Strategic Management in Sport LTP004N Spring Semester 2010
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Strategic Management in Sport
LTP004N Spring Semester 2010
AIMS AND OBJECTIVES
• This module introduces sport management students to the various models of organisational strategy. It provides a framework within which different management functions may be examined and integrated. Within these general aims, the module has been prepared so as to achieve the following.
• to enable the students to evaluate the key sources of uncertainty facing sports organisations.
• to introduce the students to the concepts of environmental, social and financial audit and appraisal.
• to enable students to evaluate the feasibility of proposed sport developments.
LEARNING OUTCOMES
On successful completion of this module participants will be able to:
• outline the various models of the strategic process and discuss the relevance of these models to particular circumstances;
• analyse the key contemporary features of the strategic sports management environment.
• identify the strategic choices facing corporate managers in sports organisations;
• in a sports management context to evaluate strategic choices and to evaluate the feasibility of strategic proposals;
• identify the problems and opportunities faced by sports organisations in implementing their chosen strategy
Introducing Strategy
LTP004N Strategic Management in SportWeek 1 Spring Semester 2010
How do we determine success?
• Is it winning in sport?• Is it making a profit in business. Is it customer
satisfaction, retention rates?• Is it just survival?
• The problem with strategic management in sport– Utility v Resource Maximisation
Lesson Aims and Objectives
• Aim: – To introduce participants to concepts, theories and
processes of strategic management• Learning Objectives
– By the end of this lesson you will be able to• Define the concept of strategic management• Understand the context of strategic decision making• Discuss the notion of success• Present the strategy lenses as ways of viewing strategic decisions• Understand how to check strategic options fit with the organisation
Strategic Management – some views (1)
• Saloner et al:– ‘Strategic Management is about helping managers navigate
the external environment while making the best use of the organisation’s assets’
– A strategy does not SPECIFY any particular actions used to implement it – it is a FRAMEWORK for guiding a choice of possible actions
• Doyle: – ‘A strategy can be defined as a set of decisions taken by
managers on how the business will allocate its RESOURCES and achieve sustainable COMPETITIVE ADVANTAGE’
Strategic Management – some views (2)
• Fitzroy and Hulbert:– ‘ Strategy is about the organisation’s relationship with the
environment and deploying the CAPABILITIES and COMPETENCES to enable it to prosper…it can be explicitly formed or implicitly enacted as an evolutionary response to a changing environment’
• Johnson et al– ‘Strategy is the DIRECTION and SCOPE of an organisation
over the LONG TERM, which achieves advantage in a changing environment through the configuration of resources and competences with the aim of fulfilling STAKEHOLDER expectations
Strategic Decisions are About…
• The long-term direction of the organisation• The scope of an organisation’s activities• Gaining advantage over competitors• Addressing changes in the business environment• Building on resources and competences (capability)• Values and expectations of stakeholders which affect
operational decisions
Definition of Strategy
Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.
Strategic Decisions are Likely to :
• Be complex in nature• Be made in situations of uncertainty• Affect operational decisions• Require an integrated approach (both inside and
outside an organisation)• Involve considerable change
Strategic Management Operational Management
Organisation-wide, holistic Functional, Routinised
Conceptualisation of issues Techniques, processes, actions
Creating new directions: new resource allocations
Managing existing resources
Developing new resources Optimising existing resources
Ambiguous/uncertain Functionally and Operationally specific
Long term perspective Day to day issues, annual operating plan
Strategic v Operational Management
The Vocabulary of Strategy• Mission – overriding purpose• Vision/strategic intent – desired future state• Goal – general statement of aim or purpose• Objective – quantification or more precise statement of
goal• Strategic capability – resources, activities and processes• Business model – how product, service and information
flow• Control – monitoring of action steps
Elements of Strategic Management
• Understanding the strategic position of an organisation
• Making strategic choices for the future
• Actioning strategy
Manufacturing – physical product often augmented with service, brand image for competitive advantage. Global v Local competition/sourcingServices – no physical product, competitive advantage based on intangibles increasing Globalisation
Manufacturing/Service Organisations
Diverse products/markets/businesses. Structure/control/parenting. Competitive strategy. Portfolio management. Resource allocation/ coordination. Global v Local competition. SBU focus
Multinational Corporation
Single market. Limited product/service range. Competitive strategy. Strategic capability. Restricted funds.
