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An Introduction to Strategy

Kevin Hinde
Aims

 Introduce the economic problem of scarcity


and relate this to the concept of strategy.
 Explore the meaning of organisational
strategy and competitive strategy.
 Investigate the processes by which strategy
is formulated within the organisation.
Learning Outcomes
 Summarise the economic problem and
relate this to the issue of strategy through a
self-assessment activity.
 Analyse the various definitions of strategy
and critically consider which is more
appropriate to your organisation.
 Critically examine the meaning of strategic
management and contrast this with a
‘Rationalist ‘ perspective via note taking.
The Economic Problem of Scarcity

 Insatiable
Wants
 Scarce Resources
 Choices
 Opportunity Cost
Marvellous Markets?

 Markets are complex social institutions


where exchange takes place.
 Markets can fail to function properly
(Market Failure)
– Information Asymmetry
– Market Dominance
– Externalities
 We will look at Information.
Information Asymmetry
 Differences between simple and complex
exchange.
 Contrast buying a newspaper with the purchase of a
road.
 Information problems with complex
exchange.
 Opportunism and the ‘hold up’ problem
 resolved by quasi-market behaviour or integration

 Whatever happened to ‘Trust’?


Marvellous Government?

 Do
we always need regulation when
markets fail?
 Self-regulation
 market adjustment mechanisms
 Do we need Government to provide ‘public
goods’?
 What about the ‘merit good’ argument?
 How good is government?
Summary so far……..
How does strategy fit in?

 strategyis the process by which individuals


and organisations make choices about
scarce resources so as to satisfy wants
over time in an environment of uncertainty.
They are aided in this process by market
and non-market forces.
Organisational Strategy
– “A strategy is defined as a pattern, of purposes,
policies, programmes, actions, decisions, or
resource allocations that define what an
organisation is, what it does, and why it does it.
Strategies can vary by level function, and by
time frame.”
(Bryson, 1995, p.32)
Competitive Strategy
– Strategy is the direction and scope of an
organisation over the long term: which achieves
advantage for the organisation through its
configuration of resources within a changing
environment, to meet the needs of markets and to
fulfil stakeholder expectations”
(Johnson and Scholes, 1999. p.10).
Mintzberg’s 5 P’s

 Strategy can be characterised as a


 Ploy Outwitting a rival
 Position Place in the market
 Perspective A powerful group
 Plan A consciously intended course
 Pattern of action, general or specific
Forces determining Strategy affect
Intentions and realisations

Emergent Strategies

Intended Realised
strategy strategy

Unrealised
strategy

Intended, emergent and realised strategies


Planning and Strategic
Management.
– "[Strategic management] is a means of
understanding the strategic position of the
organisation: formulating courses of action,
evaluating them and choosing between them; as
well as planning how the choice of strategy can
be put into effect and managing the resultant
changes." Johnson and Scholes (1994)
Planning and Strategic
Management.

 planning is a sequence of analytical and


evaluative procedures to formulate an
intended strategy and the means of
implementing it. (Johnson and Scholes,
1999)
 is Planning unconcerned with emergent
strategy?
And Finally….

 Summary
 Have you covered the learning activities?
 Any questions?

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