What Are the Internal Factors That Strongly Affect an Organisation’s Present and Future Performance? Critically Evaluate the Role of Firm-Specific Resources as an Element of an Organisations Strategy Formulation and Implementation
Introduction There have been numerous papers written on the subject of firm specific resources and their link to sustainable competitive advantage for a firm. I will start by explaining some key terms that will be used in the analyses of firm-specific resources. I will then outline the internal factors, and their effect on an organisations performance. Finally I will focus on the resource-based view of the firm in order to critically evaluate the role of firm specific resources.
Strategy Formulation
Strategy formulation is a process in which an organisation must; • Evaluate current performance • Review corporate governance • Scan the external environment • Scan the internal environment • Analyse internal and external factors • Generate, evaluate and select the best alternative strategy
Strategy Implementation is the sum total of activities and choices required for the execution of a strategic plan. It is the process by which strategies are put into action through the development of programmes, budgets and procedures (Wheelen and Hunger 2004)
1. Internal Factors
1. Corporate Governance
Internally, an organisation consists of Top Management and a Board of Directors who act as internal mechanisms. Top management’s responsibilities are to provide executive leadership and vision and manage the strategic planning process. The Board of Directors on the other hand must monitor top management, evaluate them, and formulate strategy. Every board of directors has five responsibilities; 1. Setting corporate strategy, overall direction, mission or vision 2. Hiring and firing the CEO and top management 3. Controlling, monitoring, or supervising top management 4. Reviewing and approving the use of resources 5. Caring for Shareholder interests
(Wheelen and Hunger, 2005)
Strategy Formulation
Strategy formulation is a process in which an organisation must; • Evaluate current performance • Review corporate governance • Scan the external environment • Scan the internal environment • Analyse internal and external factors • Generate, evaluate and select the best alternative strategy
Strategy Implementation is the sum total of activities and choices required for the execution of a strategic plan. It is the process by which strategies are put into action through the development of programmes, budgets and procedures (Wheelen and Hunger 2004)
1. Internal Factors
1. Corporate Governance
Internally, an organisation consists of Top Management and a Board of Directors who act as internal mechanisms. Top management’s responsibilities are to provide executive leadership and vision and manage the strategic planning process. The Board of Directors on the other hand must monitor top management, evaluate them, and formulate strategy. Every board of directors has five responsibilities; 1. Setting corporate strategy, overall direction, mission or vision 2. Hiring and firing the CEO and top management 3. Controlling, monitoring, or supervising top management 4. Reviewing and approving the use of resources 5. Caring for Shareholder interests
(Wheelen and Hunger, 2005)