Over the past couple of posts, I have looked at different types of business analysis. Of course, analysis is only part of the picture of business management, there is also a strategic process. Strategy goes on at all levels of an organisation all the time. As the diagram below shows, strategies can exist at corporate, business or functional levels.
Most large businesses have a clearly verbalised mission which rarely changes and any strategic work that they do on a day-to-day basis will be focused on achieving this mission. Therefore, modern businesses are very aware of strategic alignment. This simply means that any strategic activity which takes place which is not at the level of changing the overall strategy or mission of the business needs to align with the bigger picture which already exists.
Businesses often suffer the basic structural dilemma of how much autonomy to allow lower order units in implementing the overall strategy. For example, the question of how much independence the main board gives subsidiary boards in implementing their strategies.
Organisations can either deal with this dilemma by centralising the decision making processes or decentralising it so that the managers at each business unit make the decisions. This will be a significant consideration for you when dealing with clients that are business units or larger organisations as to identifying who the actual decision makers are.
The more clear employees and customers are on what a business stands for and how things are ‘done around here’, the quicker the business can react to changes because there is a better instinctive understanding of what to do. This is really important in large businesses, because it is not possible to seek consensus on every decision from every level of the organisation. As long as senior management has made it clear what the business’ overall strategy is and how this works in practice, employees can be fairly comfortable, when making decisions that affect the organisation that they are acting in a way which reflects, rather than conflicts with, this overall strategy.
Legal professionals involvement in businesses
Much of the advice that businesses seek from legal firms will be as result of strategic change or activity. Often, managers will require legal advice in connection with the implementation of their plans. Some examples of such situations may be:
- managers may need advice about new contracts with suppliers, staff or customers;
- businesses may want help with acquiring property, other businesses or entering into a joint venture;
- a referral to the Competition and Markets Authority;
- a recession may have led to the need to make staff redundant;
- setting up a new business vehicle to enter into a new marketplace; and
- understanding the legislation to set up a new division of the business overseas.
For all of these reasons, and many more, lawyers are an essential part of the business process, particularly where strategic activity is involved. As such, having a good understanding of this area will ensure that you are able to provide appropriate, considered, timely and cost efficient advice.