Page 10 - CIMA SCS Workbook August 2018 - Day 2 Suggested Solutions

SUGGESTED SOLUTIONS

It is also referred to as the bottom up approach.

Decision makers have an idea of what they want to achieve over a defined period of time, but do
not invest significant time in detailed research and planning; instead, they develop a strategy in
overview, but the detail only emerges as time passes. As circumstances become clearer, so the
strategy may adapt and, ultimately, the business remains much more flexible in what it does.

It is more appropriate to adopt this approach in a dynamic industry, where change can be
constant and have a significant impact. In such circumstances it is critical to the business that it is
flexible and can adapt quickly to its environment.

For an organisation such as FNG, this approach would not have been relevant historically; it is only
with the benefit of hindsight that we can appreciate the impact that advances in technology have
had on our industry. Is the industry likely to experience such disruption again in the near future?
With the emphasis much more on digital technology now than on the historic printed news of the
past, it is difficult to assess the likelihood of such an overhaul of how people access news in the
near future as anything other than remote. But the possibility should not be ignored.

Freewheeling opportunism

This approach to strategy essentially means that it does not happen – the company does not
invest time in formulating plans for the future; rather, it simply operates on a day by day basis,
and decision makers follow their instinct as and when circumstances arise.

This approach would not be suitable for FNG, as it is too large and complex, and stakeholders
would demand to see evidence of forward planning in some form.

Recommendation

FNG should learn from its experience of the last few years, and adapt the way that it considers the
future. It should also develop a considered response for its forthcoming meeting with Allied
Investments in order to provide the reassurance given.

It is probable that a mix of both the emergent and rational approaches to strategy are required
over the next few years as the company moves to being a much more digitally-focused business.
Detailed plans should be created, but the Board should be alert to any signs of change and
prepared to react to them instantly.

Scenario planning and other methods of contingency thinking should be considered as valuable
supplements to the strategic planning process.

FNG structure

The current structure of FNG can best be described as functional in its configuration. The principal
functions of the business are headed up by a Board Director (Finance, Sales & Advertising, HR etc.)
and that individual looks after a team who work purely in that discipline – i.e. the finance function
is staffed by those who look after the financial aspects of the organisation.

Such a structure is typical of an organisation that is not well-diversified; FNG is a newspaper
publisher, both in print and digital form, but has not expanded into completely different areas of
industry.

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