Strategy: an overview
Jonny Holmström
Web: jonnyholmstrom.com
Email: jonny.holmstrom@informatik.umu.se
Twitter: jonnyholmstrom
IT Management Group
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www.itmanagementgroup.se
Outline
Definitions
Forms of Strategy
Coherence in Strategic Direction
Information Systems Vs Information Technology
The importance of vision/mission
The organizational context for strategies: Mintzberg’s structure in
fives
“Strategies are both plans for the future
and patterns from the past”
- Henry Mintzberg
Definition of Strategy
A strategy is a plan of action designed to achieve a
vision. It derives from the Greek "στρατηγία”
(strategia), "office of general, command,
generalship”
(Wikipedia).
Aspects of Strategy
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Statement of ends, purposes and intent
High level plan
Element of leadership
Positioning for the future
Building capability
Fit between capabilities and opportunities
Pattern of behaviour resulting from embedded culture
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Strategic Management
• Strategic management is the study of why some firms
outperform others
• How to create a competitive advantage in the market place that is
unique, valuable, and difficult to copy
• “Total organization” perspective, integrating across
functional areas
• Strategies put together an understanding of the external
environment with an understanding of internal strengths and
weaknesses
Definition of Strategic Management
Strategic management consists of the analysis,
decisions, and actions an organization undertakes in
order to create and sustain competitive advantages
(Dess, Lumpkin, & Eisner, Strategic Management:
Creating Competitive Advantage, 3rd Ed., p. 9).
Attributes of Strategic Management
• Directs the organization toward overall goals and
objectives
• Includes multiple stakeholders in decision making.
• Needs to incorporate short-term and long-term
perspectives
• Recognizes trade-offs between efficiency and
effectiveness
• Efficiency describes the extent to which time or effort is well
used for the intended task or purpose; Effectiveness is the
capability of producing a desired result
Mintzberg’s Views of Strategy
• Plan - consciously intended course of action
• Ploy - maneuver to outwit opponent
• Pattern - consistency in behavior
• Position - location in environment
• Perspective - way of perceiving the world
Forms of Strategy
• Formal versus informal - associated with size of
firm and stage of development
• Intended versus realized - intended strategies are the
plans managers develop; realized strategies are the
actions that actually take place over time
Forms of Strategy
Source:H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and
Emergent,” Strategic Management Journal 6 (1985), pp. 257-72.
Coherence in Strategic Direction
Company vision
• Massively inspiring
• Overarching
Company vision
• Long-term
• Driven by and evokes passion
• Fundamental statement of the
organization’s
• Values
• Aspiration
• Goals
Hierarchy of Goals
Coherence in Strategic Direction
Mission statements
• Purpose of the company
Company vision
• Basis of competition and
competitive advantages
Mission statements
• More specific than vision
• Focused on the means by
which the firm will compete
Hierarchy of Goals
Coherence in Strategic Direction
Strategic objectives
• Operationalize the mission
statement
Company vision
• Measurable, specific,
appropriate, realistic,
timely, challenging, resolve
conflicts that arise, and
yardstick for rewards and
incentives
Mission statements
Strategic objectives
Hierarchy of Goals
Example:
Coca Cola’s Vision and Mission
• Vision: ”The Coca-Cola Company exists to benefit and refresh
everyone it touches. The basic proposition of our business is simple,
solid, and timeless. When we bring refreshment, value, joy and fun to
our stakeholders, then we successfully nurture and protect our brands,
particularly Coca-Cola. That is the key to fulfilling our ultimate
obligation to provide consistently attractive returns to the owners of
our business.”
• Mission: “Everything we do is inspired by our enduring mission:
• To Refresh the World… in body, mind, and spirit.
• To Inspire Moments of Optimism… through our brands and our actions.
• To Create Value and Make a Difference… everywhere we engage.”
IS Vs IT
INFORMATION
TECHNOLOGY
Inventory
System
Hardware
Software
Databases
Networks
Other related
components
Payroll
System
are used to build
INFORMATION
SYSTEMS
Marketing
System
Customer
Service
System
IT vs IS Strategy
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Carr (2003): IT doesn’t matter
– Since everybody can buy the same technology
strategic advantages cannot be found in having
IT in the organization
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IS matter!
– Merely having IT is not enough; what matters
is what you do with it
Mintzberg’s ‘Structure in fives’: An
organisation has five main parts
1.
2.
3.
4.
5.
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Strategic apex
Middle line
Support staff
Technostructure
Operating core
Five main configurations
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Mintzberg proposes five main configurations, or kinds of
organisations
These are contexts where strategies are played out!
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Simple structure
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A small shop
A new agency
A start-up company led by
a very dominant person
Machine bureaucracy
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A traditional airline
A paper and pulp factory
Professional bureaucracy
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University
Hospital
Divisional form
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A major corporation
Umeå municipality
Adhocracy
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A project based consulting
or R&D company
Some highly innovative
companies or agencies
(e.g. North Kingdom)
When analyzing strategies in
organizations
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We will meet mixed configurations
Thus, in your project, in the two seminars, and in the essay
assignments: you may see cases that tend to confirm, falsify
or call for elaboration of Mintzberg’s five types
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When analyzing IT strategies in organizations
(Peppard et al., 2014)