Porter's Management Theory Essay Example | Topics and Well Written Essays - 2000 words

Porter's Management Theory - Essay Example The book, which has been published in nineteen languages and re-printed approaching sixty times, changed the way business leaders' minds worked. Further, it remains a guide of choice for strategic managers on a global scale. Apart from being rich in lessons about why and how industries, regions, and nations succeed or fail, this book is of great value as the first serious attempt to develop a really original grand theory of national economic development processes since the early years of Postwar development economics, and one of the most original ways of thinking about development policy in years. This brings us to a discussion on the technicalities of the model proposed by Porter. Porter's Five Forces model provides suggested points under each main heading. When taken into consideration individually, each of these gives rise to the development of a broad and sophisticated analysis of competitive position. This may further be used during the creation of a strategy, plans, or even where making investment decisions about a business or organization is concerned. These five competitive forces determine industry profitability and attractiveness apart from being responsible for shaping the prices that firms can charge, the costs they have to bear, and the required investments to engage in industry level competition. We are concerned with the fact that Porter's essentially ahistorical approach cannot provide a full account of either a nation's competitive advantage and corporate strategies or the growth and development of industrial clusters. For this, let us first understand competitive advantage. Competitive advantage is the response of afirm to the pressing need to organize and perform discrete activities. While these needs may not be perpetually spelt out, it is the responsibility of the planners and executers of policies to foresee such situations when catering for growth and development of the firm n various levels. So does this mean that we are dealing with changes and issues only on an individual level and not a national level The basic explanation for this comes from the fact that any change on an individual level is effected by changes on a national level. Yet, Porter's theory cannot accommodate strategies and competitiveness at such levels due to various constraints. The first of these emerges from the fact that people run businesses and economies - and everyone has his or her own unique style. These cannot be covered at length when talking which factors and resources will be utilized in which combination. Thus Porter's theory does not provide an accurate account of the diversity and dynamism in the corporate and commercial environment that businesses and firms thrive in. Secondly, there are various activities to take into consideration. The activities performed when competing in a particular industry can be grouped into categories, as these activities can be divided broadly into primary activities and support activities. It has been noted that primary activities are those involved in the ongoing production, marketing, delivery, and servicing of the product.