The strategic process can be influenced by a multitude of aspects or variables, both internal (organization) and external (environment).
The main aspects that can influence the strategy formation process are listed below:
1. Characteristics of the company:
- General strategies and objectives.
- Top management characteristics: training and knowledge, professional experience, management style, personality, etc.
- Organizational culture.
- Power structure and relationships (e.g.: power highly centralized in the figure of a leader who combines ownership and management of the company; decentralized power in different groups and/or people with a managerial profile, etc.).
- Age and size (e.g.: start-up vs. mature company, large company vs. SME, etc.).
- Geographic scope (e.g.: multinational company, national company, local company, etc.).
- Organizational structure and degree of internal complexity (e.g.: unidivisional vs. multidivisional organization, high or low number of hierarchical levels, high or low number of departments, etc.).
- Processes and systems (e.g.: existence or not of processes, systems and tools for the deliberate creation of strategy (strategic analysis, formulation, programming, implementation and control), etc.).
- Human resources: Number of employees, level of qualifications, experience, etc.
- Etc.
2. Characteristics of the company´s environment:
- Level of dynamicity (e.g.: stable vs. turbulent environment).
- Degree of predictability: Greater or lesser ability to anticipate changes in the environment.
- Level of controllability: The degree to which the different agents in the environment can be controlled or influenced.
- Degree of complexity: Number of different issues in the environment that the organization has to deal with simultaneously (e.g. simple vs. complex environment).
- Level of hostility: Level of hostility between the different agents in the environment.
- Etc.
The following table briefly describes the influence that each of these aspects can have on the typology and characteristics of the strategic process.
Source: Roch (2024).
If you are interested in going deeper into the strategic process, allow me to recommend you: - Book: "The strategic process of the firm: Theory and cases" (Roch, 2024). - Courses and consulting program on the strategic process.
Entry 9: Aspects that can influence the strategic process (Part 1)
