Comparison between Environmental determinism, strategic choice and stakeholder approach

 

Stakeholder approach 

 

According to stakeholder theory, organizations have a responsibility to look out for the interests of all stakeholders. Anybody who will be affected by the organizations' operations is referred to as a stakeholder. Any firm must produce value for customers, suppliers, staff, communities, investors, and shareholders in order to be successful. It states that you cannot consider any of the stakes or stakeholders in alone. Their interests must match: what is good for customers must also be good for suppliers, and what is good for shareholders must also be good for communities. A manager's or entrepreneur's task is to work out how to match up the interests of customers, suppliers, communities, employees, and financiers.

Environmental determinism

The I/O model is also known as environmental determinism. According to the industry organization model, a firm's ability to gain a competitive advantage is entirely dependent on the external environment rather than the internal environment. This says that in order to generate above-average returns, strategy is decided by the external forces and limits. In order to implement strategy, it also requires that resources are highly movable among firms. This says that when developing a plan, you must take into account all external circumstances. First, I'll need to research the external environment, which includes the general environment, industry environment, and competitor environment. However, in particular, we have properly researched the industry environment in accordance with this model. After researching the external environment, I will be able to determine which sector will be worth to invest in, and I will choose an industry based on that information. In the third step, I'll need to develop a plan for the industry in which I'll be operating in order to generate above-average returns. In order to implement the approach, I'll need to acquire or develop assets and talents in the fourth step. Finally, the plan will be implemented using the talents and assets that the company has created or acquired.

Strategic Choice

The resource-based view model is also known as strategic choice. As to the resource-based view model, a firm's ability to gain a competitive advantage is entirely dependent on its internal rather than external environment. Since everyone's exterior environment is the same. This is focused on the internal firm and believes that competitive advantage is achieved by utilizing internal firm resources and skills rather than external forces. The resource-based view paradigm evaluates the firm's strengths and weaknesses. The second stage reveals the firm's strengths that are higher than those of its rivals. Then it decides if any of the firm's resources and talents can give it a competitive advantage in the third step. The fourth step requires the company to choose an industry with a strong profit potential. In the last phase, businesses must create and implement a plan for earning above-average returns via the effective use of their resources and talents.