Richards Rumelt: The evaluation of Business Strategy

 Richards Rumelt: The analysis of Organization Strategy Essay

Richards Rumelt: The evaluation of Business Strategy

1 ) Consistency: the strategy should not present mutually inconsistent desired goals and policies. Rumelt argues that disparity in strategy is not only a flaw in logic. One of the main reasons of approach is to provide a sensible construction for organizational action, which usually fits company objectives and values. Rumelt cities the examples of high- technology organisations facing a ideal choice among offering custom-made high-cost goods with high custom-engineering content material and standardised lower cost items that are bought at higher volume level. If older management will not clearly spell out a consistent perspective of the organisation's position upon these issues, there will always be conflict involving the sales, design and style, engineering and manufacturing capabilities.

2 . Consonance: the technique must signify an adaptive response to the external environment and to critical changes taking place within it. Rumelt's test out of echo focuses on the organisation's ability to match and at the same time adapt to it environment, while competing to organisations which have been also trying to adopt and prosper. However , he states, the main trouble evaluating consonance is that almost all of the critical threats to an corporation come from the exterior environment, and thus threaten most organisationsin that industry. Strategic decision- manufacturers may be and so absorbed on how to achieve competitive advantage more than their competitors that the threats is only recognized after the damage is done. Rumelt also remarks that forecasting techniques such as trends examination do not normally expose potentially critical changes that come about as reaction to interaction between trends.

3. Advantage: the strategy must provide for the creation and/or maintenance of a competitive benefits in the chosen area of activity. The test of competitive advantage is to find whether the technique will allow the corporation to capture the worth it...


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