Introduction
Strategic management comprises of all the tasks that managers accomplish for the development of the strategies of organization (Dassler and Varkkey, 2009). Strategic management is an essential task, and it consists of all the major functions of management such as planning, leading, organizing, and controlling (Dubriun, 2011). It is important for the managers to ensure strategic management because the markets are changing continuously, and strategies are formulated on the basis of assumptions. So, these strategies and market conditions are difficult to understand without having perfect knowledge. In order to ensure proper management in MasterCard, the strategic planning is emphasized so that the operations of the company can be performed in the best possible manner. Further, the company has also paid attention to the training of employees in order to make them aware of the changing market conditions that they should expect, the competitive environment of the organization, opportunities, and threats that are faced by the company, the methods to achieve growth in the industry, and method of pursuing a successful strategy for ensuring growth of the company. The strategic management concepts and theories that are applicable on MasterCard are Resource Based Theory, Knowledge Based Theory, SWOT analysis, identification of the organizational goals, strategies, and mission, formulation of the strategies, Implementation of strategies, and evaluation of the results.
In this assignment, the major process of strategic management, which is applied by MasterCard, the perspectives, concepts, and theories of corporate strategies that are used by MasterCard, and strategic plan that is required for holding the event, is described in detail.
Explanation
Processes of Strategic Management in MasterCard
The company has identified its mission, strategies and goals in a way that it wants its employees to understand the change, and difference in conducting operations and dealing with people after the initial public offering. So, a goal is set that the employees of company should be provided adequate training in order to make them understand and preparing them for working effectively in the company. The company has then formulated the strategy that in order to provide information regarding various aspects of the business the human resource specialists and the local managers facilitate the employees with their knowledge and experience. They will deliver the required knowledge to the employees in order to inform them and prepare them to deal with different scenarios that they have to face in business. The company has then focused on the implementation of the strategy in a way that the trainers will communicate face-to-face with the employees, and provides them information about the public traded company, and the changes that they can expect from the organization after the stock market launch. The training aimed at providing the maximum information to the employees so that they can effectively understand the difference and changes in the organization after the initial public offering. The company aimed to provide training on three aspects that are most important for the organization. The first aspect is the competitive position of the company, second one is the achievement of financial strength and third one is adequate strategy that a company can adopt for achievement of success after Initial Public offering or IPO. The organization is also evaluating the results by expecting that provision of training will help the employees understand the strategies and changes that are required in the organization after the IPO in order to perform the operations smoothly and effectively.
Theories and Concepts of Strategic Management Applicable on MasterCard
Considering Resource Based view that is indicative of the fact that a company comprises of many capabilities as well as resources (Wit and Meyer, 2010). The resources and the capabilities are, however, composed of the human, physical, and the financial assets (Hoskisson, Hitt, Ireland and Harrison, 2012). But, they are not homogenous. Such as some human beings are more talented as compared to others, so keeping this fact into consideration MasterCard is focusing on the training of the employees so that all of them develop necessary skills that are required for understanding the change in the processes of the organization. The company can then translate the capabilities as well as resources in to the competitive and strategic advantage by making them rare, valuable, and inimitable. Furthermore, knowledge based view is also applicable on the situation prevailing in MasterCard. The knowledge based view points out towards the fact that knowledge is increasingly heterogeneous, it is not easy to imitate, and is also difficult for others that are outside the organization to understand it (Choo and Bontis, 2002). The knowledge based perspective has emphasized that knowledge is an essential element in order to maintain the competitive advantage (Malhotra, 2000). MasterCard has also considered this fact, and is trying to give more knowledge to the employees so that they can understand all the facts associated with the organization in a better manner, and can play their role for the progress and growth of the company. MasterCard has also focused on provision of the knowledge because it has considered that knowledge plays a significant role in the success of an organization, and also helps in accomplishing all the tasks in the most effective manner.
