Improved Global Competitiveness on the Basis of New Business Models Influenced by Dynamic Strategic Thinking

Improved Global Competitiveness on the Basis of New Business Models Influenced by Dynamic Strategic Thinking

Drago Dubrovski (International School for Social and Business Studies, Celje, Slovenia)
DOI: 10.4018/978-1-7998-4552-2.ch011
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Abstract

In modern business, dynamic changes in the environment (macro trends) provoke changes within the company. Companies can protect themselves from latent, acute crises. In addition, companies can navigate a turbulent environment while ensuring organizational existence and development. Organizational forms and characteristics, as well as business models to maintain or increase existence and create competitive advantages in the global market, are increasingly sought in a more creative manner. These actions are based on dynamic strategic thinking. Revolutionary methods are often required for the creation and adaptation of competitive business models. The data from companies that face a current crisis show a gap between the need to change business models and the introduction of adapted business models to achieve the desired level of competitiveness.
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Introduction

Increasing intensity and dynamics of events and developments, within both the organization and its environment, result in difficulties and complexities in competitiveness. Consequently, it impacts the existence and development of the organization. Over the last 20 years, the business environment has become a highly turbulent field. Rapid and substantial changes are obstacles to achieving organizational goals (McCarthy, Serban, & Rouse, 2016). This has impacted the theory and practice of modern leadership and management.

In the past, managers relied on general managerial approaches with a certain level of predictability and order. This presumption, which is based on Newtonian science as the basis of scientific management, stimulates simplifications. It thrives in regulated conditions. However, simplifications are no longer useful due to changing conditions.

Both nonlinearity (nonproportionality) of events and cause and effect relationships (and their dynamic, complex, and unsure nature) make it difficult for managers to plan their long-term development. It is hard to predict monthly or yearly changes in the environment. However, said changes can alter the circumstances or position in which the business processes are evolving. If short- and long-term plans for the strategic developmental direction, when prepared based on the circumstances in which business processes were carried out in a certain environment and period, should fail to suffice or be directly useful, the vision of the company becomes even more important.

As events in the environment become increasingly intense, less linear, and less predicted or predictable, it is important to monitor the events and adapt the company (active vs. reactive or evolutionary vs. revolutionary) to said changes, especially if the company is involved in international relations. One example includes marketers who can no longer rely on the traditional presupposition that a positive starting point or market result will automatically cause the best financial outcomes. Another example is significant investments in promotions that will not bring about corresponding sales. A final example is the launching of a product that does not automatically mean larger company income. However, this puts management in a position of constant vigilance and readiness to implement change. A passive approach cannot be successful. This holds true for developed systems and processes of monitoring the development of the environment. It also applies to their introduction into the organization and adaptation to perceived changes.

Due to their exhausted content and rigidity, many methods and techniques related to macroeconomic prediction have become useless and counterproductive. The current developmental discontinuities are completely different than the period of relatively stable conditions. This is the basis for the Newtonian mechanistic conceptualizations of the function of economic principles, which states that there is a clearly defined cause for every consequence. This is particularly true for the period following 2007, when the multifaceted consequences of the global economic and financial crisis (development discontinuities) became obvious.

Modern, high-quality strategic management is increasingly important for a successful and efficient company. Strategic decisions involve a broad spectrum of operating opportunities. These must be adopted under increasingly precarious circumstances that require constant managerial attention and activity. The key task of strategic management is to create a business model with which an organization can ensure its existence and competitive development. This is one of the fundamental objectives of the organization.

The development of information and communication technology (ICT) may bring about the false idea that managerial decisions can be replaced by ready-made technological solutions. Any progress in the field of ICT will support managerial decisions. However, it cannot replace subjective managerial judgments and decisions, regardless of the degree of sophistication of the technological solutions. It is dangerous to rely on strategic decisions being adopted “outside” of the strategic managerial judgment or use this as an excuse for decisions.

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