Fundamentals Lect 1

8/2/2019 Fundamentals Lect 1

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Managing StrategySession 1

Introduction to Strategic Management


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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


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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.


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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


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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'.


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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.


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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.


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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.


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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.


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Strategy as Pattern

RealisedStrategyUnrealised

Strategy

Mintzberg, 1987


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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.


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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


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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),


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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).


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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)


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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.


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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.



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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



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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


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Introduction to Strategic ManagementStructure of Online Course

Course Modules

1. Strategic Process

2. Strategic Analysis

3. Strategic Options

4. Strategic Architecture


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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.

Fundamentals Lect 1

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