Evaluation of the Rational and Dynamic Approaches to Strategic Management

Strategic management is a not a new concept. It has defined as a management system which links strategic planning and decision making with the day-to-day business of operational management. Strategic management is not a simple, step by step process, but a complex and iterative process. Which needs hard work and dedication from many people in an organization to implement it toward the objective. It is the process for the leading members of an organization to forecast its future and develop the necessary procedures and operations to achieve its future. Strategic management is usually found in high levels of management to help organization gather, analyze and organize useful information to keep up with industry and competitive trends. The rational and dynamic approaches to strategic management are two different schools of thought. The rational approach is well-plan and more prescriptive on strategy selection. However, the dynamic approach is opposite.

What is Strategic management?

SM is the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes. Strategic management provides overall direction to the enterprise and involves specifying the organization’s objectives. Developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision making in the context of complex environments and competitive dynamics. Strategic management is not static in nature; the models often include a feedback loop to monitor execution and inform the next round of planning.

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Michael Porter identifies three principles underlying strategy: creating a “unique and valuable [market] position”, making trade-offs by choosing “what not to do”, and creating “fit” by aligning company activities with one another to support the chosen strategy. The corporate strategy involves answering a key question from a portfolio perspective: “What business should we be in?” Business strategy involves answering the question: “How shall we compete in this business?” In management theory and practice, a further distinction is often made between strategic management and operational management. Operational management is concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization’s strategy.

Evaluation of the Rational and Dynamic Approaches to Strategic Management

The choice for any of the two approaches can indirectly or directly link to the environment in which the organization operates or certain organizational factors that affect the application of strategic management approach. The favor is inclining to the dynamic approach because of the changing factors in the external environment. It is two of Disadvantages of the Rational Approach and Advantages of the Dynamic Approach.


The thought of rational strategic management supposes the environment of the organization facing is stable, small changes, and expectant. So, the organization can look forward to the market and the future. But today, the environment of the organization facing is not only complex but also less and less expectant. If the organization emphasizes the rational model, it may only concern with management efficiency and form strategic management excessively. Which will create a kind of the logjam of strategic management? The option of the dynamic approach is advance with the times and takes. The whole situation into account and plan accordingly.

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The disadvantage of the rational approach does not mean this approach is useless. No one can say the dynamic approach is useful to all strategies. The rational model promotes to consider the available alternatives. Evaluate all of the consequences of every alternative and choose the appropriate alternative. The positive impact on organization performance exists, but the organization can not only rely on the rational approach for positive performance. Therefore, some researchers suggest an integrated approach – hanging the rational approach and the dynamic approach together. Mintzgerg (1987) argues that realized strategy is always a combination of the rational approach and the dynamic approach. As the strategic management is a complex synergy of strategy, the integrated may result in a remarkable performance.

Strategic management is a science which is closely related to social science. The methodology of strategy formulation requires adapting to the nature of the scientific discipline. Only the organization practice some form of strategic making can survive, anticipating the unpredictability of external influences in an environment. What are the Components of a Strategy Statement?

Evaluation of the Rational and Dynamic Approaches to Strategic Management - ilearnlot

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