A framework for strategy formulation based on clustering approach: A case study in a corporate organization

Abstract

Recent corporate organizations are significantly more complicated than ever. They are more distributed and networked, as supply chains, virtual organizations and corporate arrangements. By increasing the complexity of the decision making in dynamic competitive environment, managers need relevant strategic plans for their firms. In this paper, a new framework for strategic formulation based on clustering approach has been proposed to cope with these intricacies. After exploring internal and external factors influencing the goals of the organizational departments, the goal-factor matrices are formed based on their correlations. A clustering approach is applied to integrate goal-factor matrices to fulfill incorporate interactions among departments. Strategies would be formulated for clusters instead of departments individually or as organization totally. In fact, management by objective (MBO) has been substituted by management by cluster (MBC). The capability and usefulness of the proposed framework are shown through a case study in National Iranian Oil Company Training Center. Results indicate that the proposed strategic formulation outperforms other approaches and is very promising not only for solving the organization's problem, but also is appropriate for utilizing in other corporate organizations. © 2013 Elsevier B.V. All rights reserved.