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Corporate Strategy
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Johnson, G., Scholes, K., & Whittington R. (2012),
Exploring Strategy (9th ed.) Harlow: Financial
Times Prentice Hall.
(8th edition available as an ebook)
Useful text book
PROGRAMME FOR TODAY
Introduction to Corporate Strategy Issues and
perspectives on strategic management for discussion
today
Strategic Analysis
Strategic Choice
Corporate portfolio, governance and CSR and ethical
issues plus group work sessions in which ideas are applied to our case today (IBM
Turnaround)
Plus input from Martin Fausset on the Ricardo perspective on all this
Plus the occasional break!
Strategy is the means by which individuals or organisations achieve their objectives
Strategy is not about doing things better – this is the concern of operational effectiveness. Strategy is about doing things differently Hence the essence of strategy is doing things differently
What is Strategy?
CENTRAL ELEMENTS OF STRATEGIC
MANAGEMENT (JOHNSON AND SCHOLES)
The
strategic
position
Strategic
choices
Strategy
into
action
The environment
Expectations
and purposes Resources
and
competences
Corporate
-level
strategies
Business-
level
strategies
Development
directions and
methods
Organising
Enabling
Managing
change
Strategy
development
At the corporate level
What business are we in? What business should we be in? What are our basic directions for the future? Are these correct? What is our culture and leadership style? Does it need to be different? What is our attitude to strategic change? What should it be?
At the
business level
How can we compete successfully? Who are our key competitors? What is our sustainable competitive advantage?
How can we innovate?
What value do we add? How can we add more?
What strategic changes are needed? How can they be implemented?
What is the purpose of the organisation? And what are our strategies
to achieve this?
(adapted from Lynch, R, 2003)
STRATEGIC PLANNING PROCESS – THE
STANDARD VIEW
Existing
business
model
External
Analysis:
Opportunities
and Threats
Internal Analysis:
Strengths and
Weaknesses
Strategic
Position:
SWOT
Strategic
choice Implementation
Feedback
THE EMERGENT (OPEN SYSTEM) VIEW OF
STRATEGY DEVELOPMENT
Learning and
logical
incrementalism
Cultural and
political
processes
Unrealised
strategy
Planned
strategy The actual
or
realised
strategy
Externally
imposed
strategy
Emergent
strategy
1
2
3
4
5
events
DEVELOPMENT DIRECTIONS
Development directions are the strategic
options available to an organisation, in terms
of products and market coverage, taking into
account the strategic capability of the
organisation and the expectations of
stakeholders
What possible strategic directions are there?
Markets – expand/contract existing, add/substitute new
Products – abandon/use existing, develop new
Type of development – exit, organic growth, partnerships/joint ventures, mergers and acquisitions, national/international/global
METHODS OF STRATEGY
DEVELOPMENT
Internal Development
Build on and develop an organisation’s own
capabilities
Organic development
Mergers and Acquisitions
Take over ownership of another organisation
Strategic Alliances
Two or more organisations share resources and
activities
SUCCESS CRITERIA FOR
STRATEGIC OPTIONS Suitability
Whether strategy addresses circumstances in which
organisation is operating
Linked to strategic position
Rationale of strategy
Acceptability The expected performance outcomes (e.g. risk/return)
Meeting expectations of stakeholders
Feasibility Whether strategy can be made to work in practice
Linked to strategic capability
SOME READINGS TO ADD
FLAVOUR Bilton, C. & Cummings, S., (2010) Creative strategy: Reconnecting Business and
Innovation, Chichester, Wiley
Eisenhardt, K M, (1989) ‘Agency Theory: An Assessment and Review’, Academy of Management Review, Vol 14, No 1
Grant, R. M. (2010), Contemporary Strategy Analysis. Text and cases (7th ed.) Wiley: Chichester
Haberberg, A and Rieple, A (2008) Strategic Management Theory and Application Oxford: OUP
Hamel, G. and Prahalad, C.K. (1996) Competing for the Future. Boston: Harvard Business School Press.
Henry, A (2008) Understanding Strategic Management Oxford: OUP
Hill, C and Jones, G (2006) Strategic management: an Integrated Approach. (7th ed) Boston: Houghton Mifflin
Johnson, G, Scholes, K, Whittington, R (2012) Exploring Corporate Strategy, Harlow: FT Prentice Hall
Lynch, R (2003) Corporate Strategy, Harlow: Pearson
Ohmae, K. (1991), The Mind of the Strategist. New York and London: McGraw Hill.
Wickham, P. (2006), Strategic Entrepreneurship, (4e) Harlow: Financial Times Prentice Hall.