Final answer:
Strategic alignment occurs when a firm's organizational policies and practices are consistent with its strategy, leading to organizational effectiveness and potentially competitive advantage.
Step-by-step explanation:
When a firm adopts organizational policies and practices that are consistent with its strategy, this is referred to as strategic alignment. Strategic alignment ensures that the company’s actions are in sync with its strategic goals, leading to a unified direction across the organization. The benefits of strategic alignment include increased organizational effectiveness, as employees understand their role in contributing to the company's strategy, and improved operational efficiency, as resources are applied in the most impactful way. It could also potentially lead to a competitive advantage by differentiating the firm from its competitors through unique and coherent policies. For example, if a company decides to focus on customer service as a competitive differentiator, aligning its training, performance metrics, and rewards structures around customer service excellence would be part of this strategic alignment process.
Another example of strategic alignment may involve adopting flexible policies to navigate uncertainties, as suggested in section 20.5, or adjusting strategies according to the upshot on strategies outlined in section 20.6. These adjustments can help the firm to manage problems or predicaments, as mentioned in section 20.7, and maintain a strong strategic position.