Organizational strategy – definition and meaning

An organizational strategy encompasses all the plans and actions that company leaders undertake to reach their long-term goals and objectives, with a focus on long-term rather than short-term outcomes. In other words, how a company needs to evolve to get to where it wants to go. Organizational strategy also includes a detailed assessment of what it needs to do. We refer to all the actions the company plans to take as its strategic plan.

Before beginning to develop its strategy, the business needs to compare its current status with its desired future position. Specifically, where it wants to be at a given future date. It must define the differences and then list what it needs to do to get there.

Making Strategy Work with Team Spirit

For a plan to work well in a company, all its employees must be on the same page. It’s much like a sports team, which can only succeed if all the players understand the game plan.

If the team spirit is good, and everyone likes working together, the company is more likely to achieve its goals. Company directors need to make sure that their employees not only understand the plan but also feel they are a real part of it.

Senior and middle management

According to SmallBusiness.Chron.com, senior management creates the company’s larger organizational strategy. Its middle managers, on the other hand, adopt plans and goals to fulfill the strategy step by step.

Organizational strategy is closely related to organizational studies. The academic field of organizational studies analyzes organizations. Specifically, it analyses them to determine what makes them thrive or fail.

Cambridge Dictionary says that organizational strategy refers to:
“The plans of a large company or organization about how to develop, deal with changing markets, etc.”

When a company makes the transition from its current state to an intended future state, we call it organizational change.

Organizational strategy – execution is crucial

According to several studies, many companies fail to execute their strategies successfully. A Wharton School article says that the problem is not with the planning. In fact, most of the strategies are good. The problem is with execution.

You must be able to deliver on your intent. Unfortunately, most companies are not good at it. In fact, the majority of executives admit that their companies are not good at execution.

In a Harvard Business Review article, the authors said 60% of employees admitted that their organization was weak at execution.

The authors, Gary L. Neilson, Karla L. Martin, Elizabeth Powers, had invited thousands of employees to complete an online assessment. An assessment specifically about their organizations’ capabilities. They eventually had 125,000 profiles representing over one thousand companies.

When they asked the employees whether important strategic plans rapidly turned into action, most said no.

What is an organization? If you have a group of individuals who work together with the same aim, you have an organization. In other words, members of an organization share a common goal.

Video explanation

Why organizational strategies are important

In this Virtual Strategist video, Erica Olsen talks about why organizational strategies are so important for companies. She begins by talking about the strategies for climbing a mountain.