Strategic Management: Test Review III

1
Strategic ManagementTest Review III

• SOM 497
• Session 24

2
Strategic Management

• Strategic Analysis
• External analysis (Ch 2)
• Internal analysis (Chs 3 4)
• Formulation of Strategies
• Business level (Ch 5)
• Corporative (Ch 6)
• International (Ch 7)
• Digital (Ch 8)
• Strategic Implementation
• Control Governance (Ch 9)
• Organization Design (Ch 10)
• Managing Innovation (Ch 11)

3
Strategic Control

• What is Control?
• Power to direct or determine
• The ability to exercise of authority to implement
  something
• What is Strategic Control?
• Power to direct or determine the Strategy
• The ability to exercise of authority to implement
  the Strategy

4
Strategic Control

• What kinds of Control exist in organizations?
• Informational Control
• Traditional (Sequential)
• Contemporary (Interactive)
• Behavioral Control
• Balance between culture, rewards boundaries
• Corporative Governance
• Alignment of managerial shareholders interests
  (control over managers -Governance)

5
Corporative Governance

• Internal Control Mechanisms (Ch 3)
• Board of Directors
• Shareholder Activism
• Managerial Rewards Incentives
• External Control Mechanisms (Ch 2)
• Market
• Auditors
• Banks Analysts
• Regulatory Bodies
• Media Public Activists

6
Organizational Design

• What is Organization Design?
• The creation of an structure that fits (enables)
  the organizations goals and activities
• The internal processes and integrating mechanisms
  necessaries to ensure the necessary boundaries
  and links between internal activities and
  external parties

7
Traditional Organizational Design
8
Multidomestic Strategies International Division
Structure
Headquarters
Canada
US
IT Department
Sales Department
Production Department
IT Department
Sales Department
Production Department
Organic Waste Collection
Fertilizer Factory
Distribution Center
Organic Waste Collection
Fertilizer Factory
Distribution Center
9
Multidomestic Strategies Geographical-area
Division Structure
Headquarters
Europe
North America
France
Spain
Canada
US
Mexico
Sales Department
Production Department
IT Department
Sales Department
Production Department
IT Department
Organic Waste Collection
Fertilizer Factory
Distribution Center
Organic Waste Collection
Fertilizer Factory
Distribution Center
10
Multidomestic StrategiesMatrix Structure
Headquarters
Regional Managers
IT
Sales
Production
Europe
North America
Asia
11
Global StrategiesWorldwide Functional
Headquarters
IT Department
Sales Department
Production Department
North America
Organic Waste Collection
Fertilizer Factory
Distribution Center
Asia
Europe
Canada
US
Mexico
India
US
US
Canada
US
12
Global StrategiesWorldwide Product Division
Headquarters
Fertilizer Division
Methane Division
Canada
France
US
IT Department
Sales Department
Production Department
IT Department
Sales Department
IT Department
Sales Department
Production Department
Organic Waste Collection
Fertilizer Factory
Distribution Center
Organic Waste Collection
Methane Factory
Distribution Center
13
Strategic ControlRewards Performance

• Business Level Strategy
• Cost leadership
• Pressures for Low Cost
• Desire Performance /Outcome Efficiency Low
  Cost
• Measure Production Outcomes, Sales Volume,
  Return on Assets, etc
• Reward Financial
• Differentiation
• Pressures for Adaptation or Uniqueness
• Desire Performance /Outcome Innovation
• Measure Collaboration, Cooperation, Share
  Information, etc
• Reward Behavioral

14
Strategic ControlRewards Performance

• Corporate Level Strategy
• Related Diversification
• Pressures for Synergies Leverage
• Desire Performance /Outcome Coordination
  Sharing
• Measure Collaboration, Cooperation, Share
  Information, etc
• Reward Behavioral
• Un-Related Diversification
• Pressures for Performance Accountability
• Desire Performance /Outcome Efficiency Profit
• Measure Production Outcomes, Sales Volume,
  Return on Assets, etc
• Reward Financial

15
Boundaryless Organizational Designs

• Barrier Free Organization
• Team Works Peer Supervision

16
Boundaryless Organizational Designs

• The Modular Organization
• Service on Demand

Internal
External
Production
Marketing
Company / Coordinator
RD
Sales
Sales
17
Boundaryless Organizational Designs

• The Virtual Organization
• Network of independent companies

18
Strategic Leadership

• What is Leadership?
• Exerting influence
• Motivating inspiring
• Helping others to realize their potential
• Leading
• BASICALLY
• Getting others to willingly do

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What is Strategic Leadership?

