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Fundamentals Lect 1

Fundamentals Lect 1

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Managing Strategy Session 1

Introduction to Strategic Management

Introduction to Strategic Management
This Session will explore:
 Alternative definitions of strategy


 

The four strategy lenses: ‘design, ‘experience’, ‘ideas’, and ‘discourse’
The different levels of strategy The main elements of strategy

  There are many competing definitions There is no one definition that is universally accepted. .Introduction to Strategic Management What is Strategy?  There is no one definition of strategy.

” Alfred D. 1963 . Chandler.Introduction to Strategic Management A Classical Definition of Strategy “…the determination of the basic long-term goals of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.

Strategy had to be both deliberate & planned. This gave rise to what came to be called the 'systematic approach to strategy'.  . Consequently. like Chandler. strategy development was viewed as a 'top-down' process. were mainly prescriptive & viewed strategy as part of a deliberate planning process. For strategy to be effective it needed to be both rational & logical & under the control of senior management. with the strategic process divided into discrete stages that more or less followed a certain sequential order.Introduction to Strategic Management The Classical View of Strategy     Earlier writers on strategy.

One of the earliest & most influential critics was Henry Mintzberg. strategy development & implementation will more likely occur simultaneously rather than sequentially. Such strategies appeared to have emerged with or without prior intention or plan. He observed that whilst many organisations pursued intended strategies that were deliberate these strategies were often only partially realised or not realised at all. As a consequence.    . Strategy development could therefore be a ‘bottom-up’ as well as a ‘top-down’ process.Introduction to Strategic Management The Classical View: A critique    Since the 1980's the classical approach to strategy has come under increasing criticism.

Strategy as Position Locating an organisation in its environment . Strategy as Perspective An ingrained way of perceiving the world. Strategy as Ploy A manoeuvre intended to outwit competitors. . Strategy as Pattern A pattern in a stream of actions (‘emergent’).Introduction to Strategic Management The 5 P’s of Strategy Henry Mintzberg (1987) Distinguished between five different definitions of strategy :      Strategy as Plan Consciously intended course of action (‘deliberate’).

” .Introduction to Strategic Management The 5 P's of Strategy Strategy as Plan “…consciously intended course of action. Here the real strategy is the threat. Strategy as a Ploy “…a specific ‘manoeuvre’ intended to outwit an opponent or competitor .. and They are developed consciously & purposefully.” By this definition.. not the expansion itself. a guideline (or set of guidelines) to deal with a situation. strategies have two essential characteristics:   They are made in advance of the action to which they apply. a corporation may threaten to expand plant capacity to discourage a competitor from building a new plant. and as such is a ploy.

Deliberate strategies. whether or not intended.Introduction to Strategic Management The 5 P's of Strategy Strategy as Pattern “…. a pattern in a stream of actions… by this definition. Emergent strategies. . where patterns are developed in the absence of intentions. or despite them. strategy is consistency in behaviour. Strategy is a pattern – specifically.” Mintzberg distinguishes between:    Intended strategy & Realized strategy. where intentions were realized.

Strategy as Pattern Unrealised Strategy Realised Strategy Mintzberg. 1987 .

” Strategy as Perspective This definition views strategy not just as a chosen position but more an ingrained way of thinking. we are entering the realm of the collective mind – individuals united by common thinking and/or behaviour. that is.” . when we are talking of strategy in this context. strategy becomes the mediating – or ‘match’ between an organization and its environment. between the internal and the external context….Introduction to Strategic Management The 5 P's of Strategy Strategy as Position “…By this definition. this definition can be compatible with either (or all) of the preceding ones. “…In effect.” This is often referred to as corporate ‘culture’.

Introduction to Strategic Management The Strategy Lenses “…The strategy lenses are four different ways of looking at issues of strategy development for an organisation. 19 .”  Strategy as Design    Strategy as Experience Strategy as Ideas Strategy as Discourse Johnson et al. pp.

Foresight and strategic ‘fit’ are key to success. Andrews (Strategy as Fit).  . Porter (Positioning). formal & systematic planning process. A ‘top – down’ process that views strategy development & implementation as separate & distinct stages in the process. Examples : Chandler & Ansoff (Planning).The Strategy Lenses Strategy as Design   Strategy as a deliberate.

Hamel & Prahalad (Strategy as Stretch). Quinn (Logical Incrementalism).The Strategy Lenses Strategy as Experience     Strategy as an emergent process. Pascal (Strategic Accommodation). Strategy development & implementation are parallel & overlapping processes. Senge (Learning Organization). Perspective). Examples : Mintzbeg (Pattern. Flexibility & adaptability are key to success. ‘Bottom-up’ as much as or more than ‘top-down’. .

New ideas emerge within & outside the organization in competition with each other & battle for survival against forces of conformity & commitment to past strategies (eg ‘survival of fittest’). Examples: Brown & Eisenhardt (“Competition on the Edge’ – application of complexity theory & evolutionary theory). Stacey (Complex Responsive Processes)  .The Strategy Lenses Strategy as Ideas   Strategy as the emergence of order & innovation from the variety & diversity which exist in & around organizations. Diversity & variety key to success. Eisenhardt & Sull (‘Strategy as simple rules’).

power and establish their legitimacy and identity as strategists.42  This suggests that concepts and models of strategy are less to do with substance and more to do with image. Strategy development then becomes a means through which the power and influence of senior managers and consultants may be enhanced and sustained.” Johnson.  . pp. explained and sustained and through which managers can gain influence.The Strategy Lenses Strategy as Discourse This views “…strategy development in terms of language as a resource’ for managers by which strategy is communicated. identity and power. et al.

pp. 3 .” Johnson et al.Introduction to Strategic Management A working definition of Strategy “Strategy is the direction and scope of an organisation over the long term. which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.

pp. 7 . processes and people” Johnson et al..A ‘Strategic Business Unit’ (SBU) is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU” Operational Strategies “…are concerned with how the component parts of an organisation deliver effectively the corporate and business-level strategies in terms of resources..Introduction to Strategic Management Levels of Strategy Corporate-Level Strategies “…is concerned with the overall purpose and scope of an organisation and how value will be added to the different parts (business units) of the organisation” Business-Level Strategies “… is about how to compete successfully in particular markets.

13-16 . pp.” Johnson et al. an organisation's strategic capability (resources & competences) and the expectations and influence of stakeholders” Strategic Choices “Involve understanding the underlying bases for future strategy at both the business unit (SBU) and corporate levels and the options for developing strategy in terms of both the directions and methods of development.Introduction to Strategic Management The Three Elements of Strategy Strategic Position “Is concerned with the impact on strategy of the external environment.” Strategy into Action “Is concerned with ensuring that the strategies are working in practice.

3. Strategic Process Strategic Analysis Strategic Options Strategic Architecture .Introduction to Strategic Management Structure of Online Course Course Modules 1. 2. 4.

What key lessons may be learned from any comparison of these two quite different accounts of the same strategic decision? Please Post Your Comments for Discussion These may be included in your ‘Assessment Profile’. Address at least one question. 'The Honda Effect (1)'. based on the BCG Report. What are the key differences between these two accounts of Honda’s entry into the US motorcycle market? 2. To what extent was Honda’s apparent strategy deliberate and/or emergent? 3. . 2. ‘The Honda Effect (2)’.Case Study 1 The Honda Effect Please read the two Honda case studies 1. based on Pascale’s observations & analysis. Discussion Questions Compare & contrast these two accounts of Honda's entry into the US motorcycle market : 1.

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