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
Adapted from Pettigrew et al (2002),
Whittington (2002), Gould and Campbell
(1993)
Descriptor
1950’s and 1960’s
1970’s
1980’s
1990’s
21st century
Environment
Stable
Dynamic complex
Dynamic complex
Highly
dynamic
Hyper
competitive
Focus
Content
Top management
Content
Top management
Content
Top management
Process,
Organisation
Process
Organisation
Context
dependent
Context
depende
nt
Integrated
Integrated
Processual
Longitudinal
Processual
Longitudinal
Decision making
Rational, synoptic
Rational synoptic
Rational,
participative
View
of
Implementatio
n
Distinct
Given
Distinct
Given
Distinct
Given
Research
Processual
,
longitudinal
Cross sectional
Dominant school
Design
Planning
Positioning
Cultural
Learning
Learning,
Organic
Strategy
paradigm
Static, exploit
Opportunities,
Static,
detailed
planning
Static,
position
defense
Static,
adaptive
Dynamic
adaptive
Cross sectional
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?)
Conceptualization
Environment
‘Possessions’
Environment
‘Possessions’
The Firm
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
Components of Strategy
Culture and
stakeholder
expectations
The
environment
Identifyin
g
strategic
options
Evaluatin
g options
Content:
Strategic
Choice
Selecting
strategy
Context:
Strategic
Analysis
Resources
and strategic
capabilities
Planning
and
allocatin
g
resource
s
Process:
Strategy
Implementation
Firm
structure
and
design
Managin
g
strategic
change
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
Wide Access
to Markets
Core
Competence
Difficult to
Imitate by
competition
Add value to
the customer
Idea © C.K. Prahalad and Gary Hamel, 1990
Resource based view
Step 4: select a strategy which
matches. These steps
Step 3: appraise rent gathering
potential in terms their potential
for sustained competitive
advantage and appropriability
Step 2: identify capabilities
which are its strengths.
Identify resource inputs for it
Step 1: identify and classify firm’s
resources. Assess strengths and
weaknesses of these relative to
competitors. Identify opportunities
Strategy
Competitive
advantage
Step 5: identify
resource gaps.
Invest in
replenishing,
upgrading and
augmenting
resource base.
Capabilities
Resources
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 differentdeliberately 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.
episodic
Type of change
different
individual
incremental
Locus of analysis
group
position planning
cultural
Logical
Incremen
talism
power
mechanistic
Design/
rational
organic
learning
linear
adaptive
evolutionary
environmental
Inter
pretive
Same
configurational
Entre
Pren
eurial
individual
rational
cognitive
Locus of decision making
Type of strategic decision process
group
political
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 command
Give assignments and feed back, submissions
THANKS