Sony Ericsson's strategy in action
Question 1
One of the distinct features of the strategy concept is the effort devoted to planning and control, so that all activities of an organization can and will work toward a common set of objectives against which their performance can be measured ( 2002). The process of strategic management involves the systematic examination of a number of interrelated elements, which results in an explicit statement of company objectives and how they are to be achieved. The ultimate purpose of strategic management is to secure competitive advantage of the organization in question ( 2002). Strategies are made by businesses to be able to perform well in its industry and react well to the different problems they have encounter in their day to day operations. Companies use strategic management to maintain their standing in the market and attain some advantage over competitors. The most effective business strategy in a period of economic concentration is to focus on the company's core competency. The core competency may not be the product line that is creating the most revenue right now and it may not be the highest ticket item. The core competency is what helps the company do better than everyone else. It helps them to be better than their current or potential competitors ( 2002).
Companies that are successful in times of concentration are those who strive to provide added value to their customers through increased focus on what they do best which is their core competency and do that by taking as much wasteful effort out of their internal system as possible. Corporate strategy is concerned with matching markets to distinctive capabilities. Business strategy looks at the relationship between the firm and its competitors, suppliers, and customers in the markets which it has chosen. The success of corporate strategy is generally measured by financial measures of corporate performance. There are many alternative financial measures. Some commentators emphasize profitability and earnings per share, others cash flow and returns to shareholders although historic cost accounts are the measure of a management's stewardship of the company's assets, it is current cost accounts which are the key measure of its competitive position and its corporate strategy ( 2002). Unless the firm enjoys a competitive advantage relative to the replacement cost of its assets, it enjoys no competitive advantage in the long run. Successful corporate strategy begins with the identification of the distinctive capabilities of the firm. But if wish-driven strategy and copycat strategy are common mistakes of corporations, they are hardly less common mistakes of governments (1995).
Copycat strategy fails to establish competitive advantage for the firm. It fails partly because it is difficult to know which are the essential and which the peripheral aspects of the success of the firm or group of firms to be emulated. It fails partly because of the efficient market problem. If everyone can do it, it ceases to offer competitive advantage, or profit, to anyone (1995).An emerging view of corporate strategy stresses the importance of identifying and developing resources and capabilities as core elements of any growth strategy or any other strategic choice that a company faces. An inadequately corrected imbalance between the resources and capabilities require for a growth strategy and those available may doom a strategy to failure. The existence of limited resources is always a starting point in examining a decision, never a final situation. Resources and capabilities can be developed inside a company or acquired from outside a company never on an open market as; in this case, those resources would cease to be unique and valuable by means of alliances with other companies. Resources and capabilities, therefore, must fit a company's strategy. A growth strategy that relies on unsuitable resources and capabilities is a strategy that is born with a handicap, and as such is likely to be destined for failure. Suitable resources and capabilities are essential for the development of a strategy. Resources and capabilities must have several characteristics to make a contribution to the firm's growth: they must have a value for the company and that value must be sustainable. Resources become valueless when they are not unique. The development of a unique business concept is fundamental ( 1995).
Brilliant ideas about the future are very useful and necessary. What is more, a brilliant business concept provides the starting point for a company, but not the end point. However, a business concept, more often than not, requires a more or less significant commitment of resources. Strategic decisions are alternatives that, by definition, exclude others. Thus, the investment in the development of a certain product that leaves out other products, or in a certain technology that leaves out other alternative technologies, or in a certain type of production or distribution process that excludes other alternative processes, is a decision that not only entails a major commitment of resources but also defines a certain strategy (2000). Strategic investment decisions are often related to the development of the company's capabilities. In accordance with the resource-based view of the firm, achieving a certain market position is not only to be attributed to a lower cost structure or a better differentiation. Behind these and other qualities, there are some resources and capabilities that, when adequately combined, enable the company to achieve that competitive position. Consequently, the creation of a business concept implies a definition of what capabilities will be crucial for the company in the future and a program for developing or acquiring such capabilities. In turn, this program requires a strategic decision, and an investment of resources in a certain direction, which excludes other alternative directions ( 2000). For a company like Sony Ericsson, having a strategy in action means that the firm has completed the resources it needs to use to complete an action. Sony Ericsson’s strategy is in action when it sees considerable changes to its operational, financial and environmental sectors. The strategy is in action if the value and standing of the firm has improved or worsened, depending on how the company executes the implementation of the strategy. Once Sony Ericsson’s strategy is in action, the firm must prepare for the eventual result of the strategy. Sony Ericsson has the option to create alternative plans that will counter any negative effect of the strategy in action.
