Competitive and Collaborative

Strategies
 General Environment
◦ Social, Technological, Economic, Ecological, and
political forces
 Task Environment
◦ Customer and buyer power, rivalry among
competitors, substitute products/services, and
potential new entrants
 Enacted Environment
◦ Managerial perceptions and representations of
the environment

19-
2
 Dynamism - the extent to which the
environment changes unpredictably
 Complexity - the number of significant
elements the organization must monitor
 Information Uncertainty - the extent to
which environmental information is
ambiguous
 Resource Dependence - the degree to
which an organization relies on other
organizations for resources

19-
3
 Low Resource Dependence High
Low Minimal
Moderate constraint
environmental constraint
and responsiveness
and need to be
to environment
responsive
Information to environment
Uncertainty
Maximal
Moderate constraint environmental constraint
and responsiveness and need to be responsive
to environment to environment
High
19-
4
 Uniqueness
◦ All organizations possess unique bundles of
resources and processes that represent the source
of competitive advantage
 Value
◦ Organizations that arrange their unique resources
and processes to produce products or services that
have value (low cost, desirable features)
 Difficult to Imitate
◦ Competitive advantage is sustainable when it is
difficult to duplicate

19-
5
 Current Current
Strategy Strategic Strategy
S1 Change S2
Plan
Current Current
Organization Implementation Organization
Design design
O1 O2

Step 1: Step 2:
Strategic Analysis Strategic Choice
19-
6
 Strategic Analysis
◦ Assess the readiness for change and top
management’s ability to carry out change
◦ Diagnose the Current Strategic Orientation
 Strategic Choice
◦ Top management determines the content of the
strategic change
 Designing the Strategic Change Plan
◦ Development of a comprehensive agenda to
achieve the change
 Implementing the Strategic Change Plan
The final step in the ISC process is the
actual implementation of the strategic
change plan

19-
7
 Merger - the integration of two
previously independent organizations
into a completely new organization

 Acquisition - the purchase of one

organization by another for integration
into the acquiring organization.

 Distinct from strategies for collaboration,

such as alliances and networks, because
at least one of the organizations ceases
to exist.

19-
8
 Diversification
 Vertical integration
 Gaining access to global markets,

technology, or other resources

 Achieving operational efficiencies,

improved innovation, or resource sharing

19-
9
 Pre-combination Phase
◦ The organization must identify a candidate
organization, work with it to gather
information about each other, and plan the
implementation and integration activities
 Legal Combination Phase
◦ The two organizations settle on the terms of
the deal, gain approval from regulatory
agencies and shareholders, and file
appropriate legal documents
 Operational Combination Phase
◦ Implementing the operational, technical and
cultural integration activities
19-
10
 Involve two or more organizations who agree to
work together to achieve their objectives
 Align and coordinate organization strategies, goals,
structures, and processes as they become
interdependent
 Allow organizations to perform tasks that are too
costly and complicated for single organizations to
perform

 Also known as transorganizational systems,

including alliances and networks

19-
11
 When two organizations formally agree to
pursue a set of goals
 There is sharing of resources, intellectual
property, people, capital, technology,
capabilities or physical assets
 Common alliances are licensing agreements,
franchises, long-term contracts, and joint
ventures

19-
12
 Alliance Strategy Formulation
◦ Clarify the business strategy and why an
alliance is needed
 Partner Selection
◦ Leverage similarities and differences to create
competitive advantage
 Alliance Structuring and Start-up
◦ Build and leverage trust in the relationship
 Alliance Operation and Adjustment

19-
13
 Involves three or more companies joined
together for a common purpose
 Each organization in the network has
goals related to the network as well as
those focused on self-interest
 Characterized by two types of change:
creating the initial network
(transorganizational development) and
managing change within an established
network

19-
14
Identification Convention Organization Evaluation

Who should Should a TS How to organize

for task How is the TS
belong to the be created? performing?
performance?
transorganizational • Costs and • Communication • Performance
System (TS)? benefits • Leadership outcomes
• Relevant skills, • Task • Policies and • Quality of
knowledge, perceptions procedures interaction
and resources • Member
• Key stakeholders
satisfaction

19-
15
 Create instability in the network
 Manage the tipping point

◦ The Law of the Few

◦ Stickiness
◦ The Power of Context
 Rely on self-organization

19-
16