Further, SWOT analysis is also visible in the case of MasterCard in a way that the company has recognized its strengths, weaknesses, opportunities, and threats. The company has recognized that the employees are its strengths, lack of knowledge and training of employees is its weaknesses, opportunity is the achievement of the competitive position in the marketplace by providing adequate training to employees, and threats are the changing patterns of market. So, in order to convert the weaknesses and the threats into the strengths and opportunities, MasterCard has planned strategically for giving training to the employees in order to make them aware of the new changes in the organization after initial public offering so that they keep the changes in their mind and accomplish the task in accordance with the latest needs and requirements of the organization. In order to make employees aware of all the aspects of the changes and for ensuring the competitive advantage in the organization, MasterCard has planned to provide training on Universal Opportunity, on ways of making money, and on new culture, new company, and new climate. The training on universal opportunity is provided so that employees can understand the opportunities and challenges that they can face in maintaining the competitive position in the industry. It is expected that the industry will make growth in the future, so MasterCard can use its resources, knowledge, and strengths in an effective manner in order to achieve growth and competitive position in the industry.
Long Term Strategic Plan
A long term strategic plan is required in order to hold the event. This is because the progress of an organization is based on the long term growth of the company (Grosser and Zeier, 2012). It is required so that employees of the organization can determine the position of the organization, where the organization is and what is needed more for ensuring organizational competitiveness. A long term strategic plan helps in ensuring success of the organization in future. Though it will not be effective in the short term, but in the long run it will pave the way to the progress and growth of the organization by identifying what is important for an organization to achieve for ensuring growth in the industry. Further, a strategic plan helps the in defining and explaining to the employees what they should achieve that is beneficial for the organization (Aguinis, 2009). A long term strategic plan is also required because it helps in making all individuals that are working in the organization accountable. It helps in the reduction of uncertainty by compelling the managers to anticipate, give importance to the impact of change so that in light of these changes work can be done in an effective manner. The strategic plan will help in the critical examination that will allow the employees consider the present methods that are used in the organization, face the challenges, finding the options for ensuring improvement, and finding the best options so that the problems can be solved in the best possible manner. It also helps in communicating the methods of allocating time, money, and the human capital so that all the resources are utilized in an effectual manner without sacrificing the operational efficiency of an organization. It will also help an organization to consider political, social, economic, and technological environment so that necessary changes can be adopted according to the external environment that will help in effective conduction of the operations. With the help of the work strategic plan, the work activities can be coordinated with the plan that in turn plays a useful role for solving the problems. It also helps in the development of the goals and plans, and also helps in the evaluation of the work efforts. Effective strategic plan improves the financial performance of an organization (Arasa and K'Obonyo, 2012). It also helps in improving the performance of the employees. MasterCard needs a long term strategic plan in order to improve its performance in all areas of the organization. However, the long term strategic plan is also required in MasterCard because it needs a plan for applying it to whole organization, and establishing the overall goals of the organization. The short term plan is not feasible in case of the MasterCard because short term goal focuses on the growth of an organization for a period of just one year, but in order to achieve a competitive position in the marketplace where the growth of industry is estimated as good, a long term strategic plan is required. Furthermore, the case is also indicating the fact that there is a need of establishment of overall goal for an organization so long term strategic plan is beneficial.
In the MasterCard’s strategic plan of giving training to the employees, it is decided to communicate face to face with the employees so that they can get the first hand information, and can also ask the questions from the seniors in order to clear their ambiguity. It is beneficial for employees because it helps them to consider the contingency factors that are associated with uncertain environment. So, it will help them to develop flexible and specific plans in order to deal with uncertainty. The plan, however, serves as a direction for the employees; it can change because of the changing conditions of the market (Robbins and Coulter, 2009). The training will make employees realize the fact that they should remain alert to the changes in environment, and should respond effectively when required. It will help them to ensure persistency in the planning so that performance of the employees can be improved. The training will also teach them how to develop the plans and set the goals. It will also teach them necessary skills such as critical analysis of the facts in order to solve the problems in most effectual manner.
Conclusion
On the basis of the Resource based perspective, employees are the assets of an organization, so MasterCard can enhance the skills of its asset i.e., employees and make them capable of better understanding the facts that are associated with the organizational changes after initial public offering. The company can consider the Knowledge based perspective The company can consider the knowledge based perspective in order to give sufficient knowledge to the employees so that they become aware of what is needed for the growth, progress, and improvement of financial condition of the company. The company can use SWOT analysis in order to analyze the areas that need improvement. The company can then effectively convert its weaknesses and threats into the strengths and opportunities for ensuring the progress in all the areas of organization.
Bibliography
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