Strategic leadership in changing world Essay Example | Topics and Well Written Essays - 2000 words

Strategic leadership in changing world - Essay Example The paradox strategy is explained further by the porter’s assumptions about the significant of generic strategies and Raynor assumptions that these strategies have a higher risk of bankruptcy (Eldring 2009:17). Hamel assumes that strategy is a stretch that considers the essential paradox on the leadership that cannot be entirely planned and does not occur in the lack of a clearly spoken and widely shared aspiration. Organizations with hybrid strategies may not be successful in the industry, but they lower risk of running into financial crisis. This is the essence of the strategy paradox and complementation to Porter’s findings, who did not take the risk variable into account. Organizations with hybrid strategies are much less exposed to strategic uncertainty than the organizations with pure strategies. Porter argued that it is an unwillingness to make choice that organization choose for a hybrid strategy, but rather a diverse and risk averse approach can be risk in the organization (Porter, 2008:26). Meanwhile, market based view on the work of Michael porter will be discussed and it assumes that profitability is established mainly by the structure of the industry in which the company operates. The industry structure is evaluated based on the five-force framework. Consequently, the RBV strategy is associated with the works of Hamel that focuses on the competitive advantage in the organization, but use an inside out approach. Meanwhile, it is the starting point for organization’s internal environment and is viewed as the alternative perspective to Porters five forces framework that considered as the industry structure (Delfmann 2005: 226). PORTER (MBV) Porters argue that industry structures within organization are positioned against structure that determines how profitable individual firms should be. In the MBV framework, it is a critical task to analyze the industry structure to establish an ideal positioning and align value chain positionin g in the organization (Delfmann 2005: 226). Porter identified three generic strategies that include differentiation, cost leadership and concentration on selected areas to explain its positioning strategy. Thus, the significant critique of the MBV is based on its outside in perspective because it does not consider company internal aspect. Porters point out that the MBV has the significant impact on the strategic business unit level. He argues that this approach provides an efficient model of evaluating the nature of competition within an industry. Based on the MBV perspective, competitive advantage arises from an organizational dominance position within its industry. Thus, organizations can achieve a dominant position by employing a generic strategy (Weigl 2008: 90). The organizations with this dominant position produce monopoly rents since they thrived in restraining productive output. Porter argues that monopoly rents can be produced by intentionally restricting output in respect to competitive levels. Meanwhile, it can include the analysis of behavior and in respect to market position of competitors. The MBV helps the firm to position in its environment, create barriers for competitors, and protects its business. Therefore, the organization can exercise market power and earn monopoly rents. Meanwhile, Porter develops