Analysing Organisational Strategy

Program Course Outcomes: MBA ESSENTIALS, UNIVERSITY OF LONDON ONLINE COURSES

• identify and maximise your organisation’s strategic competitive advantage as you develop your understanding of the strategic environment and the market you operate within
• Analyse and optimise the performance of a business using technical business and accounting tools
• Use human behaviour insights and leadership frameworks to influence decisions at all levels of your organisation, and externally with investors and consumers, through greater knowledge of human behaviour and decision making processes

Sample Answer

Competitive Advantage, Performance, and Leadership Frameworks

The success of any organisation depends on the clarity and effectiveness of its strategy within the market in which it operates. A well-designed strategy not only provides direction but also acts as the foundation for building and sustaining competitive advantage. This essay analyses the advantages of an organisation’s strategy by considering its impact on business performance, leadership frameworks, and decision-making processes. The discussion also draws on human behaviour insights to demonstrate how strategic thinking can influence decisions at multiple levels.

Strategic Advantage within the Market

The main benefit of a strong organisational strategy is the ability to establish and maintain a sustainable competitive advantage. By identifying key market opportunities and responding with differentiated products or services, organisations can position themselves ahead of rivals. Strategic advantage is not limited to offering lower prices or improved efficiency, but often involves creating unique value for customers. For example, firms that invest in innovation and brand development secure customer loyalty, making it difficult for competitors to replicate their position. Michael Porter’s generic strategies highlight how organisations can achieve advantage through cost leadership, differentiation, or focus, depending on their resources and market environment. A clear strategy therefore becomes the lens through which opportunities and threats are evaluated.

Analysing Business Performance

Another crucial aspect of strategy is its influence on business performance. Managers need to assess performance using both financial and non-financial measures. Traditional tools such as ratio analysis, return on investment, and cash flow monitoring remain important in evaluating operational efficiency. At the same time, modern performance frameworks, such as the Balanced Scorecard, encourage managers to look beyond financial returns by also considering customer satisfaction, internal processes, and learning and growth. This multi-dimensional view ensures that organisations are not solely focused on short-term profit but are also investing in long-term sustainability. For example, a company may report strong sales, but if employee turnover is rising, customer service may decline in the future. Linking performance analysis to strategy allows leaders to adjust goals in line with market realities.

Leadership Frameworks and Strategic Alignment

Leadership plays a central role in ensuring that strategy is not only formulated but also effectively implemented. Different leadership frameworks shed light on how leaders can influence behaviour and decision-making within organisations. Transformational leadership, for instance, is valuable in aligning employees with a strategic vision, encouraging innovation, and inspiring commitment. By contrast, transactional leadership is more effective in contexts that require structure, clear objectives, and accountability. Adaptive leadership frameworks are also relevant in today’s uncertain environments, as they enable leaders to respond quickly to market disruptions. The key advantage of applying these frameworks is that they help managers to mobilise teams, develop trust, and create an organisational culture that supports strategic objectives.

Decision-Making and Human Behaviour

Strategy is closely connected to decision-making processes, both at the managerial and organisational level. A rational decision-making model suggests that managers should gather data, evaluate alternatives, and choose the option that maximises benefits. However, behavioural economics reminds us that decision-making is often influenced by cognitive biases, emotions, and social norms. Dan Ariely and other scholars of behavioural science argue that people do not always act in fully rational ways, which has implications for managers and leaders. Understanding these behavioural tendencies helps organisations to design strategies that account for real human behaviour rather than idealised models. For instance, nudging techniques can be used to influence consumer purchasing decisions, while transparent communication and ethical frameworks can build trust with employees and investors.

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