Inter Organizational Strategy Essay

Excerpt from Essay :

Task 1

1.1 Evaluate the restraints and constraints on the integration of inter-organisational strategy.

Inter-organizational strategy must evaluate the restraints and constraints on the integration of organizations, such as supply chains, shipping, sales and so on. A constraint keeps the organizational from achieving a goal. A restraint places pressure on the organization as it seeks to achieve the goal. The Theory of Constraints can be used to help organizations evaluate their constraints and restraints in order to make effective decisions and reach their organizational goals (Cox & Goldratt, 1986). Goldratt (1998) would explain the theory as useful in determining and controlling for variations in throughput, operational expense, and inventory. Throughput refers to cash generated by sales, operational expense refers to the cost of production, and inventory refers to the money invested in all the parts required for production. Throughput, expense and inventory can involve numerous organizations, which are in turn impacted by politics, economics, society, and other issues. Policies, innovation and intelligence gathering serve a part in the process. Restraints can be manifested in social, cultural and political ways that will impact the organization’s ability to operate as well. For example, if a nationalist policy were to be adopted by the leaders of a foreign government, any organization operating in that country that was not domestically owned would be subject to increasing pressures that would lead to organizational constraints.

According to Goldratt (1998), every organizational goal is limited by at least one constraint, because otherwise sales would be infinite. The reality is that no organization is capable of achieving infinite throughput because there are typically numerous constraints that have to be accounted for in business. These can include restraints in the marketplace, among competitors, demand, social consciousness, political turmoil, disruptions in the supply chain, economic depression, and any number of other restraints that would impact throughput.

1.2 Identify and assess the respective contributions of participating organisations and administrations to the development and integration of inter-organisational strategy.

The respective contributions of participating organizations and administrations in the development and integration of inter-organizational strategy consist of communication, especially with regard to the dissemination of policy, and the flow of information which is so crucial to effective decision making. Communication channels, first of all, must be open between organizations so that strategy can be developed, shared, and maintained (Brinkhoff, Özer & Sargut, 2015). At the same time, these channels help to cascade policy from the top downward while ideas flow from the bottom upward.

Every inter-organizational business unit acts as a source of intelligence that top level administrators use to shape policy. The ideas come from the business units because they are on the front lines, interacting with consumers, who give information about the types of products they want. The units pass this information upwards through the “intelligence gathering” flows and are incorporated by the administration as it seeks ways to re-shape policy so that the organization as a whole is working together as one in the same direction to give consumers what they want.

1.3 Analyse the separate components of the planning and implementation process and the impact of tensions between them on the inter-organisational strategy and its implementation.

The separate components of the planning and implementation process and the impact of tensions between them can be seen in the organization’s approach to strategic planning, based on (a) scenario, (b) deliberate or emergent strategy, and (c) resources. Scenario, strategy and resources all combine to provide a view of the total framework that will serve the administration in identifying constraints while planning for ways to overcome them as well. The emergent or deliberate strategy may combine with the scenario-based strategy as well as the resources-based strategy to more fully integrate all the avenues of information within the inter-organizational administrative effort to supply guidance and oversight. In addition to these, motivation, control, knowledge and the sources of knowledge all contribute to the ownership and maintenance of the strategic planning and policy formulation process, the development of strategic plans and their respective policies, and the oversight of functional plans and policies that guide the lower level business units.

1.4 Assess the impact of the inherent and respective power and status of the participating organisations and administrations on the inter-organisational strategy and its implementation.

Power and status play an important part in shaping strategy and implementing it. Strategy and policy are formulated at the top of the organizational hierarchy. The various organizations contribute information through their information flows, but only those administrators with power and status within the organization will be the ones to develop policy and oversee its implementation. However, the recent rise of the power of social media has seen power become increasingly concentrated in the hands of those who wield the influence of social media (Bolander, Satornino, Hughes & Ferris, 2015). This communication channel has become extremely useful for Tesla’s CEO Elon Musk—but also very dangerous for the company, as he has used it to make statements to investors that may or may not be true and could cause the company to be substantially fined by the SEC. Such concentration of power and status at the top and in the hands of a single individual who has the ability to put out what amount to press releases without oversight or input from the PR department or from other members of the inter-organizational administration is dangerous.

