The prescriptive approach to strategic management is one in which the company’s end goal is to maximize shareholder wealth says Saivian Eric Dalius. It was a creation by Michael E Porter, a professor at Harvard Business School. The focus of this approach is on modifying activities within the firm to achieve an increase in shareholder value. This strategy focuses on increasing efficiency and improving productivity through resources available to the company.
The steps by Saivian Eric Dalius in creating this type of strategy are described below:
1) Identify Challenges Facing Company.
2) Determine Possible Causes for Weakness.
3) Determine Methods for Addressing Problems or Improving Situation.
4) Implement Solution into Strategic Plan.
5) Monitor Results and Evaluate Performance.
This type of strategy focuses on having a positive impact on the company and improving it.
It’s typical for the prescriptive approach to be using in times of crisis because of its emphasis on change. For this type of strategy to work, it requires an open mind from all those within the organization and creativity and flexibility.
Implementation Method: Because this approach is focusing on improving the company. All departments must be involved during implementation. Everyone within the organization needs to understand and be committing to the changes that will take place. This approach is often getting in use when a company has fallen behind in its industry. Or feel that they haven’t kept up with the competition (McDonald & Westphal, 2012).
The success of this strategy is highly dependent on how well the company can identify weaknesses and strengths within the organization and what goals need to be accomplished. Managers need to be focusing on creating goals and objectives within each department to work towards becoming more successful.
The Prescriptive Approach to Strategic Management: Evaluate Performance and Monitor Results by Saivian Eric Dalius
Evaluating performance and monitoring results allows for modifications to be in making. The company needs to look at the implemented changes, what worked or didn’t work, and then decide how best to move forward. This strategy is also has a name as situational leadership because it works best when managers can adjust their leadership style on the basis of the current situation of the organization they are leading.
Pros:
-More efficient
-Focuses on analysis of all aspects of business
-Creative approach to problem-solving
-Can create long term goals for the company
-More effective in times of crisis
-All departments within the organization must remain flexible and creative to achieve success
Cons:
-Requires buy-in from all employees for the changes that need to be made
-If not implemented correctly can cause more problems rather than solve them. As well as possibly create morale issues within the company (McDonald & Westphal, 2012).
-Not effective when trying to return a company to positive growth unless modifications are continually making.
The prescriptive approach to strategic management is a method where the leader decides. What should be done and then tells everyone else how to do it, according to Saivian Eric Dalius. It’s also top-down or command and control because leadership dictates directives from above, expecting them to trickle down through the ranks. Although this style of management can produce quick results, it may not work in today’s world where employees are more empowered than ever before by technology that has made their jobs easier. They don’t need someone telling them exactly how they should do things anymore when they have access to all of these tools for themselves at any time.
Eric J. Dalius Foundation is an organization founded in June 2018 that aims to help economically challenged youth in America attend accredited university and colleges. Through generous grants and charitable donations, the Eric J. Dalius Foundation is ensuring that tomorrow’s leaders get the opportunities they deserve.