The basis of any business has always been and is a strategic move. There are many factors that influence the strategy development process and its achievement. A well-chosen and adequately developed strategy is the vital determinant of accomplishment. This paper reveals the main mistakes and causes of strategy failures and describes one of them.
As it has already been mentioned, there is a list of factors that influence the strategic initiative:
- Unclear goals and conflicting priorities may cause failure. This is manifested in the absence of clear formulated or conflicting aims and conflicts over resources.
- The inefficiency of the company’s bosses, which is due to the lack of unity and values of the organization.
- Ineffective management styles, such as hierarchical approach and anti-confrontational style. They are caused by the manager’s intolerance of conflicts and the lack of a clear process of constructive disputes and their conduct up to the final decision.
- Incorrect coordination of the activities of independent divisions such as territorial, commercial or functional divisions.
- The lack of adequate training and development of senior staff which is expressed in the lack of opportunities for professional growth of employees.
- The lack of high-quality vertical communication. It implies the inability of management to convey information to subordinates clearly.
Thus, it can be conducted that there are many factors that affect the failure of strategies.
However, an example of a failed strategy is an attempt to digitalize the products and services of a General Electric company. This company created digital tools, inserted sensors into its products, and developed a powerful software program, but made a mistake in calculations for the future, which was the main reason for its failure. «High profile failures – from Generic Electric (GE), Ford to Proctor & Gamble (P&G) – have highlighted the lack of strategic communications or failure to define a clear roadmap to plan and execute the right steps as the main causes» (Li, 2020). As a result, it is possible to state that the main reason for their insolvency was the mistakes in preparing an action plan for the coming years.
Li, F. (2020). Leading digital transformation: three emerging approaches for managing the transition. International Journal of Operations & Production Management, 40(6), 809–817.