1.5 Determine which key stakeholders and change-making agents are able to promote and implement inter-organisational strategy.

Key stakeholders and change-makers will wield their power and influence (status) to drive motivation, control, disseminate knowledge and add legitimacy to the overall operation and strategy. Again, Tesla’s CEO Elon Musk is a perfect example of how this would be achieved. Musk provides knowledge to investors and stakeholders, uses his celebrity (status) to control the flow of information and the narrative regarding the organization and inter-organizational policies. Work design, culture, climate, and formal management systems are all overseen by him, which is what investors and many stakeholders want as they recognize him as the visionary and the main reason for the company’s success. People skills, social intelligence, communication abilities, technology like social media as well as assembly room technology and data warehouses can all be used to measure performance and manage performance. In other inter-organizational administrations, key stakeholders would include board members, advisors, lobbyists, workers, clients and customers, and investors. Every stakeholder controls some aspect of information and thus has some aspect of power and influence in terms of shaping strategy, whether it is by sending information and ideas up the pyramid or receiving policy and implementing from the top of the hierarchy on downward.

Task 2

2.1 Compare and evaluate the missions, goals, roles, strengths and weaknesses, opportunities and threats of partner and competitor organisations and administrations.

SWOT analysis is a helpful way to identify where a company is positioned in the market. In comparing and evaluating the missions, goals, roles and strengths and weaknesses, opportunities and threats of partner and competitor organizations and administrations, one can see how this approach is relevant. For example, the company Tesla has as its mission is to focus on “not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better” (About Tesla, 2017). Its goal is to produce an affordable EV (electric vehicle) that is stylish yet clean-energy-based. Its role is to be an innovator in the marketplace. Its strength really rests on the celebrity of its CEO and his ability to communicate a vision to the public that many stakeholders want to invest in. The weakness of the company is its debt problem: it has used Musk’s popularity to fund a great deal of questionable decisions and administrative practices which have resulted in substantial losses year over year. The opportunity to capitalize on Musk’s celebrity and vision, however, are still there as the stock price clings to exponential gains over recent years indicating that investors are still in love with the vision and the mission and the idea of sustainability in style. Threats abound, however, as other auto manufacturers are entering the luxury EV market and have much better administrative experience in managing operations (and actually make profits).

One example would be BMW which has as its mission the goal of creating the ultimate driving experience. Its role in the industry is to produce luxury brand cars and its strength is its long-standing reputation throughout the world. Its weakness is that it lacks a celebrity personality type at the top who can promote a new vision and win popular support. Especially since the market is growth-oriented right now and BMW is already established, the company has less appeal to investors. There is an opportunity for BMW to grow, however, in the EV market and it intends to do so. The threat is that the economy…

Sources Used in Document:

References

About Tesla. (2017). Tesla’s mission. Retrieved from https://www.tesla.com/about

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Bolander, W., Satornino, C. B., Hughes, D. E., & Ferris, G. R. (2015). Social networks within sales organizations: Their development and importance for salesperson performance. Journal of Marketing, 79(6), 1-16.

Brinkhoff, A., Özer, Ö., & Sargut, G. (2015). All You Need Is Trust? An Examination of Inter?organizational Supply Chain Projects. Production and operations management, 24(2), 181-200.

Ciborra, C., Gasbarri, G., & Maggiolini, P. C. (1978, October). A participative approach to systems analysis: An action research in the local government. In Conference of the European Cooperation in Informatics (pp. 62-81). Springer, Berlin, Heidelberg.

Cox, J. & Goldratt, E. M. (1986). The goal: a process of ongoing improvement. Croton-on-Hudson, NY: North River Press.

Davidson, M. (2002). Primer on social identity: Understanding group membership. Charlottesville, VA: University of Virginia Darden School Foundation.

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