• The process of transforming organizations from
  what they are into what the leader would have
  them become
• But
• What does it mean?
• To know what the organization is
• To be dissatisfy with the current organization
• To have a vision of what to do
• To have a plan / process to implement the vision

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What Strategic Leaders Do?

• Setting Direction
• Holistic understanding of the stakeholders needs
  the environment (Ch 2 3)
• Design the Organization
• Taking advantage of the existing resources
  planning how to get the others (Ch 3, 4 9)
• Nurture a Culture of Excellence Ethics
• Awareness of the stakeholders (Ch 1-3)
• A desire to have a sustainable business (Ch 5-8)

21
What Strategic Leaders Do?

• Recognize the Barriers to Change
• Vested interests in the status quo
• Systemic Barriers (Bureaucracy)
• Behavioral Barriers (bias)
• Political Barriers
• Personal Time Constrains
• ...and Overcome Them Through Power
• Organizational Legitimate, Reward, Coercive
  Information
• Personal Referent Expert

22
What Are the Skills of a Strategic Leader?

• Technical Skills
• Knowledge
• Cognitive Abilities
• Capability to understand
• Emotional Intelligence
• Self-awareness
• Self-regulation
• Motivation
• Empathy
• Social Skill

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What kind of Organization to Change Into?

• Learning Organization
• Empowering Employees at all Levels
• Accumulating Sharing Internal Knowledge
• Gathering Integrating External Information
• Challenging the Status Quo
• Ethical Organization
• Individual Ethics versus Organizational Ethics
• Integrity-Based versus Compliance-Based Approach
• Role Model
• Corporate Credos Codes of Conduct
• Rewards Evaluation Systems
• Policies Procedures

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Entrepreneurship

• What is Entrepreneurship?
• The process of identifying, evaluating, seizing
  an opportunity and bringing together the
  resources necessary for success
• What is NOT Entrepreneurship?
• Being mischievous, being sneaky, breaking
  rules, being un-ethical....
• In short, any one of a large collection of
  basically anti-social behaviors

25
Entrepreneurship

• What is an Entrepreneur?
• A person who is
• environmentally aware of opportunities and
  changes (Ch 2)
• knows what resources are available (Ch 3 4)
• is capable of creating a plan to coordinate those
  resources (Ch 5, 6, 8)
• can implement and follow through that plan (Ch 9,
  10 11)

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Entrepreneurship

• What does it mean to take advantage of
  opportunities?
• To be capable to transform
• To be positively creative towards change
• To break the status quo
• In short
• To be Innovative

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Entrepreneurship

• Types of Innovation
• Radical
• Disruptive
• Mostly because technological change
• Incremental
• Evolutionary
• Mostly because adaptation and improvements

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Entrepreneurship

• Challenge of Innovation
• Seeds vs. Weeds
• Is it worth?
• Experience vs. Initiative
• Rank or Enthusiasm
• Internal vs. External Staffing
• Social Capital or Fresh eyes
• Building Capabilities vs. Collaborating
• To Buy or To Share
• Incremental vs. Preemptive Launch
• Milestones or Full engagement

29
Entrepreneurship

• How to Address Innovation?
• Define the Scope
• What to innovate
• How to innovate
• Cost
• Viable
• Manage the Pace
• How fast
• How much change
• Encourage Collaboration
• Dont work alone

30
Corporate Entrepreneurship

• What is Corporate Entrepreneurship (CE) Good for?
• To pursue new venture opportunities
• Related diversification
• Unrelated diversification
• Strategic Renewal
• Process
• Organizational Form
• Controls
• etc

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CE Approaches

• Focus
• Characteristics
• Institutionalized
• Formalized
• Present as
• New Venture Groups (NVGs)
• Semi-autonomous units with little (none) formal
  structure
• Freedom to take risk to explore
• Business Incubators
• Support nurture new entrepreneurial ventures

• Dispersed
• Characteristics
• Organic
• Spontaneous
• Present as
• Entrepreneurial Culture
• Search for new ventures permeates the whole
  organization
• Product Champions
• A new idea / product emerge in the course of
  business and is promoted to become official

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Corporate Entrepreneurship

• Measuring Success of CE Activities
• Comparing Strategic Financial CE Goals
• Will the Market Accept the new Venture?
• Is the CE process creating synergies?
• Does the New Venture has a Competitive Advantage
  in itself?
• Exit Champions
• Dont be afraid to quit if needed

33
Corporate Entrepreneurship

• Is the Corporation Entrepreneurial?
• Autonomy
• Innovativeness
• Proactiveness
• Competitive Aggressiveness
• Risk Taking