Question 2
The challenge of a cognitive approach in business has been to explore the way in which an organizational leader process and use strategic information. More specifically, it is to understand precisely how cognition contributes to strategy development and to highlight the variables that facilitate or bound the positive and negative effects of human information processing on strategy development processes and ultimately organizational performance. It is the extent to which strategic leaders match appropriate variations to their particular strategic context that accounts for the effectiveness of the strategy development process in organizations. The strategy development process is designed and legislated to happen in concert among first the top team and then the corporate board. Consequently, the dynamics associated with a group environment are central to understanding the relationship between cognition and leadership behavior ( 2001). The development of strategy relies on how Sony Ericsson implements organizational learning.
The study of organizational learning is an attempt to engage ideas with some complex and difficult issues associated with organizing. As a result of all this, organizational learning is a fascinating and an enduring metaphor, one that continually yields fresh insights about organization (2004). In addition, however, there are frustrations about the study of organizational learning. There are many theories and perspectives that claim to inform and to represent organizational learning, some of which are poorly thought through; prescriptions for organizational learning in action are at best temporary, but new prescriptions are nevertheless being invented constantly; and almost every senior manager has either done that and moved on, is doing it continually, has her or his own way of defining it in practice, or wants to be told how it can be done ( 2004).
One thing that is generally agreed about the meaning of organizational learning is that it is a process that is connected to action. There is a difference between individual learning in an organization and organizational learning. The sum of individuals' learning in an organization is frequently assumed to equate with organizational learning ( 2003). Efforts to understand organizational learning have been assisted in recent years by the general shift of interest away from organizations and towards organization and organizing. An increasing focus on collective learning, situated learning, communities of practice, and on politics, power relations and learning has helped to shift the academic study of organizational learning away from individual learning, towards social, political and relational interpretations of learning and organizing ( 2003). Learning in organizations and organizational learning also happen by accident, from the unintended consequences of action and through paradoxical tensions that are integral to organizing ( 2001).
Strategy development helps Sony Ericsson choose the best action for a certain instance. Sony Ericsson makes use of environmental analysis, experiences, studies and organizational learning to continuously develop its strategies. The challenge of learning can be expressed in attempts to engage with the paradox, uncertainty and complexity of management and organization. Organizational learning makes use of various methods to gather certain information that Sony Ericsson needs at a certain time. Organizational learning helps in determining the methods used by Sony Ericsson to learn and adapt to the changes done within the environment of the company. When there is increase in the changes in the environment there should be increase on learning for an organization. As changes happen new development and learnings should be craved by a company so that it can be prepared for the possible effects of the change. The changes in the environment can give the company benefits but it may also give a company its problems. Organizational learnings can help the company prepare for the problems created by changes in the environment. The amount of learning cannot be separated from the amount of change in the environment since one complements the other. Organizational learnings can be attributed to the knowledge the company acquired over the years. Additional knowledge comes from experiences and the changes that happened. As times pass by new things are experienced by the company. More knowledge should come from added experiences and unknown changes.
For a company such as Sony Ericsson professional learning comes in many forms. Learning can be in instructional media or personal experience. Instructional media can be in the form of books, journals or other literary sources. Instructional media can also be in the intangible form that includes lessons from teachers, professors and experts. The professors, teachers and experts make presentations and other materials to further instill in the minds of the student or anyone who wants information, the knowledge being explained. Learning can also be in the form of personal experiences. In this method the person learns through on the job training, synthesis and first hand experience. Job training involves the actual application of what was noted in books and discussed in class. Job training can be in the form of daily work experiences. As a person gains more work days so thus his/her experiences in dealing with situation and people. The higher the work days the more experience is acquired by a person. The job training provides the learner a situation that needs solution, but the solution may or may not come directly from what was discussed in class or instructed in a book. The learner has to make a solution based from what was discussed or what the book says. This would help the learner analyze situations and correlate situations with what he/she know beforehand. In a synthesis the learner relates what was discussed to him to planned situations. The learner has to apply the theories and concepts taught to him/her by the book or the instructor. Although the theories and concepts may or may not be directly used the idea behind the concept and theories is emphasized and is correlated to a simulated situation. When it comes to actual experience the learner gets to use what he/she has learned without assistance from the instructor or the book. The learner has to adjust to the changes in the situation and know how to act on certain situations. Strategy development and organizational learning are important concepts for Sony Ericsson because these concepts help the firm plan for the best action that they will take.
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