) define that the strategy is a series of goal-directed decisions and


 


actions in terms of organisation’s skills and resources and the opportunities and


 


threats from it’s environment.


 


 


“Strategies are means to ends, and these ends concern the purpose and objectives of


 


the organisation. They are the things that businesses do, the paths they follow, and the


 


decisions they take, in order to reach certain points and level of success.” (Thompson,


 


2001:7)


 


 


Johnson, G & Scholes, K, (1993) describe that the strategy is the direction and scope


 


of  an organisation over the long term which create the competitive advantage for the


 


organisation in the accordance with it’s resources, environmental circumstances so


 


that it can fulfil the stakeholder expectations and the needs of the market.


 


 


“Strategy is the primary means of reaching the focal objective. The focal objective is


 


whatever objective is in mind at the moment. Strictly speaking, it is literally


 


meaningless to talk about strategy without having an objective in mind. Viewed in the


 


context strategy becomes an integral part of the ends-means hierarchy” (Thorelli,


 


H.B, 1977)


 


 


Chandler ( 1962) also explain that the strategy is the activities of the enterprise


 


concerned with long-term goals and objectives to formulate , to take the action ,to


 


allocate the resources that necessary for carrying out that goals.


 


 


 


 


Strategic Audit


 


                              “The strategic audit is a review of a company’s situation by a


 


person trained in business planning and strategic thinking,” (lasher, 1999)


 


 Thompson, (2001) describes that the strategic audit is a type of management audit


 


along with a corporation-wide perspective and the purpose is to make a


 


comprehensive assessment of a corporation’s strategic situation.


 


 


                                 Gordon (2002) claims that the strategic audits have unpredictable


 


results although there are so many definitions set out for that. He also identifies the


 


questions to cover a framework of the strategic audit and all these questions will also


 


fully cover the framework of this research.


 




  • What business are we in?




  • What is our current strategy?




  • What forces are shaping competition?




  • Where is competitive advantage?




  • What is our distinctive competence?




  • What of priorities, timing and resources?




  • How do we best for the future?




  • What provisions exist for implementation?




 


 


                                 The business should be enough cabale for having a good resources


 


and competency , to understand the condition .In strategic audit all the business


strategries are evaluated and adjustments are made if nesseary . “ A Strategic Audit takes


 


a detailed look at the prevailing strategries in key areas of the organization “ ( Detailed


 


Strategic Audit 2007 ). By conducting a strategic audit , it helps not only to spot out the


 


weakness of the business strategy and planning process but also giving an ideas to


 


establish the structured , systematic and the most suitable strategic planning approach of


 


it .


 


 


 


 


6. SWOT Analysis


 


 


                               Pearce and Robinson (2002; 202) state that a “SWOT analysis is a


 


widely used technique through which managers create a quick overview of a


 


company’s strategic situation.”  It provides an overview of the internal


 


(organisational) factors (i.e., strengths and weaknesses of the organisation) and


 


external (industry) factors (i.e., opportunities and threats of its environment).


                               


 


                                  Pearce and Robinson (2002) suggest that this approach can be


 


seen as one of four distinct areas by matching between a firm’s internal factors and


 


external factors.


 


 


 


 


 


 


 


 


 


 


 


Environmental Scan


          /


\           


Internal Analysis   


   External Analysis


/ \      


           / \


Strengths   Weaknesses   


   Opportunities   Threats


|


SWOT Matrix


 


 


Fig 1: SWOT Analysis Framework


 


                              


                          


 


 


                                     To delevop a SWOT profile a matrix is constructed . This matrix is


 


known as TWOS matrix and it is profounded by Heinz Weihrich . (SWOT Analysis 1999


 


-2007 )


 


 


                                


 


Strengths


Weaknesses



Opportunities


    S-O


  W-O



Threats


    S-T


  W-T


 


Fig 2: SWOT / TOWS  Matrix


 


 


S-O Strategy which is most desirable and advantageous strategy it seeks to increase the


 


firm’s strength to exploit the best opportunity .


 


W-O Strategy aims at minimizing the weakness to pursue opportunites .


 


S-T Strategy attempts to use the organization strengths to deal with the environmental


 


threats .


 


W-T Strategy established a defensive plan to overcome the weakness and threats .


 


 


                                  While  SWOT analysis are beneficial , there are also limitations


 


of it.Recklies(2001) back this by stating that the main weaknesses of the SWOT


 


model results from the historic context in which it was developed. This idea is claim


 


back by Haberbeg et al (2001:95) who explain “ it was conceived in simpler times and


 


does not cope well with some of the subtler aspects of modern strategic theory.”


                                   


                                    Grant(1995) further argue that there are variable factors totally


 


depend on the SWOT Analysis process, such as, capacity of people to analyse


 


strengths, weaknesses, opportunities and threats objectively or the strategic


 


perceptions of the organisation which was influenced by hierarchical position,


 


language and culture although SWOT can be ambiguous in its own assumption.


 


 


 


 


 


                               


 


 


References


 


 


Chandler (1962) Strategy and Structure, MIT press, Cambridge, cited by Hindle, T (1994) Field guide to Strategy, the economist Books Limited, Boston.


 


Coutler.M, (2002) Strategic Management in action,2nd Edition, Prentice Hall


 


Fredrickson, J (ed.) (1991), Perspectives on Strategic Management, Harper


 Business, New York.


 


Grant.R.M,(1995)Contemporary  Strategy Analysis: Concepts, Techniques,


 Application. 2nd Edition Blackwell


 


Guilford, J.P. and B. Fruchter (1973). Fundamental Statistics in Psychology and Education, 5th Edition. New York: Mc Graw-Hill.


 


Haberbeg A, Rieple A.(2001) The Strategic Management of Organisations, Prentice Hall, London


 


 Johnson, G. and Scholes, K., (1993) Exploring Corporate Strategy – Text and    


 Cases, Prentice-Hall, London.


 


Recklies,D (2001) , Beyond Porter – A Critique of the Critique of Porter,


Management Models, Management Portal.


 


 


Thompson, J.L (2001) Understanding corporate Strategy, Thompson learning, London


 


 Thorelli, H.B., Strategy + Structure = Performance: The Strategic Planning Imperative, Indiana University Press, Bloomington, 1977.


 


Webster’s New World Dictionary, CD-ROM edition, Merrion-Webster, Springfield, MA, 1992.


 


 


 


 



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