Formulation of Strategies
Strategy is a difficult concept to define because of the way it has been adopted by organizations over time. Therefore, there are many theoretical definitions to define what strategy is. Perhaps the most comprehensive definition.
Strategy is the direction and scope of the organization in the long term, which creates advantages in the dynamic environment through the best use of its resources and competences in order to meet the expectations of all the organization's stakeholders.
This definition allows us to say everything that involves an adequate strategy. Strategic decisions determine the organization's direction in the long term, outlining the scope of its activities with the objective of acquiring a competitive advantage over competitors.
They are based on changes in the business environment and built on the resources and competencies available to the organization.
As a consequence, they are likely to be complex in nature, elaborated in situations of uncertainty, affecting operational decisions, involving considerable changes in the organization.
Just as it is difficult to define strategy, establish the levels of the organization where strategic planning is necessary, or the way in which it is developed.
According to Chandler(1962), in studies of American organizations, he preached the division of the organization's administration in operations of short-term management activities, specific to a functional area, as well as routine, and long-term management strategies of activities that encompass the organization as a whole. Bertero(1995) distinguishes the operational level is identified with the daily and the short term, while the strategic level is associated with the medium and long term.
Strategy exists at various levels in any organization, taking into account the different degrees of importance of each hierarchical level to achieve the objectives. The hierarchical allocation of strategy in the organizational structure can be: corporate, which determines in which sector the company must operate to improve even more, business unit, which determines how to compete in the chosen sector or business, and functional, which determines how a functional area must work from the chosen business strategy. Corporate strategy explains how the company it will use its resources and capabilities to build and sustain competitive advantages that will favorably influence customers' purchasing decisions.