Pervasive studies regarding strategic management have inundated the business world and have conventionalized strategic management. In order to colonize a successful competitive frontier, leaders should adopt and institutionalize a strategic architecture to outline the components and structure of the strategic process (Mansfield, Fourie & Gevers, 2005).
The strategic architecture emphasizes the extension and inclusion of the long-term objectives, strategic formation, and the implementation process. These components create the overall direction and success for a corporation (Mansfield, Fourie & Gevers, 2005). Strategic Architecture strives to choreograph a movement ...view middle of the document...
Long –term objectives create the foundation for the strategic management process. An organization which utilizes a strategic architecture is able to develop better strategy solutions and achieve better organization performance (O’Shannassy & Hunter, 2009).
Long-term objectives are elements required to create a sustainable strategic business model for an organization. They are declarations of what an organization wishes to achieve over a specified period of time. They should be based upon corporate business decisions surrounding (Pearce and Robinson, 2013):
Profitability: Attaining acceptable profit margins.
Productivity: Increase/decrease in productivity of systems.
Competitive Position: Dominance in industry or market.
Employee Development: Address employee needs to retain resources.
Employee Relations: Interest in employee welfare.
Technological Leadership: Decide to be a leader or follower in technological market.
Public Responsibility: Responsible corporate citizen.
A long-term objective should be created to be achievable after consideration of the internal and external factors of the corporation. By consciously creating objectives suited toward core competencies and environmental views, a long- term objective may create a sense of accomplishment of its strategic plans. Pearce and Robinson stated that characteristics of long-term objectives should encompass the following criteria (2013):
Flexibility: This creates adaptability for objective when it faces problematic constraints.
Measureable: This describes what the objective should clearly state and achieve at different intervals of time.
Motivating: This delineates the objective level to meet the inspirational level of the specified group.
Suitable: This identifies that the objective should be aligned to achieve the goals of the mission statement.
Understandable: This describes what is to be achieved through the objectives, communicated to and understood by all strategic managers.
Long-term objectives should be clear, meaningful and unambiguous (Pearce and Robinson, 2013). Potential risks may arise if these factors or ignored or unmet which would cause disrepair to the long-term strategic architecture.
The balanced scorecard was created by Kaplan and Norton (1992) for corporations to develop “. . . a way to clarify, simplify and then operationalize the vision at the top of the organization” (O’Shannassy & Hunter, 2009). The balanced scorecard links a company’s long-term strategy with its goals and actions through evaluation of the following four perspectives (Pearce and Robinson, 2013):
1. Financial: To succeed financially.
Objective: To increase gross profit by 10% annually.
2. Customer: Customer appearance.
Objective: Increase customer loyalty
3. Internal business process: Excel in business processes.
Objective: Improve distributor and/or supplier relationships
4. Learning and...