Difference Between Operational Effectiveness And Strategy

The root cause of the problem is the failure due to distinguish between operational effectiveness and strategy. There are different management tools and techniques like total quality management, benchmarking, time-based competition, outsourcing, partnering, reengineering, change management that are used to enhance and improve the operational effectiveness of a company and fails to provide sustainable profitability to the company. Management tools have replaced strategy.
 Operational Effectiveness: Necessary but Not Sufficient.
Operational effectiveness and strategy are necessary for the superior performance of an organization they work in different ways.
• Operational Effectiveness:
Performing similar activities better than rivals perform …show more content…
While operational effectiveness is about achieving excellence in individual activities, or functions, strategy is about combining activities.
Strategy involves creating fit among a company’s activities. Fit has to do with the ways a company’s activity interact and reinforce one another. Fit is important because discrete activities often affect one another.
Types of fits :
There are three types of fits
• First order fit it is simple consistency between each activity (function)and the overall strategy. Vanguard, for example, aligns all activities with its low-cost strategy.
• Second order fit occurs when activities are reinforcing. Neutrogena, for example, markets to upscale hotels eager to offer their guests a soap recommended by dermatologists.
• Third order fit goes beyond activity reinforcement to what I call optimization of effort (reducing redundancy and waste).
In all three types of fit the competitive grows out of the entire system of activities. Strategy is creating fit among a company’s activities. The fit among activities substantially reduces cost or increases