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What is Strategy?

Process and Content

Relaxation of the the rigidities in economics in the 1980’s has put economics back in the forefront as a solid theoretical foundation for strategy History leads to a very young field of research with little in the way of “accepted” principles and theories . Pyschology.History of Strategy?    Rooted in the Military Originated in business with the emergence of the business schools (Wharton and Harvard) First known as Business Policy     Real research in the area of “strategic management” only really began to take shape in the 1970’s Technically economics is the grounding for strategic management theory    Used as a capstone course to bring business functions together Had little grounding in its own theory Rigid structure of neoclassical economics did not serve empirical evidence of firm performance well which lead to other disciplines such as sociology. political sceince. and institutional theory as “alternative” explanations for strategy.

Purpose of Strategy?  What is the ultimate goal of strategy  Maximize shareholder value  “Monopoly” power  Bigger can be better  Profits – above average  Success – but what is success?     for a firm? Staying in business/survival Does strategy imply or require exploitation of other? Tactics Defn  How do we position ourselves to achieve sustainable above average profits in the long run .

What is Strategy?  Hierarchical Definition  What is it?     Strengths       Part of a 4 stage model Defines how you achieve mission/objectives Plan – write it down/implement/achieve objectives Specific goals Less abstract Provides structure Context to take great ideas to action Pushes you toward implementation – attention to resource allocation Weaknesses    Excludes external environment More static than dynamic Less flexibility .

position  Strengths  Weaknesses .What is Strategy?  Eclectic  What Definition is it?  Multiple aspects – plan. pattern. perspective/perception (how you see yourself). ploy (tactics).

also looking at environment  Makes you look at your strengths/weaknesses  Effective at helping make decisions   Weaknesses Assumes firms can predict environment  Leaves a void of “what to do about SWOT”  .What is Strategy?  Matching  What is it?   Definition Take a look at threats/opportunities and define strategies to take advantage of threats and minimize weaknesses Strengths Not just considering inside firm.

Deliberate versus Emergent Strategies In t St end ra ed te gy Del iber ate Unrealized Strategy S t ra tegy Realized Strategy Sustained Superior Performance Emergent Strategy Adapted from: Mintzberg. . Volume 30 Number1. Fall 1987. H. “The Strategy Concept I: Five Ps for Strategy” California Management Review.

Vision and Mission External Analysis Opportunities and Threats Strategic Choice SWOT Internal Analysis Strengths and Weaknesses Business Strategy Strategy Implementation/Tactics Organizational Structure Feedback Succession Planning Designing Control Systems .

and others use strategy concepts to help firms improve decision-making  Expect you to do some reading on the theory to help with background as we explore application of the concepts  . Allan.Where Are We Headed?  Not focused on business strategy research Theory development  Empirical testing of Theory   Application of Strategy and Strategic Management Process to Decision-making How Mike.