7 pages
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2850 words
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By Comparison With The Other Factors, Evaluate How Important Stakeholders Are In Strategic Management.

December 13, 2012
The first intention of this paper is to give a clear understanding of key terms used
throughout, helping illustrate their meanings and importance.
Strategy: Johnson et al (2005, p9) argues, Strategy is the direction and scope of an
organisation over the long term, which achieves an advantage in a changing environment
through its configuration or resources and competences with the aim of fulfilling
stakeholder expectations.
I feel that this gives a clear understanding to the term, as it involves the four key areas
every organisation needs to manage; firstly, what areas the business wishes to operate
within, i.e. that markets and its activities. Secondly, creating the advantage, the selling
point, while recognising the environment it operates within is constantly changing.
R Lynch (2006, p7) concurs with time being an important feature of strategy, while
developing a competitive advantage. Thirdly, the reliance on resources to create the
advantage combined with the skills and knowledge to apply them. However, while I agree
that the aim of strategy is to fulfil stakeholder expectations, I do not believe this is
applicable for all stakeholders, this is confirmed by A Crane and D Matten (2004, p50)
who state that a stakeholder is harmed by, or benefits, from the corporation. This
demonstrates that a strategy can adversely affect stakeholders, even if they have no prior
awareness or expectation of an organisations strategy.
This definition of stakeholders is generated by A Crane and D Matten (2004, p50) from
using Freeman (1984) original definition and applying Evan and Freeman (1993)
suggestion of principle of corporate rights and principle of corporate effect. This adapted
definition will apply to this paper as it makes clear that for even the same company; the
range of stakeholders can differ when undertaking different projects or tasks.
My applied definition of Strategic management is also provided by Johnson et al (2005,
p16), as it brings together three key concepts, strategic position, strategic choices, and how
to turn strategy in to action, which all interlink. This is important as I believe there is no
set route when implementing strategic management in practice, so the ability for the
strategic management process to be represented as free flowing, is essential.
Initially we shall examine the factors of strategy, as identified in the definition and
highlight the relative importance of each. A case study, sourced from R Lynch (2006) will
be used as a contextual illustration. The long term direction and scope of the organisation,

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