Current Trends in Strategic Management

1
Current Trends in Strategic Management
Contemporary Strategy Analysis, 6th edition by
Robert M. Grant
OUTLINE

• New realities of the new century
• The strategy model of the 1990sno longer working
• Forces shaping 21st century business strategies
• Emerging developments in strategy, structure,
  management systems, and leadership

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New Realities of the 21st Century

• Collapse of New Economy
• Dot.com bubble bursts
• TMT recession

• Corporate Scandals
• Enron, WorldCom, Parmalat
• Excessive executive pay

• Sept. 11, 2001
• Invasion of Afghanistan Iraq
• Middle East mayhem
• Shrinking status and influence of the USA

• International
• competition intensifies
• Rise of BRIC (Brazil, Russia,
• India, China)

• Fragility of
• Natural Environment
• Global warming
• Water shortages

• Decline of
• Multilateralism
• Collapse of Doha round
• Trade wars between US, EU, China
• Weakening of UN

• Fear of Disease
• SARS, Mad Cow, Bird Flu

• Market instability
• Currencies
• Commodity prices

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The Strategy Model of the 1990s

• Major Themes of Business Strategy
• Cost cuttingsqueezing
• overhead, business process re-
• engineering, increasing labor
• productivity
• Outsourcing/refocusing/
• divestment
• Performance management and
• incentive alignment

• Key Trend of the 1990s
• Quest for shareholder value

• Influential Strategy Concepts
• Modern financial analysis
• shareholder value, economic profit,
• option theory
• Core competences and intangible
• assets
• Dynamically competitive markets
• (hypercompetition) competitive
• advantage requires speed,
• entrepreneurship, alliances, control
• of standards

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Forces Currently Shaping Company Strategies

• Future Sources of Profit
• Limits of downsizing/cost cutting
• Where are future sources of
• profit?

• The Business
• Environment
• Uncertainty
• Intense competition

• Concepts Theories
• Resources capabilities as
• basis for competitive advantage
• Knowledge-based theory
• of the firm
• Option theory
• Complexity theory

• Technology
• Digitization
• Convergence

• Demands of society
• Social environmental responsibility
• Ethics fairness
• Quest for meaning

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Emerging Developments

• STRATEGY
• Firm goals rethinking profit maximization
• Multiple competitive advantages/multiple
  capabilities
• Role of innovation Developing new products
  new
• businesses
• Strategy as creating managing options

• ORGANIZATION
• STRUCTURE
• Reconciling flexibility
• integration
• Multidimensional structures
• Informal organization
• self-organization
• Modular structures

• MANAGEMENT SYSTEMS
• Knowledge management
• (incl. best-practice transfer)
• Redesigning incentive systems
• Rethinking performance management
• Capturing human creativity
• New approaches to leadership

NEW MODELS OF LEADERSHIP