Post on 05-Apr-2018
8/2/2019 Fundamentals Lect 1
1/21
Managing StrategySession 1
Introduction to Strategic Management
8/2/2019 Fundamentals Lect 1
2/21
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
8/2/2019 Fundamentals Lect 1
3/21
Introduction to Strategic ManagementWhat is Strategy?
There is no one definition of strategy.
There are many competing definitions
There is no one definition that isuniversally accepted.
8/2/2019 Fundamentals Lect 1
4/21
Introduction to Strategic ManagementA Classical Definition of Strategy
the determination of the basic long-termgoals of an enterprise and the adoption of
courses of action and the allocation ofresources necessary for carrying out thesegoals.
Alfred D. Chandler, 1963
8/2/2019 Fundamentals Lect 1
5/21
Introduction to Strategic ManagementThe Classical View of Strategy
Earlier writers on strategy, like Chandler, 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.
Consequently, strategy development was viewed as a 'top-down'process.
Strategy had to be both deliberate & planned, with the strategicprocess divided into discrete stages that more or less followed a
certain sequential order.
This gave rise to what came to be called the 'systematic approachto strategy'.
8/2/2019 Fundamentals Lect 1
6/21
Introduction to Strategic ManagementThe Classical View: A critique
Since the 1980's the classical approach to strategy has comeunder increasing criticism.
One of the earliest & most influential critics was Henry Mintzberg.
He observed that whilst many organisations pursued intendedstrategies that were deliberate these strategies were often onlypartially realised or not realised at all.
Such strategies appeared to have emerged with or without priorintention or plan.
Strategy development could therefore be a bottom-up as well asa top-down process.
As a consequence, strategy development & implementation willmore likely occur simultaneously rather than sequentially.
8/2/2019 Fundamentals Lect 1
7/21
Introduction to Strategic ManagementThe 5 Ps of Strategy
Henry Mintzberg (1987)Distinguished between five different definitions of strategy :
Strategy as PlanConsciously intended course of action (deliberate);
Strategy as PloyA manoeuvre intended to outwit competitors;
Strategy as PatternA pattern in a stream of actions (emergent);
Strategy as PositionLocating an organisation in its environment ; Strategy as Perspective
An ingrained way of perceiving the world.
8/2/2019 Fundamentals Lect 1
8/21
Introduction to Strategic ManagementThe 5 P's of Strategy
Strategy as Planconsciously intended course of action, a guideline (or set of guidelines)
to deal with a situation.
By this definition, strategies have two essential characteristics:
They are made in advance of the action to which they apply,and
They are developed consciously & purposefully.
Strategy as a Ploy
a specific manoeuvre intended to outwit an opponent or competitor ...a corporation may threaten to expand plant capacity to discourage acompetitor from building a new plant. Here the real strategy is the threat,not the expansion itself, and as such is a ploy.
8/2/2019 Fundamentals Lect 1
9/21
Introduction to Strategic ManagementThe 5 P's of Strategy
Strategy as Pattern. Strategy is a pattern specifically, a pattern in a stream of
actions by this definition, strategy is consistency in
behaviour, whether or not intended.
Mintzberg distinguishes between:
Intended strategy & Realized strategy.
Deliberate strategies, where intentions were realized. Emergent strategies, where patterns are developed in
the absence of intentions, or despite them.
8/2/2019 Fundamentals Lect 1
10/21
Strategy as Pattern
RealisedStrategyUnrealised
Strategy
Mintzberg, 1987
8/2/2019 Fundamentals Lect 1
11/21
Introduction to Strategic ManagementThe 5 P's of Strategy
Strategy as PositionBy this definition, strategy becomes the mediating or match
between an organization and its environment, that is, between theinternal and the external context, this definition can be compatiblewith either (or all) of the preceding ones.
Strategy as Perspective
This definition views strategy not just as a chosen position but morean ingrained way of thinking.
In effect, when we are talking of strategy in this context, we areentering the realm of the collective mind individuals united bycommon thinking and/or behaviour, This is often referred to ascorporate culture.
8/2/2019 Fundamentals Lect 1
12/21
Introduction to Strategic ManagementThe Strategy Lenses
The strategy lenses are four different ways of looking
at issues of strategy development for an organisation.
