6 - Middle-In/Out radical change Flashcards
Lecture 7 Floyd & Lane Burgelman
The ecological perspective on strategic renewal
- What is it
- what did it say
- Based on environmental determinism, opposite of strategic choice
- Evolutionary perspective on what is important for (the survival of) strategic renewal
- Rules of evolution:
> variation in genes: caused by strategic renewal
>selection: environments dictates what works best
> retention: survival chances - It identified middle managers as scarce resource for which change initiatives compete
- strategic renewal as outcome of bottom up and top down change initiatives
Environmental determinism
- emphasis on
- Industry development
- Change dynamics
- Succes factor
- Ability to shape the industry
- Normative implication
- Development path
- Firm profitability
- emphasis on: Compliance over choice
- Industry development: uncontrollable evolutionary process
- Change dynamics: Environment select fitting firms
- Succes factor: Fitness to industry demands
- Ability to shape the industry: Low and slow
- Normative implication: Adapt to play by the rules
- Development path: Convergence towards dominant design
- Firm profitability: industry dependent
Strategic choice
- emphasis on
- Industry development
- Change dynamics
- Succes factor
- Ability to shape the industry
- Normative implication
- Development path
- Firm profitability
- emphasis on: Choice over compliance
- Industry development: Controllable creation process
- Change dynamics: Firms create fitting environment
- Succes factor: Manipulation of industry demands
- Ability to shape the industry: High and fast
- Normative implication: Innovate and thereby change the rules
- Development path: Divergence, create a new design
- Firm profitability: firm dependent
Burgelman - Coevolutionary Lockin
A positive feedback process that increasingly ties the previous success of a company’s strategy to that of its existing product-market environment
Burgelman - Strategy as a vector
The efforts to drive (focus) an organizations strategy in the intended direction with a total force equal to all the forces at its disposal.
- Everybody is looking to the same direction
- Convergence of individual believe and company code
Burgelman - Strategic actions
Induced Strategy
- Exploits initiatives within the scope of a company’s current strategy
- extend further in its current product market environment
Autonomous strategy
- Exploits initiatives that emerge through exploration outside the scope of a company’s current strategy
- provides the basis for entering a new product market environment.
Burgelman: strategic renewal
Induced strategy + Autonomous strategy
Role middle managers in strategic renewal
- Implementing top down changes
- Facilitating adaptation / learning in lower levels
- Developing and championing strategic initiatives
F&L - Strategic renewal
-sub processes
- Competence definition
- Competence deployment
- Competence modification
F&L - Strategic role conflict
- When managers have no consensus about need for change
- Conflict within individual managers and managerial roles
- Managers facing inconsistent behavioral expectations of both deploying existing competencies and experiment with new ones
F&L - strategic renewal
- Competence deployment
- the synoptic process wherein managers deploy resources to venture into new product market arenas or to reinforce an existing product market position
- Managerial activity involves adjustments to organizational structure, systems, and people to fit the strategy
- Change is based on an established strategic principle and is guided by an accepted definition of strategic ends and means, often in the form of a formal strategic plan.
F&L - Competence modification
- The process wherein managers
> recognize the need for change
>question the organization’s existing strategy and/or competencies
>encourage emergent & adaptive behavior - Established routines no longer fit the circumstances of the external environment
- Managerial attention shifts
>away from deploying existing competencies
>towards assessing the utility of the organization’s resources or the desirability of the strategy itself
F&L - competence definition
- Managers encourage experimentation with new skills and exploration of new market opportunities
- Core competencies and strategic position are contestable
- Represents the autonomous loop of strategic behavior
F&L - Roles strategic renewal
- TM
- MM
- OM
TM
- Ratifying (Competece Definition)
- Recognizing (Competence Modification)
- Directing (Competence Deployment)
F&L - Roles strategic renewal
- MM
MM
- Championing (Competence Definition)
- Synthesizing (Competence Modification)
- Facilitating (Competence Modification)
- Implementing (Competence Deployment)
F&L - Roles strategic renewal
- OM
OM
- Experimenting (Competence Definition)
- Adjusting (Competence Modification)
- Conforming (Competence Deployment)
F&L - Strategic role conflict
- versions
- Within individual
- Between individuals: horizontal exchange conflict
- Between individuals: vertical exchange conflict
F&L - Strategic role conflict within individuals
- Managers in boundary spanning positions more likely to experience role conflict
- No consistent evidence role conflict is a problem for (top) managers
- Number of roles managers play
> Because middle managers are between top management and operating management, they are more likely to have to take on multiple roles, and therefore more likely to experience within individual conflict
F&L - vertical exchange conflict
- Why does it happen
- Differences in technic expertise creates different mental frameworks which cause managers to notice different cues and create different interpretations of cues
- Different level managers develop different expectations of strategic change
- External environment may also vary for each management level
- Top management primarily focuses on the capital market
- Operating managers are closer to customer concerns, they see the need for investing in new competencies sooner than top managers.
- Strategic role conflict between individuals of different management levels is more likely to occur in dynamic environmental conditions
F&L - horizontal exchange conflict
More likely in OM
- More people in OM
- More about small details and technicalities then TM
When top management experiences role conflict, it is likely to pass over to lower management, due to conflicting expectations
F&L - Managing roles for strategic renewal
- Bureaucratic control
- Market Control
- Clan control
F&L - Managing roles for strategic renewal
- Market Control
- Compare prices to evaluate outcomes and opportunities.
- Has minimum information and social requirements
- Vulnerable to opportunism and uncertainty because they presume self-interested actors
- For effective market control: minimal goal incongruity between the parties, minimal equivocality of information.
F&L - Managing roles for strategic renewal
- Bureaucratic Control
- Rules, policies, hierarchical authority, and written documentation to standardize behavior and assess performance.
- Less vulnerable in terms of opportunism, Most demanding information requirement
F&L - Managing roles for strategic renewal
- Clan Control
o conveys information through traditions, assumes that members’ commitment is driven by organizational identification and common culture
o clans reduce uncertainty by inventing both the questions and the answers within their view of the world
o This communality reduces opportunism and equivocality due to the greater similarity of norms, beliefs, and priorities between members
o Maximum tolerance of ambiguity in social arrangements, therefore ideal when behavior specificity and output measurement not possible
