BUSINESS STRATEGY 51110

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BUSINESS STRATEGY 51110

• LECTURE TWO
• 13/03/02
• Topic Strategic management in practice

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Module 2 Strategic management in practice

• Learning outcomes
• Describe different strategy development
  processes
• Explain the nature of strategic planning systems
  and their advantages and shortcomings
• Explain the difference between realised and
  intended strategies
• Explain the the roles of culture and politics in
  strategy development
• Explain strategic drift and the circumstances
  under which it may occur and
• Describe the characteristics of a learning
  organisation.

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Key words and concepts

• Punctuated equilibrium
• Intended strategy
• Realised strategy
• Strategic planning- command view
• Logical incrementalism
• Cultural view
• Paradigm
• Enforced choice
• Cultural web
• Strategic drift
• Learning organisation

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A BASIC MODEL OF THE STRATEGIC MANAGEMENT PROCESS
STRATEGIC ANALYSIS
STRATEGY IMPLEMENTATION
STRATEGIC CHOICE
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Different explanations of the processes of
Strategic management

• Rational planning
• Crafting or logical incrementalism
• Chaos / complexity
• Cultural / institutional
• Ecological / natural selection

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Patterns of strategy development

• Punctuated equilibrium
• Intended strategy
• Realised strategy

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Strategy development as managerial intent

• Strategies, when developed in organisations
  through deliberate intent, can be explained by
  one of the following
• The planning view
• The command view
• The logical incremental view

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The planning view

• strategic planning is a sequence of analytical
  and evaluative procedures to formulate an
  intended strategy and the means of implementing
  it.
• Johnson Scholes 1999, p.51.

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The planning view (Cont)

• Provides a structured mean of analysis and
  thinking requiring managers to question and
  challenge accepted norms.
• Can be use as a means of involving people to help
  create ownership of strategy.
• Helps communicate intended strategies.
• Can be used as a means of control by regular
  performance.
• Can be used co-ordinate organisational
  sub-sections (such as SBUs).
• Can encourage a longer view of strategy. This may
  differs from industry to industry.
• Can be fraught with danger such as.?

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The command view

• The command view is where strategy develops
  through the direction of an individual or group.
• Johnson Scholes 1999, p.54.
• Often the result of little formal planing but
  based on some other agenda
• Some examples of those doing the commanding?

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The logical incremental view

• logical incrementalism is the deliberate
  development of strategy by learning through
  doing.
• Johnson Scholes 1999, p.55.
• Often a general statement of strategic intent
  with the details filled in along the way
• Firm view of the end result but little idea of
  how to get there
• Can be common where a strong culture exists or
  the outcomes of political processes

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Strategy development as an outcome of cultural
political processes

• The cultural view
• strategies are the outcomes of the
  taken-for-granted assumptions and routines of
  organisations.
• Johnson Scholes 1999, p.58.

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Paradigms

• Paradigms refer to
• the sets of assumptions held relatively in
  common and taken for granted in the
  organisation.
• Johnson Scholes 1999, p.58.
• An organisational paradigm represents the
  collective experience without which people would
  have to reinvent their world.

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Organisational politics and networks

• A political view is that strategies develop as
  the outcome of processes of bargaining and
  negotiation among powerful internal or external
  interest groups (or stakeholders).
• Johnson Scholes 1999, p.61.
• Considers the process of bargaining amongst
  powerful external and internal interest groups or
  stakeholders.

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Cultural and political processes in strategic
decision making

• Phases of strategic decision making
• Awareness
• Issue formulation
• Selection of solutions
• Solution development

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Imposed strategy development

• Enforced choice
• An enforced choice is the imposition of strategy
  by agencies or forces external to the
  organisation.
• Johnson Scholes 1999, p.61.
• The environment as a constraint processes

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Strategic vision

• Strategic vision may involves
• Planning
• External imposition
• Intuition creativity

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Configurations of strategy development processes

• Logical incrementalism
• Rational command
• Muddling through
• Externally dependent

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Challenges for strategy development

• Cultural web
• Strategic drift
• Learning organisation

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Cultural web

• The cultural web is a representation of the
  taken-for-granted assumptions, or paradigm, of an
  organisation and the physical manifestations of
  organisational culture.
• Johnson Scholes 1999, p.73.

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Cultural web (Cont)

• Cultural web includes the following elements
• The paradigm
• Rituals and routines
• The stories
• Symbols
• Power structures
• Organisational structures
• Control systems

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Strategic drift

• Strategic drift occurs when the organisations
  strategy gradually moves away from relevance to
  the forces at work in its environment.
• Johnson Scholes 1999, p.79.
• Often the difference between intended and realise
  strategy
• Often results in punctuated equilibrium

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Strategic drift (Cont)
The dynamics of paradigm change
The paradigm
Development of strategy
Implementation
Corporate performance
If unsatisfactory
Step 1 Tighter control
Step 2 Reconstruct or develop new strategy
Step 3 Abandon paradigm and adopt a new one
Source Adapted from P. Grinyer and J-C. Spender,
Turnaround Managerial recipes for strategic
success, Associated Business Press, 1979, p. 203.
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Lecture 2 review

• Strategic management in practice
• Different strategy development processes
• Planning systems and their shortcomings
• Realised intended strategies
• The impact of culture politics
• The concept of strategic drift

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Next week

• Module 3 Strategic analysis
• (Study book Module 3 - Text Chapter 3)

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Next weeks tutorial

• Assignment 1.(general discussion)
• Case Study, handout given in tute
• Read up on strategy processes
• Look at strategic drift