An Introduction to Strategy

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An Introduction to Strategy

• Kevin Hinde

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Aims

• Introduce the economic problem of scarcity and
  relate this to the concept of strategy.
• Explore the meaning of organisational strategy
  and competitive strategy.
• Investigate the processes by which strategy is
  formulated within the organisation.

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Learning Outcomes

• Summarise the economic problem and relate this to
  the issue of strategy through a self-assessment
  activity.
• Analyse the various definitions of strategy and
  critically consider which is more appropriate to
  your organisation.
• Critically examine the meaning of strategic
  management and contrast this with a Rationalist
  perspective via note taking.

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The Economic Problem of Scarcity

• Insatiable Wants
• Scarce Resources
• Choices
• Opportunity Cost

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Marvellous Markets?

• Markets are complex social institutions where
  exchange takes place.
• Markets can fail to function properly (Market
  Failure)
• Information Asymmetry
• Market Dominance
• Externalities
• We will look at Information.

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Information Asymmetry

• Differences between simple and complex exchange.
• Contrast buying a newspaper with the purchase of
  a road.
• Information problems with complex exchange.
• Opportunism and the hold up problem
• resolved by quasi-market behaviour or integration
• Whatever happened to Trust?

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Marvellous Government?

• Do we always need regulation when markets fail?
• Self-regulation
• market adjustment mechanisms
• Do we need Government to provide public goods?
• What about the merit good argument?
• How good is government?

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Summary so far..
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How does strategy fit in?

• strategy is the process by which individuals and
  organisations make choices about scarce resources
  so as to satisfy wants over time in an
  environment of uncertainty. They are aided in
  this process by market and non-market forces.

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Organisational Strategy

• A strategy is defined as a pattern, of
  purposes, policies, programmes, actions,
  decisions, or resource allocations that define
  what an organisation is, what it does, and why it
  does it. Strategies can vary by level function,
  and by time frame.
• (Bryson, 1995, p.32)

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Competitive Strategy

• Strategy is the direction and scope of an
  organisation over the long term which achieves
  advantage for the organisation through its
  configuration of resources within a changing
  environment, to meet the needs of markets and to
  fulfil stakeholder expectations
• (Johnson and Scholes, 1999. p.10).

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Mintzbergs 5 Ps

• Strategy can be characterised as a
• Ploy
• Position
• Perspective
• Plan
• Pattern

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Forces determining Strategy affect Intentions and
realisations
Emergent Strategies
Intended strategy
Realised strategy
Unrealised strategy
Intended, emergent and realised strategies
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Planning and Strategic Management.

• "Strategic management is a means of
  understanding the strategic position of the
  organisation formulating courses of action,
  evaluating them and choosing between them as
  well as planning how the choice of strategy can
  be put into effect and managing the resultant
  changes." Johnson and Scholes (1994)

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Planning and Strategic Management.

• planning is a sequence of analytical and
  evaluative procedures to formulate an intended
  strategy and the means of implementing it.
  (Johnson and Scholes, 1999)
• is Planning unconcerned with emergent strategy?

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And Finally.

• Summary
• Have you covered the learning activities?
• Any questions?