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Strategic management practices @ MBA

Nov 01, 2014

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Strategic management practices @ MBA
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Page 1: Strategic management practices @ MBA

Strategic Management in Practice

Page 2: Strategic management practices @ MBA

Strategy Development

The Three Strategy Lenses

Strategy as Design Strategy as Experience Strategy as Ideas

Page 3: Strategic management practices @ MBA

Exhibit 2.2 Patterns of strategy development

Continuity Incremental Flux Transformational

Page 4: Strategic management practices @ MBA

Exhibit 2.3 Strategic evolution and consolidation

.

Product launch

Acquisition

Divestment

Overseas expansion

Strategies evolve and inform strategic

decisions, which in turn consolidate

strategic direction

Evolving strategic direction

Strategic decisions e.g.

Page 5: Strategic management practices @ MBA

Exhibit 2.4 Strategy development routes

Unrealised strategy

Intended strategy

3

5

Planned implementation 1

2

5

Realised strategy

Strategy as outcome (of cultural and

political processes)

Imposed strategy

4

Page 6: Strategic management practices @ MBA

Exhibit 2.7 The role of the paradigm in strategy formulation

Opportunities and threats

Strengths and weaknesses

Performance

Environmental forces

Organisational capabilities

THE PARADIGM

Strategy

Page 7: Strategic management practices @ MBA

Strategy development dimensions

Planning Incremental Cultural Enforced choice

Page 8: Strategic management practices @ MBA

The 6 key planning questions

Where are we now? How did we get there? Where are we heading? Where would we like to be? How do we get there? Are we on course?

Page 9: Strategic management practices @ MBA

STRATEGY DEVELOPMENT DIMENSIONS (1)

The Planning Dimension strategies are the outcome of rational, sequential,

planned and methodical procedures definite and precise strategic objectives are set the organisation and environment are analysed potential strategic options are generated and the

optimum solution chosen defined procedures for implementation and the

achievement of the strategic objectives are developed the strategy is made explicit in the form of detailed

plans

Page 10: Strategic management practices @ MBA

STRATEGY DEVELOPMENT DIMENSIONS (2)

The Incremental Dimension evolutionary but purposeful strategy development strategy is developed as issues arise strategy is continually adjusted to match changes in the

operating environment early commitment to a strategy is tentative and subject

to review strategic options are continually assessed for fit successful options gain additional resources strategic options are developed from existing strategies

by experimentation and through gradual implementation

Page 11: Strategic management practices @ MBA

STRATEGY DEVELOPMENT

DIMENSIONS (3)The Cultural Dimension a “way of doing things” in the organisation guides

strategic direction strategies evolve in terms of a core set of shared

assumptions based on past experience, values and beliefs held by the organisation’s members

- the selection of goals and objectives the identification of strategic issues the selection of information the selection of strategies

Page 12: Strategic management practices @ MBA

STRATEGY DEVELOPMENT DIMENSIONS (4)

The Enforced Choice Dimension strategic choice is prescribed or limited by external

forces which the organisation is unable to control or influence.

organisations respond to environmental imperatives.

strategic change is instigated from outside the organisation.

barriers in the environment severely restrict strategic mobility.

Page 13: Strategic management practices @ MBA

Exhibit 2.6 Cultural frames of reference

Functional/divisional

OrganisationalProfessional

(or institutional)

National(or regional)

Industrial/sector

(recipe)

Theindividual

Page 14: Strategic management practices @ MBA

Implications for strategy development

Intended & realised strategy Strategic drift Strategic management in uncertainty &

complexity

Page 15: Strategic management practices @ MBA

Exhibit 2.5 Incremental change

Environmental change

Incremental strategicchange

Time

Am

ount

of

chan

ge

Page 16: Strategic management practices @ MBA

THE PARADIGM

... The beliefs and assumption held in common

and taken for granted in an organisation.

Edgar Schien ****

W. Williams ****

Page 17: Strategic management practices @ MBA

Issue awareness

Selection of solutions

Exhibit 2.8 Phases of strategic decision making

Solutiondevelopment

Issueformulation

Page 18: Strategic management practices @ MBA

Controlsystems

Stories Symbols

Ritualsand routines

TheParadigm

Powerstructures

Organisationalstructures

Exhibit 2.10 The cultural web

Page 19: Strategic management practices @ MBA

Exhibit 2.11 The dynamics of paradigm changeSource: Adapted from P. Grinyer and J-C. Spender, Turnaround: Managerial recipes for strategic success, Associated Business Press, 1979, p. 203

The paradigmDevelopmentof strategy

ImplementationCorporate performance

Step 1Tighter control

Step 2Reconstruct or develop new strategy

if unsatisfactory

Step 3Abandon paradigm and adopt a new one

Page 20: Strategic management practices @ MBA

Exhibit 2.13 Different approaches to strategic management

Strategic Strategicintent Planning

Incremental Encouraging ‘intrapreneurship’

Simple ‘Product’ Complex Product

Unpredictable environment

Predictable environment

Page 21: Strategic management practices @ MBA

Exhibit 2.12 The risk of strategic drift

Time

Am

ount

of

chan

ge

Phase 1 Phase 2 Phase 3/4Incremental change Flux Transformational

change or demise

Strategicchange

Environmental change

1

5

2

3

4

Page 22: Strategic management practices @ MBA

The Learning Organisation

Organisations where people are continually learning how to learn together

People who function together in an extraordinary way - trust one another -complement each others strengths – compensate for each others limitations – common goals larger than individual goals – produce extraordinary results

The Fifth Discipline., the Art & Practice of the Learning Organisation, by Peter Senge

Page 23: Strategic management practices @ MBA

The Learning Organisation

The Systems Approach Systems Thinking Team Learning Personal Mastery Mental Models Building a Shared Vision

Page 24: Strategic management practices @ MBA

STRATEGIC MANAGEMENT PROCESSES

Different organisations develop strategies according to their culture to suit their environment

We need to understand how strategies are developed and managed in our organisations and relate it to the learning on this subject.

Page 25: Strategic management practices @ MBA

Summary - Understanding Strategic Development

Three lenses for making sense of strategy, Design, experience & ideas Most often the process of strategy development is described as a result of analysis evaluation &

planning systems carried out by top management objectively & dispassionately The experience lens shows how the organisational culture tends to lead to being adapted from

strategies of the past The ideas lens is useful to develop really innovative strategies that can cope with rapidly

changing & unpredictable environments & emerge where the emphasis is on diversity & variety These lenses can be helpful in providing insight into strategy development, considering the

argument for/against strategic planning, how strategic leaders influence strategy in their organisations, the way political activity plays a part, how organisations may proactively try to

cope with dynamic & uncertain environments through the emergent process of logical incrementalism, or more open learning systems in which diversity of views is encouraged, or

how strategies might be imposed on organisations by external agencies It is likely that a mixture of these strategy development processes is employed, known as the

configuration of process Important to differentiate between realised strategy, that evolves incrementally, over time,

interrupted by periods of punctuated equilibrium during which transformational change occurs & the intended strategy an organisation ought to follow

Historical data my be useful in stable environments, but less useful in dynamic environments & complex environments in which more attention needs to be given to responding throughout the

organisation to change,.