Strategy as Design
Strategy as Experience Strategy as Ideas
Strategy as Discourse
Johnson et al, pp. 19
8/2/2019 Fundamentals Lect 1
13/21
The Strategy LensesStrategy as Design
Strategy as a deliberate, formal & systematic planningprocess.
A top down process that views strategy
development & implementation as separate & distinctstages in the process.
Foresight and strategic fit are key to success.
Examples : Chandler & Ansoff (Planning),
Andrews (Strategy as Fit),
Porter (Positioning),
8/2/2019 Fundamentals Lect 1
14/21
The Strategy LensesStrategy as Experience
Strategy as an emergent process.
Bottom-up as much as or more than top-down.
Strategy development & implementation are parallel &overlapping processes.
Flexibility & adaptability are key to success.
Examples : Mintzbeg (Pattern, Perspective), Quinn (Logical Incrementalism),
Pascal (Strategic Accommodation), Senge (Learning Organization),
Hamel & Prahalad (Strategy as Stretch).
8/2/2019 Fundamentals Lect 1
15/21
The Strategy LensesStrategy as Ideas
Strategy as the emergence of order & innovation fromthe variety & diversity which exist in & aroundorganizations.
New ideas emerge within & outside the organization in
competition with each other & battle for survival againstforces of conformity & commitment to past strategies(eg survival of fittest).
Diversity & variety key to success.
Examples:Brown & Eisenhardt (Competition on the Edge application of complexity theory& evolutionary theory), Eisenhardt & Sull (Strategy as simple rules), Stacey(Complex Responsive Processes)
8/2/2019 Fundamentals Lect 1
16/21
The Strategy LensesStrategy as Discourse
This views strategy development in terms of language as aresource for managers by which strategy is communicated,explained and sustained and through which managers can gaininfluence, power and establish their legitimacy and identity as
strategists.
Johnson, et al, pp.42
This suggests that concepts and models of strategyare less to do with substance and more to do withimage, identity and power.
Strategy development then becomes a meansthrough which the power and influence of seniormanagers and consultants may be enhanced andsustained.
8/2/2019 Fundamentals Lect 1
17/21
Introduction to Strategic ManagementA working definitionof Strategy
Strategy is the direction and scope of an
organisation over the long term, which achieves
advantage in a changing environment throughits configuration of resources and competenceswith the aim of fulfilling stakeholderexpectations.
Johnson et al, pp. 3
8/2/2019 Fundamentals Lect 1
18/21
Introduction to Strategic ManagementLevels of Strategy
Corporate-Level Strategiesis concerned with the overall purpose and scope of an organisation and
how value will be added to the different parts (business units) of theorganisation
Business-Level Strategies is about how to compete successfully in particular markets...A Strategic
Business Unit (SBU) is a part of an organisation for which there is adistinct external market for goods or services that is different fromanother SBU
Operational Strategiesare concerned with how the component parts of an organisation delivereffectively the corporate and business-level strategies in terms ofresources, processes and people
Johnson et al, pp. 7
8/2/2019 Fundamentals Lect 1
19/21
Introduction to Strategic ManagementThe Three Elements of Strategy
Strategic PositionIs concerned with the impact on strategy of the external
environment, an organisation's strategic capability (resources &competences) and the expectations and influence of stakeholders
Strategic ChoicesInvolve understanding the underlying bases for future strategy at
both the business unit (SBU) and corporate levels and the optionsfor developing strategy in terms of both the directions and methodsof development.
Strategy into ActionIs concerned with ensuring that the strategies are working in
practice.Johnson et al, pp. 13-16
8/2/2019 Fundamentals Lect 1
20/21
Introduction to Strategic ManagementStructure of Online Course
Course Modules
1. Strategic Process
2. Strategic Analysis
3. Strategic Options
4. Strategic Architecture
8/2/2019 Fundamentals Lect 1
21/21
Case Study 1The Honda Effect
Please read the two Honda case studies1. 'The Honda Effect (1)', based on the BCG Report;2. The Honda Effect (2), based on Pascales observations & analysis.
Discussion Questions
Compare & contrast these two accounts of Honda's entry into the USmotorcycle market :
1. What are the key differences between these two accounts ofHondas entry into the US motorcycle market?
2. To what extent was Hondas apparent strategy deliberate and/or
emergent?
3. What key lessons may be learned from any comparison of thesetwo quite different accounts of the same strategic decision?
Please Post Your Comments for DiscussionThese may be included in your Assessment Profile.
Address at least one question.