Strategic Management
Background
It has been suggested by 2014, that Social Media Services1 will replace e-mail
as the primary ICT2 platform for interpersonal communications for up to 20
percentage of business users (Garter, 2011).
As a consequence, key organisational planners and decision makers, as well as
consultants, endeavour to identify processes in which organisations can make
financial use of applications such as Wikipedia, YouTube, Facebook, Pinterest,
LinkedIn, and Twitter (figure one).
Figure one: Social Media Infographic
The diligent opinion of today’s business executives is that Social Media
opportunities afford an evolving platform of financial advantages to be exploited. So
does strategy, with the context of Strategic Management, have a core purpose for
Social Media (Collins & Porras)?
1
Social Media Services include but are not limited to Twitter, Facebook, Tumblr, Pinterest, LinkedIn,
YouTube, etc
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Strategic Management
Introduction
Successful business organisations adopt and embrace the formulation and
implementation of strategic change as an evolving, positive and iterative process.
Adaptive change is seen as a continuous process, so facilitating an effective business
vision to include it, relies on clearly articulated goals, proactive management
strategies, and delegation of responsibly to achieve outcomes. This will ensure that
the organisation is empowered to deliver business services or products.
At key decision points, like increased brand awareness, product placement
integration and organisational business influence, Social Media provides the robust;
yet, adaptive processes to allow the successful facilitation of operational
transformations in the organisation. This is tempered with the aggressive intent of
managerial decisions to ultimately achieve the business end state for profitability.
Strategic management
In many respects similar to crisis management3, strategic management has
evolved as an interdisciplinary corps of knowledge. It has been suggested, strategic
thinking is still an iterative field of study, embodying several different schools of
thought and evolving methodologies. Although one common motif has been
identified, this is shared by the different approaches.
ICT –Information and Communications Technology e.g. Notebook computers, Smart phones,
Blackberry, iPad, Wireless Networks, etc
2
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Strategic Management
That is, that strategic thinking is utilised by those organisations to plan for the
future, using a range of analysis techniques and decision making processes. As a
consequence, it has now become a common activity for many types of organisations
and in many industries. This is a direct result of increasingly competitive business
behaviour to influence and shape the business environment to impose the businesses
will.
Strategic management perceptions
It is suggested that strategy is formulated predominantly by intended means,
through structured strategic planning processes. The strategic process4 can be divided
into three main areas: strategic formulation, strategic implementation, and strategic
evaluation (Thompson & Martin, 2005). However, Mintzberg et al. (2003) would
argue that this division into three areas is more convenient than realistic and consider
promote a holistic view of the entire process.
The evolution of strategic thinking and the move from strategic planning to
more of an emphasis on strategic management has contributed to the heterogeneous
nature of strategic thought. i.e. the strategy process has been criticised by researchers
such as Stacey (2003), in that rational analysis and thinking tends to dominate the
process at the expense of creativity and innovation. The rational approach to strategy
is based on implicit assumptions concerning predictability, measurability and control
in business.
3
Crisis management has been an expanding area of inter-disciplinary research for some years;
however, it has become more evident by recent well publicised events, ranging from the Bhopal and
Chernobyl explosions to the September 11 attack on the World Trade Centre in New York, USA.
4
The Strategic Process: the process of designing and implementing a robust business strategy.
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Strategic Management
Figure two: Social Media policy
planning session
Now Social Media is knocking on management’s door as the panacea of
strategic change; however, the perceptions surrounding Social Media are still to be
determined ... as it is a relatively new platform in the business world with so few
metrics available for empirical data to based strategy upon.
Starbucks Case Study
In order to manage customers' increasing sophistication and evolving
preferences, the static knowledge warehouse strategy based approach of knowledge
management (KM), is undergoing a paradigm shift towards a dynamic and engaging
customer centric focus.
Those organisations that recognise the need to develop iterative relationships
with customers provide a more bespoke service to their customers. This requires
effective and extant management of customer knowledge (Davenport et al., 2001). In
fact, organisations capable of adapting or creating new client knowledge, whilst
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Strategic Management
effectively managing customer knowledge assets, are the ones with competitive
advantage over their rivals (Zhang, 2011).
Hence, an evolving area of interest within KM analysis and practice involves
customer knowledge management (CKM) (Kuhlen, 2003; Rowley, 2002). This refers
to KM strategies pertaining to management of organisational knowledge. This is
obtained through interactions between organisations and their clients (Zanjani et al.,
2008).
Starbucks data collection (Oct 11 – Aug 12)
The results of the Starbucks case study can be distilled down into three distinct
components. Firstly, Starbucks deploys a wide range of Social Media tools5 for CKM
that serve to increase branding awareness and provide marketing instruments for the
organisation (figure three).
Figure three: Starbucks engaging with customers
via social media integration
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Strategic Management
Secondly, Starbucks redefines the roles of its customers through the use of
Social Media by transforming6 them from passive recipients of beverages to active
contributors of innovation. Thirdly, Starbucks uses adaptive and iterative Social
Media strategies to alleviate customers' reluctance for voluntary knowledge sharing,
thereby promoting engagement in Social Media.
Not for Profit (NFP) organisations
By way of an adjunct, NFP organisations now operate in an environment7 where
they compete for resources and are required to validate and improve their
effectiveness (Speckbacher, 2003).
This has resulted in a greater perceived need for them to determine their “best”
strategic direction (Stone et al., 1999), and to control their efforts in pursuing this
direction (Herman and Renz, 1999).
5
The Social Media tools employed by Starbucks include but are not limited to: micro-blogging
services, social networking services, location-aware mobile services, corporate discussion-forum
services, etc as part of their Social Media supported CKM framework
6
Netnography was used to collect data from the four social media services commonly used by
Starbucks (Kozinets, 1997; Sigala, 2012). To reduce any biases, 25 randomly selected data samples
were drawn on an average from each of the social media services over the period of eight months
(January-August, 2012)
7
The ability of individual board members or the CEO to convince the organisation to take
opportunistic decisions about new products or services ...
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Strategic Management
Figure four: Some Not for Profit organisations
Social Media integration examples
Consequently, the employment of selective, robust and focused Social Media
strategies could be a business multiplier to shape their community awareness to garner
support (figure four).
Conclusion
So, for organisations that implement strategic policies and programs, standard
business strategy frameworks are appropriate. However, within the evolving online
world of Social Media, CKM emphasises the importance of Social Media in bringing
the human side into the KM equation (Levy, 2009).
Social Media services have distinct technical features that unleash passion
among users to engage in knowledge sharing (Paroutis and Saleh, 2009). The
openness and participation properties of Social Media entwine users and content,
rendering it suitable for the dynamic, customer centric CKM strategies (Lai and
Turban, 2008).
This document has endeavoured to use Starbucks as an example of best practice
to illustrate that Social Media can be used to supplement and enhance existing
strategies to increase awareness for conventional businesses. It is not a tool exclusive
to online businesses. The lessons derived from the case study suggest that Social
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Strategic Management
Media could be a potential trigger in supporting CKM efforts even for organisations
relying on traditional brick and mortar business model.
The implications suggest that organisations should use Social Media to provide
impetus to their businesses by integrating customers in their operations. A myriad of
Social Media services could be used in a mutually reinforcing manner (figure five) to
provide knowledge for customers on new products and to offer ways to make their
best use (Garcia-Murillo and Annabi, 2002; Horovitz, 2000b).
Figure five: mutually supportive strategies
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Strategic Management
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Strategic Management
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Strategic Management
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