How Paying Attention to Weak Signals Improves Corporate Strategy Essay

July 31, 2018 Studying Tips

Weak signals in an organization referred to the initial signs of emerging issues whose details are not clear. Information received as weak signals is generally unstructured, partial and fragmented. When efficiently exploited, such data may turn out to be strategically valuable. As advanced indicators of future direction, the analysis of weak signals may have the potential to cause significant alignment between the organization's decision-making process and varying external circumstances. These forecasters of impending changes pose challenges of interpretation. This means that weak signals data can be transformed into significant knowledge for policy action. Nonetheless, it should be noted that the value of this information cannot be realized by itself, but it potentially necessitates a degree of flexibility when executing the collective cognitive framework to ensure that weak signals are noted, evaluated and acted upon in the development of policy that is more adaptive to the future unpredictable environments.

Importance of Paying Attention to Weak Signals Improve Corporate Strategy

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This section underscores the reasons why considering weak signals may improve corporate strategy. Detecting weak signals that are usually in form of unstructured, incomplete and fragmented raw information in an organization is important to the future operations of an organization (Hiltunen 2010). Such signal when thoroughly scrutinized, analyzed and transformed into an indicator of prospective strategic change can potentially spring the company to future growth and efficiency (Mendonça, Cardoso & Caraça 2005). The petroleum crisis experienced during the Arab Spring caught many nations and organizations by surprise since most firms failed to seriously act on the weak signals received during that period. Lack of planning and forecasting systems in an organization leads to such surprises whenever a change occurs in the business environment (Ansoff 1975). Some of the advantages of exploiting weak signals in an organization are discussed below.

Anticipates Future Change

Exploiting weak signals makes an organization be prepared to the future and the trends in the business world. The signals usually consist of advanced and imprecise symptoms of impending future problems or threats. This makes an organization adapt to the change in advance or develop response strategies for the changes. Weak signals also help organizations to innovate their approaches and future readiness by changing the status quo and adopting effective strategic management systems (Mendonça, Cardoso & Caraça 2005).

Detecting Opportunity and Threats

Through weak signals in the business organization, an organization is able to identify business opportunities available in the future that need to be exploited. The success of a company depends on how efficiently it exploits the available opportunities. For instance, during the petroleum crisis, other oil-producing countries not affected by the Arab Spring had an opportunity to maximize their production and increase their supplies. This means that when an organization has foresighted intelligent strategists and policy-makers, upon noticing an opportunity that comes as a weak signal it acts swiftly to adopt a corporate strategy in order to tap the opportunity (Ansoff 1975). This helps an organization to avoid taking rushed decisions when changes eventually take place. Whenever a weak signal that indicates an opportunity is taken up, an organization is likely to induce positive performance and financial results. Weak signals also help firms to detect threats that should be avoided. Failure to notice these signals and to take relevant actions may lead to negative results such as loss of customers, low sales, the high cost of production and stiff competition among other factors that result into low financial performance.

Better Strategic Planning and Forecasting

Corporate strategies are developed and adopted based on the business environment involving the company's strength, opportunities and threats. This calls for the identification of the strategic issues that need to be addressed through strategic decisions. Paying attention to weak signals helps to identify the strategic issues and the trends in the business environment for accurate forecasting and strategic planning. Weak signals are also instrumental in attracting the collective attention of all the stakeholders towards forecasting, planning and the development of new long-term visions (Ansoff 1975).

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How Paying Attention to Weak Signals Improves Corporate Strategy

Paying attention to weak signals helps to improve corporate strategy since it facilitates understanding of the foresight process as a framework. The framework encourages to appreciate the diversity of mindsets, to monitor emerging trends, to identify strong signals, to filter out the noise and to re-frame – to re-formulate strategies based on the new signal (Hiltunen 2010). Upon understanding the strategic issues connected to weak signals, an organization then takes actions that help avoid the paralysis of the operations and precipitated actions. At the same time, these actions should encourage structured and visionary interaction and engaging in adaptive decision-making.

Organizational foresight is a fundamental means that leads to the success of the social or organizational change process. Foresight is the framework to the improvement of future strategies to avoid extrapolation. It is noted that future planning processes instigated by weak signals help in contrasting the actual and desirable performances. To improve the performance of an organization, different information received from diverse sources, whether strong or weak signals, must be networked and be subjected to focused discussion during the decision-making process in order to transform the signal into more robust action plans (Ansoff 1975).

The weak signal appraisal is used to determine whether the received information requires a strategic action. This helps to separate weak signals from the mere noise that can result in an ambiguous activity. There is usually a tendency of dismissing weak signals since they are normally at variance with the main expectations of organizations (Mendonça, Cardoso & Caraça 2005). The appraisal is done based on the varying real-world situations and the process of weak signal appraisal involves identification of the signal, collective processing and objective consideration of the faint warnings of likely future change (Uskali 2005). In this aspect, a balanced combination of appraisal and analytical process helps an organization to identify the signals that warrant the change of corporate strategy, in which useful foresight tools for understanding weak signals must be linked to innovative strategizing.

Development of staff expertise – the new corporate strategy developed due to the exploitation of the weak signal is achieved through professional staff, with the right skills to execute the required duties. For instance, the rapidly changing technology is a signal that the technology considered modern today may be redundant tomorrow; therefore, there is constant need to continuously train proficient staff as part of corporate strategy. Education and training ensure business leadership as well as ensure that all duties are matched with the relevant skills (Ansoff 1975). The development of staff needs to be continuous, broad and accountable for action. This means that the improvement of corporate strategy also includes staff training and development to improve the productivity of the workforce while ensuring sustainability and retention of the workforce.

Conclusion

Weak signals received by organizations are usually unstructured, incomplete, fragmented, and may be inadvertent environmental data. These signs are usually ignored by business managers, mainly because they do not match the main signals that are easily identifiable. However, weak signals when properly exploited may result in the efficient corporate strategy that can enhance performance. Weak signals can be thoroughly scrutinized, analyzed and transformed into prospective strategic change indicators. The reasons of paying attention to weak signals include anticipation of future change, detection of opportunity to be tapped and threats to be avoided, and identification of possible improvements in strategic planning and forecasting. These are achieved through organizational foresight and proper appraisal of weak signals.

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