Small Business
Different Contexts for Strategy
Diverse sources of funds. Values and ideology. Lobbying. Stakeholder management. Managerialism v Volunteer dependency
Voluntary and Not-for-Profit
Ideology. Direct/indirect external influence (e.g. government). Competition for resource inputs. Best value in outputs. Interagency cooperation
Public Sector
Manufacturing/Service Organisations
Multinational Corporation
Local private Gym & Fitness Centres, Little KickersSmall Business
Different Contexts: Sport Examples
Voluntary and Not-for-Profit
Public Sector
Nike, Adidas-Reebok, Manchester United, Ferrari, Larger Fitness Clubs
Islington Boat Club, Anaconda Swimming Club, Football Foundation, Central Council for Physical Recreation
Islington Sport and Leisure Authority, UK Sport, Sport England, Toulouse Rugby Club
IMG, Octagon, News Corporation, Fitness First
BARCELONA FC
Overview
Strategic Paradigms and The Strategy Lenses
How organisations approach strategy
Strategic Paradigms
• What’s a paradigm?– A set of assumptions, concepts, values, and practices that constitutes a
way of viewing reality for the community that shares them, especially in an intellectual discipline
• Whittington (1989) believed there were four competing paradigms relevant to strategic management– Classical– Evolutionary– Systemic– Processual
Paradigms mapped
Strategic Paradigms – Rational Analysis and Plans
Classical Paradigm– The environment is dynamic, but essentially predictable– Therefore decisions can be made within a rational strategic
planning process– Based upon Organisational objectives, environmental
scanning, strategy formulation and implementation– Actions are rational & deliberate, focusing on a single intent– Failure is seen as resulting from deviations from this process
Strategic Paradigms – Adapting to Changing World
Evolutionary Paradigm– The environmental forces create problems, opportunities and
‘bounties’ for the company; continually and unpredictably– Managers cannot accurately predict these changes and
therefore cannot make rational decisions– Strategy therefore is taking advantage of opportunities as the
environmental changes– Actions that are rational, deliberate and lead to long-term
visions will lead to short-term disasters– Flexibility of resources, speedy execution and beating the
competition allows success/survival
Strategic Paradigms - Organisation and Environment = complex interactivityProcessual Paradigm
– The environment is seen as arbitrary and unpredictable, but not as harsh as the Evolutionary paradigm
– Poor or below standard business performance goes unpunished by the marketplace; therefore individuals do not have to focus on profitability only
– Wider individual or collective objectives can be accommodated – individuals can form groups and alliances to further own careers interests
– Leads to Satisfying behaviour – so long as key stakeholders are kept content
– Strategy therefore emerges from ‘Political’ issues – It is deliberate, and contested, emerges from compromises, victories and defeats
Strategic Paradigms - Culturally Determined)
Systemic Paradigm– Strategy reflects the particular social and cultural systems in
which strategists participate, defining for them the interests in which they act and the rules by which they survive - class and country may make a difference
– The decision makers’ goals can be personal, influenced by society, desire for power, socially desirable outcomes which are not profit maximising e.g. full employment, family control
– Strategy as a social system with many influences and embedded and acting within a complex environment
Paradigms and Strategy Formulation
The Paradigm
Strengths & Weaknesses
Capabilities
Opportunities & Threats
Environmental Forces StrategyStrategy
PerformancePerformance
Implications
• Managers approaches will be conditioned by the paradigm they follow
• Paradigms are difficult to change as they are the sum of managers experience
and intuitions
• Opportunities will be evaluated according to cultural as well as analytical
methods
• Strengths and weaknesses are influenced by managerial assumptions
• Effect of ‘bounded rationality’ (Simon) and limits on option evaluation – danger of
current assumptions not fitting future situation
• The environment – market and wider social and political forces- can impact
hugely on an apparently sound strategy
Exhibit I.v
Three strategy lenses
The Strategy Lenses• Strategy as design
– Logical analytical process– Planned implementation– Top-down, management driven process
• Strategy as experience– Adaptation of past strategies based on experience– Influenced by taken for granted assumptions (culture)– Bargaining and negotiation between managers/functions– Potential for ‘drift’
• Strategy as ideas– Importance of variety and diversity for innovation– Emergent strategy from within and around the organisation– Top managers create the conditions for this to take place
Exhibit I.iv
A summary
RACES – Haberberg and Rieple
• Strategy is usually a set of options for the long term viability of the organisation
• RACES framework brings together all aspects of the organisation to check the validity of options and help make strategic choice
• Resources• Acceptability• Consistent• Effective• Sustainable
RACES in more detail• Resources:-
– Are resources needed available or easily obtainable?– How easy are they to imitate by competitors?
• Acceptability:-– Are internal power brokers, leaders and important stakeholders agreed?– Are external stakeholders agreed or satisfied e.g. regulatory bodies
• Consistency:-– Does it fit with culture, brand reputation, business architecture– If not, has the change implications been modelled into the strategy?
• Effectiveness:-– Does the strategy address the issues facing the organisation and resolve
them? – Is one option better than another at doing this?
• Sustainability:-– Does the strategy lead to long term advantage and how?– If competitors can imitate easily is there any way to make it more uniquely
successful
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