STRATEGIC MANAGEMENT– workshop on strategy B.V.L.NARAYANA SPTM/ RSC/BRC– 24-01-2009.
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STRATEGIC MANAGEMENT– workshop on strategy
B.V.L.NARAYANA
SPTM/ RSC/BRC– 24-01-2009
OBJECTIVE
• To develop an understanding of strategic management concepts
• To develop an understanding of evolution of the field of strategic management and business enterprise perspective
• To link it and understand case method of pedagogy
Evolution of the Concept
Source: Bracker J (1980) The Historical Development of the Strategic Management Concept, AMR, 5, 2, 219-224
Strategic management
• Set of managerial decisions that determine the long term performance of a firm
• --- Wheelan and hunger (2002)
• Entails the analysis of external and internal environments of a firm to maximize the effective use of resources in relation to its objectives–
• Bracker 2001
Chronological evolution
Descriptor 1950’s and 1960’s 1970’s 1980’s 1990’s 21st century
Environment Stable Dynamic complex Dynamic complexHighly
dynamicHypercompetitive
FocusContentTop management
ContentTop management
ContentTop management
Process,Organisation
ProcessOrganisation
Decision makingRational,
synopticRational synoptic
Rational, participative
Contextdependent
Context dependent
View of Implementation
DistinctGiven
DistinctGiven
DistinctGiven
Integrated Integrated
Research Processual ,
longitudinal Cross sectional
Cross sectional ProcessualLongitudinal
ProcessualLongitudinal
Dominant school Design Planning PositioningCulturalLearning
Learning, Organic
Strategy paradigm
Static, exploitOpportunities,
Static, detailed planning
Static, position defense
Static, adaptive
Dynamic adaptive
Adapted from Pettigrew et al (2002), Whittington (2002), Gould and Campbell (1993)
Strategy definitions
• Mintzberg 1979-• A mediating force between the organization and
environment: consistent patterns in streams of organizational decisions to deal with the environment.
• Andrews(1970)pattern of objectives, purposes, or goals stated in such a way so as to define what business the company is in or is to be in and the kind of company it is or to be
• Chandler 1962: strategy is the determinator of the basic long term goals of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.
Concepts
• Process is– Sequence of events, actions and activities unfolding over time in a
context ( Pettigrew 1997) • Content is
– matter dealt in a field of study (Merriam Webster dictionary 2007)
• Content • Answers question “ what”
• Process • Answers question “how and why” (Van de ven and Huber 1990)
• Resource: is an asset, competency, process, skill or knowledge over which control is maintained (Wheelen and Hunger 2001, pp81)
Components of Strategy
Context(why/where?)
Process(how?)
Content(what?)
The Firm
Conceptualization
Environment
‘Possessions’
‘Possessions’
Environment
The Firm
‘Possessions’
‘Possessions’
Time t = 0 Time t = 1
Strategy -- definitions
Decision Making
Strategic
Tactical
Operational
Are Rare, consequential and directive
Source: Hambrick and Fredrickson, 2001, Are you sure you have a strategy?, Academy of Management Executive, 15, 4
Source: Hambrick and Fredrickson, 2001, Are you sure you have a strategy?, Academy of Management Executive, 15, 4
Context:Strategic Analysis
Content:Strategic
Choice
Process:Strategy
Implementation
The environment
Culture and stakeholderexpectations Resources
and strategiccapabilities
Planning and
allocating
resources
Firm structure
and design
Managing
strategic change
Identifying
strategic options
Evaluating options
Selecting strategy
Components of Strategy
Strategy Hierarchy
© Prentice Hall, 2006
Tools for Managing Strategy
• TOWS Matrix
• BCG Matrix
• Ansoff’s Growth Matrix
• Industry Attractiveness Business Strength Matrix
• Porter’s Five Forces Model
• Porter’s Generic Strategies
• Core Competence
TOWS Matrix (from SWOT Analysis)
© Prentice Hall, 2006
Portfolio Analysis
© Boston Consulting Group
Ansoff’s Growth Matrix
Industry Attractiveness Business Strength Matrix
© General Electric
Porter’s Five Forces Model
© Porter M. E, 1980
Porter’s Generic Strategies
© Porter M. E, 1980
Core Competence of Corporation
Difficult to Imitate by
competition
Wide Access to Markets
Add value to the customer
Core Competence
Idea © C.K. Prahalad and Gary Hamel, 1990
Resource based view
Strategy
Competitive advantage
Capabilities
ResourcesStep 1: identify and classify firm’s resources. Assess strengths and weaknesses of these relative to competitors. Identify opportunities
Step 2: identify capabilities which are its strengths. Identify resource inputs for it
Step 3: appraise rent gathering potential in terms their potential for sustained competitive advantage and appropriability
Step 4: select a strategy which matches. These steps Step 5: identify
resource gaps. Invest in replenishing, upgrading and augmenting resource base.
Grant 1991
Summing Up
• What is Strategy?• Conceptualization
– Firm & Environment – Decision level– Content, Process, Context– Stakeholders– Tools– Concept of time– Flow of initiatives– Outcomes-- SCA
What is strategy
• Competitive strategy is being different- deliberately choosing a different set of activities to deliver a unique mix of value
• Strategy is creation of a unique and valuable position
• Strategy is about combining activities and creating a fit between them
• Strategy is creating fit among a company’s activities so as to enable it to position its product in such a way that competitive advantage is clear.
Locus of decision makingType of strategic decision process
individualrational political
group
Locus of analysisindividual group
Type of changeepisodic incremental
adaptiveInter
pretive
mechanistic
Sam
e di
ffer
ent
linear
organic
EntrePreneurial
cognitive
Design/rational
planningposition
learning
configurational
powercultural
environmental
Logical Incremen
talism
evolutionary
Key points
• Plan to achieve objectives
• Analysis –gives objectives—use tools
• Converting of strategy to actions--- detailed planning– implementation
• Actual field level actions– service delivery
• All decisions –strategic, tactical, operational– interlinked– stream of decisions
Key points
• Need to be done over time
• Role of time– Path dependency, forecasting of trends, dynamic process
• Require feed back, correction– learning
• Strategy is –– process– Dynamic– Non linear
Linkage to case method of teaching
• Objectives– do analysis- – What you want to cover– course content– Audience characteristics– level of content– No of sessions– time frame– Instruments available– pedagogy and
evaluation
• Planning- convert plan to actionable items– Cases identification and their role– Identify reading material– Communicate in advance
Linkage to case method of teaching
• Implementation – actual handling– Case title– topic to cover– Read case/ teaching note– Establish – what concepts will be covered
• Highlights
• How will you handle discussion
• Prepare for deviations• Actual handling in class- ensure particpation• Summarize
– Link case facts and analysis to concepts
Ensure student preparation– generate trust- subject grasp and commandGive assignments and feed back, submissions
THANKS
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