strategic management practices @ mba
DESCRIPTION
Strategic management practices @ MBATRANSCRIPT
Strategic Management in Practice
Strategy Development
The Three Strategy Lenses
Strategy as Design Strategy as Experience Strategy as Ideas
Exhibit 2.2 Patterns of strategy development
Continuity Incremental Flux Transformational
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.
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
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
Strategy development dimensions
Planning Incremental Cultural Enforced choice
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?
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
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
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
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.
Exhibit 2.6 Cultural frames of reference
Functional/divisional
OrganisationalProfessional
(or institutional)
National(or regional)
Industrial/sector
(recipe)
Theindividual
Implications for strategy development
Intended & realised strategy Strategic drift Strategic management in uncertainty &
complexity
Exhibit 2.5 Incremental change
Environmental change
Incremental strategicchange
Time
Am
ount
of
chan
ge
THE PARADIGM
... The beliefs and assumption held in common
and taken for granted in an organisation.
Edgar Schien ****
W. Williams ****
Issue awareness
Selection of solutions
Exhibit 2.8 Phases of strategic decision making
Solutiondevelopment
Issueformulation
Controlsystems
Stories Symbols
Ritualsand routines
TheParadigm
Powerstructures
Organisationalstructures
Exhibit 2.10 The cultural web
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
Exhibit 2.13 Different approaches to strategic management
Strategic Strategicintent Planning
Incremental Encouraging ‘intrapreneurship’
Simple ‘Product’ Complex Product
Unpredictable environment
Predictable environment
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
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
The Learning Organisation
The Systems Approach Systems Thinking Team Learning Personal Mastery Mental Models Building a Shared Vision
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.
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,.