MPM8107: Strategic

Management for Public

Sector Organizations
Dr. Ben Ngoye
Session 5

The strategic planning process: Looking inwards

Why look inward?
The SW in SWOT Analysis
Internal analysis: Strategic
capability
 Resources and competences needed to survive and prosper

Resources Competences (skills,

abilities, activities,
processes)
Threshold capabilities Threshold resources Threshold – skills and
• Tangible (Physical, abilities by which
Financial, HR) resources are deployed
• Intangible to meet minimum client
(intellectual, requirements
reputational)
Capabilities for Unique resources Core competences
competitive advantage (Tangible & Intangible)
Diagnosing strategic capability
- Benchmarking
 Historical benchmarking

 Industry/sector benchmarking

 Best-in-class benchmarking
Capabilities for
achieving and
sustaining competitive
advantage
 Barney and VRIN
resources/capabilities
 Valuable
 Rare
 Inimitable
 Non-substitutable

 …
The money question: Management
of costs as a key strategic capability
 Strategic Cost Analysis…
Econ. of  Product performance relative to the
scale
competition/past history
 Current market position
 Value chain and cost analysis

Supply Cost Experience

efficiency
costs
 Linking Public Finance to Strategy
 GUEST LECTURE

Product/
Process
design
The big idea with product offering, cost
structure and financial performance…

 What do we do?
 How do the things we do connect to each other?
 Which ones do we do well (in relation to others? To our past?)?
 What about our financial health? Do we have the capacity to follow through on any
improvements/tweaks/new ventures?
Internal analysis: Human
capital - Dynamic capabilities
 Ability to renew and recreate strategic capabilities to meet the needs of a changing
environment
 Requires alertness to recognize and realize value
 Requires judgment - Decision making therefore critical to the definition of capabilities. So…
 adaptive aspirations and expectations,
 routines, information processing,
 interdependence, organizational coalitions,
 organizational learning, problemistic search,
 sequential decision making, sub goal pursuit, satisficing, uncertainty avoidance

 Resources and capabilities as programmatic, involving elements of tacit knowledge, and

embedded in routines
 specialization, learning-by-doing, and intrafirm knowledge creation lead to an excess
capacity of resources
Relating
dynamic and
operational
capabilities
Class task: Develop a draft tool that
can be used to assess affirms
dynamic capabilities…
Beyond dynamic and operational
capability 1 - Capacity Balance

Programmatic

Adaptive Organizational
Beyond dynamic and operational
capability 2 -Capacity Alignment

Programmatic Programmatic

Organizational

Adaptive

Adaptive Organizational
The big idea with human and other
resources/service capabilities…
 Available?
 If not available, readily acquired?
 If available, fully utilized?
Syndicate Integrative
Assignment
 Session 6: Pine Street Case
 Incorporate all that we have learnt on Strategic Direction, Internal and External
Analysis

 This will be a marked assignment.

Syndicate Integrative
Assignment: Pine Street
 Let’s examine the case in light of what we have learnt so far…
 What are the environmental (PESTEL, Other) influences?
 The key drivers for the change in strategy?
 Possible scenarios regarding the evolution of the business environment?
 Who are Pine Street’s strategic groups and competitors?
 Can you describe Pine Street’s market segment(s)?
 Strategic customer and critical success factors?
 What strengths and weaknesses do you observe in Pine Street?
 What Opportunities and what Threats do you foresee?
 Can you describe and apply an analytic and a visioning approach to strategy as it relates to Pine Street?

 What should Downie do?

 Consider:
 The external environment?
 Possible scenarios?
 Internal resources, capabilities, competencies?
 SWOT?
 The options?
MPPM strategy
Dr. Ben Ngoye
SUPPLEMENTARY SLIDES
Developing dynamic capabilities at
organizational level: Characteristics
of Learning organizations
 Shared vision
 Motivates learning

 Mental models
 Assumptions. Those unwanted need to be challenged
and unlearned
 Team learning
 Accumulation of individual learning
 Requires open communication and dev. of shared
understanding
 Personal mastery
 Individual commitment to learning
 Through staff training and development

 Systems thinking
 Perspective>>>problems as bit-parts
 Supportive, integrative info system that shows the
parts and the whole
Managing strategic capability
 Developing strategic capability
 Adding and changing capabilities
 Extending capabilities (from one unit to another)
 Stretching capabilities (to build new products or services)
 Entrepreneurial bricolage
 Developing or learning new capabilities (from external sources)
 Ceasing activities
 Managing people for capability development
 Targeted training
 Staffing
 Organization learning

 Challenges in managing strategic capabilities

 Competences not valued
 Competences valued but not understood