Strategic issues

Strategic issues
See also
EFE matrix Strategic management Strategic cost management Strategic management model Management by values Strategic management principles Marketing research Business drivers Benefits of strategic management

Strategic issues can often be described as some fundamental policy-related matters or challenges that affect the organizations’ external and internal environment in various, usually business-critical ways. The issues can relate to internal values such as mission, vision and mandates, procedures and management techniques, but also to the products or services provided, the resources used, financial plans or direct and indirect stakeholders such as clients, employees, service providers etc. Identifying the strategic issues is one of the key elements of strategic planning and management.

Strategic challenges and international managers

Some examples of key strategic challenges that international managers are dealing with are :

• The way that demographic changes affect the businesses,
• Imposed government regulations, taxes and tariffs,
• Constant changes in the competitive landscape,
• New, disruptive technologies,
• Changing needs and likes of the customers (fashion trends, the influence of social media),
• Increasing leverage of various stakeholders,
• Automation of production processes,
• Management of the financial resources,
• Emphasis on human resource management and the importance of organizational culture and role of leadership.

Creating an organized agenda on the strategic issues could prove beneficial for any business operating in a volatile environment. Some scholars advocate for approaching this in a three-step way: listing the main factors affecting the company, dividing them in two categories: strategic (where a creative approach is essential) and operational (where existing knowledge and information can be used), and arranging those in line with the business need (logical, priority etc.). Further analysis can lead to dividing those issues based on whether they require immediate and undivided attention, can be handled in a routine way or it is enough to just monitor them .

One important factor in carrying out the strategic issue analysis is the ambivalence of the matter. Quite often the decision-makers focus on evaluating an issue as a solely positive or negative one, without considering the possibility that one matter could have both good and bad consequences, depending on the business context. Research says, that such broad, ambivalent approach to the strategic challenges identification could bring positive effects on the long-term management strategies and the perception of the external threats and opportunities that the management teams are dealing with .

Identification of strategic issues

Furthermore, there are several ways of approaching the process of identification of strategic issues. John Bryson has listed 7 approaches to Strategic Issue Identification :

1. The direct approach is a very straightforward one, where a simple SWOT analysis and mandates review lead to identifying the key strategic concerns. It is widely used across both NGO's and government organizations.
2. The goals approach is known for being a traditional one in terms of strategic planning. Before developing a long-term strategy, this approach advocates identifying the organizational objectives and confronting them with the identified strategic issues.
3. The vision of success approach assumes that the members of the organization are striving to fulfill a previously established strategy of developing the ‘best possible’ vision of the enterprise – reaching all of the set goals, fulfilling its mission and generally, achieving success.
4. The indirect approach is a complete opposite approach than the direct one.
5. The oval mapping approach is one, where cause-and-effect- diagrams are being used in order to visualize and understand the potential actions and their consequences.
6. The issues tension approach focuses on capturing the specific tensions that are directly related to the organization and addressing those.
7. The systems analysis approach helps recognizing specific patterns in the business-specific issues given that the main area can be perceived as a certain system.

Examples of Strategic issues

• Competitor Analysis: Analyzing competitors’ strategies and positioning, in order to identify opportunities and threats posed by them.
• Market Positioning: Assessing the company's current market position, and developing strategies to improve it.
• Corporate Social Responsibility: Analyzing the social and environmental impact of the organization’s activities and taking steps to improve it.
• Organizational Structure: Identifying the most effective organizational structure to support the company's strategic goals.
• Employee Engagement: Creating an environment that encourages employees to be engaged and motivated.
• Innovation: Developing strategies to foster creativity, innovation, and growth.
• Technology: Identifying and implementing the most appropriate technology to support the organization’s operations and objectives.
• Product and Service Development: Developing new products and services to meet customer needs.
• Financial Management: Ensuring the organization has sufficient financial resources to maintain and grow its operations.
• Risk Management: Identifying the risks associated with the organization’s activities, and developing strategies to mitigate them.
• Expansion: Determining the most appropriate strategies for expanding the organization’s operations and presence.
• Customer Experience: Developing strategies to provide customers with an exceptional experience.
• Strategic Alliances: Identifying and forming strategic alliances with other organizations to leverage resources, capabilities, and expertise.

Advantages of Strategic issues

• Strategic issues provide an opportunity to identify the core objectives and goals of an organization. By identifying the issues, an organization can prioritize the needs of the business, allocate resources, and develop strategies to achieve success.
• Strategic issues can also help an organization identify potential risks and opportunities, and create plans to mitigate these risks and capitalize on opportunities.
• By understanding the strategic issues, organizations can create an effective strategic plan that will guide decisions, both current and long-term.
• Strategic issues can also help organizations develop a competitive edge by allowing them to identify industry and market trends and create strategies to stay ahead.
• Finally, strategic issues can help organizations align their goals and objectives with those of other stakeholders, such as customers, suppliers, and investors. This can ensure that everyone is on the same page and working towards a common goal.

Limitations of Strategic issues

• Strategic issues can be difficult to identify due to their broad and often ambiguous nature.
• They can also be difficult to prioritize due to competing interests and needs of various stakeholders.
• Strategic issues can evolve and change rapidly due to external environmental factors, making them difficult to predict.
• They can be influenced by the internal environment of the organization, making it difficult to identify the root cause.
• Strategic issues can be difficult to resolve due to conflicting interests, limited resources, and complex problems.
• They can be difficult to measure or evaluate due to the lack of reliable data or metrics.
• Strategic issues can be time-consuming and costly to address, requiring detailed analysis and often long-term efforts.

Other approaches related to Strategic issues

An introduction to the other approaches related to Strategic Issues is that they are a proactive way to address any organization’s challenges and opportunities in order to achieve its goals. These approaches include:

• Strategic Analysis - This is an important tool that involves examining an organization’s external and internal environment, including its competitive landscape, market, resources, and financial position. This helps to identify any potential threats and opportunities that the organization may face.
• Strategic Planning - This is a process where organizations develop a vision, mission, and objectives, as well as create action plans to achieve those goals. This helps to identify the organization’s strengths and weaknesses, and develop strategies to capitalize on its strengths and minimize its weaknesses.
• Strategic Decision Making - This is a process of evaluating the options and making decisions that will help an organization achieve its goals. It involves analyzing the data, understanding the context of the problem, and considering the potential risks and rewards of each option.
• Strategic Alignment - This is a process of aligning the organization’s internal and external processes and structures in order to ensure that all parts of the organization are working towards the same long-term objectives.

In summary, strategic issues can be addressed by using strategic analysis, strategic planning, strategic decision-making, and strategic alignment. These approaches help organizations identify their goals and develop strategies to achieve them.

References

• Pillania, R. K. (2008). Strategic issues in knowledge management in small and medium enterprises. Knowledge Management Research & Practice, 6(4), 334-338.
• Plambeck, N., & Weber, K. (2009). CEO ambivalence and responses to strategic issues. Organization Science, 20(6), 993-1010.
• Bryson J.M. (2018). Planning for public and nonprofit organizations. A guide to strengthening and sustaining organizational achievement 2018, John Wiley & Sons
• Heath R.L., Palenchar M.J. (2009). Strategic issues management Organizations and Public Policy Challenges Sage publications, pp.1-127
• Dutton J.E., Jackson S.E. (1987). Strategic Issues: Links to Organizational Action Academy of Management Review, vol. 12 (1),
• Schneider S.C., Meyer A. (1991). and responding to strategic issues: The impact of national culture Strategic Management Journal, vol. 12 (4), pp. 307-320

Footnotes

Author: Anna Śliwa