Ch.14 Strategy and development processes Flashcards
What is Deliberate strategy development?
Deliberate strategy involves intentional formulation or planning.
Intentionality can take different forms:
1) intentionality of a
strategic leader (CEO, founder)
2) through a process of strategic planning involving many managers.
3) experiences as the external imposition of a strategy formulated elsewhere.
What is the role of the Strategic leader? What are the four elements used by strategic leaders?
Strategic leaders, like CEOs or founders, play a pivotal role in influencing the strategy of an organization.
- Strategic Leadership as Command: Strategy can be dictated by an individual, as seen in small businesses.
+fast strategy adaptation, sharp, innovative strategies. -hubris, excessive risk taking, irrelevant strategies. - Strategic Leadership as Vision: Leaders can set a vision, mission, or strategic intent that guides and
motivates others in the organization. Examples include Ingvar Kamprad at IKEA. - Strategic Leadership as Decision Making: Leaders make crucial decisions based on varied views, data
interpretation, and assert their authority to gain consensus. An example is Mary Barra at General Motors. - Strategic Leadership as the Embodiment of Strategy: Leaders can represent the strategy, either
unintentionally or deliberately, like Richard Branson with Virgin.
What is strategic planning?
Strategic planning: systematic analysis and exploration to develop an orgs strategy.
Strategies can develop through formalized strategic planning, often seen in larger organizations.
What are the four stages of the strategic planning cycle?
There’s a cycle starting with initial guidelines, followed by business-level planning, corporate-level planning, and finally setting financial and strategic targets.
What are the four potential pitfalls with strategic planning?
- Confusing planning with strategy management, 2. detachment from reality, 3. over-complex planning processes, and 4. dampening of innovation.
Research indicates that while strategic planning is common, there’s a shift towards more collaborative and emergent strategy development processes.
There’s a risk that the realized strategy differs from the deliberate strategy, causing a gap between intention
and reality. Managers should frequently verify if the intended strategy aligns with actual operations.
Describe Externally imposed strategy.
Sometimes, strategies are imposed by powerful external stakeholders.
In the public sector, governments might dictate strategic directions, as seen with schools or hospitals
underperforming in the UK.
In the private sector, businesses might face constraints or directed strategies due to regulations, parent
companies, or financial markets.
Activists, venture capitalists, and private equity firms (EQT, nestle - IPO) can also impose strategies on
companies, focusing on various aspects like performance enhancement, shareholder returns, or human rights.
What is Emergent strategy development?
Emergent strategy refers to strategies that evolve over time, resulting from a series of decisions rather than pre-
planned intentions (which forms a patterns that becomes clear over time). (Explains org strategy: not as a grand plan but as a developing pattern in a stream of decisions)
Describe the continuum of emergent strategy development processes. What are the three parts?
Logical incrementalism, political processes, and organizational structures and systems.
What is Logical incrementalism? What are the three key characteristics?
James Quinn introduced the concept of logical incrementalism, suggesting that strategy evolves by learning and experimentation rather than global formulations.
Key characteristics include:
Environmental Uncertainty: Constant environmental scanning is encouraged.
General Goals: Specific objectives might be avoided early on to prevent stifling innovation.
Experimentation: Managers aim to develop a secure core business and then experiment with side ventures.
What is strategy as the Outcome of political processes? What are people likely to be influenced by?
Political view of strategy development: This perspective views strategy as the result of bargaining and negotiation among powerful interest groups(or stakeholders). Power dynamics within an organization.
In approaching strategic problems, people are likely to be differently influenced by:
Position and personal experience - from their roles within the org.
Competition for resources and influence - between diff subsystems and people within who wants to
perserve/enhance their position.
The relative influence of stakeholders - on different parts of the or.
Different access to information - given their roles and functional affiliations.
What is strategy as the result of Organisational structures and systems? What are the two different explanations to consider?
Strategy can emerge from the inherent structures and systems within an organization.
Echoes here of logical incrementalism but less emphasis on deliberate experimentation. Emphasis rather on the influence of the structures, systems and routines that managers are familiar with and which guide and constrain
their decisions.
2 diff explanations to consider here: 1) strategy may be steered by managers’ attention to their specific contexts and how resources are allocated. 2) prior strategic decisions may guide later strategies.
Organisational structures and systems: What are the two main arguments underpinning this view?
Organizational Systems as Sense-Makers (of issues): Managers interpret issues based on familiar routines
and systems, which vary depending on their roles and positions.
Vertical reporting relationships in hierarchies - will focus managers’ attention on issues within their own part of the org. Ex. finance director primarily concerned with financial systems, while operations director
with operations.
Organizational Systems Provide Solutions to strategic issues: Systems and routines also offer solutions that managers can utilize when addressing problems.
But responses can differ depending on the context the managers are in and the associated systems and
routines. Ex. marketing managers vs R&D managers - each is drawing on the context they find themselves in and the associated systems and routines for dealing with such problems.
What are the two key insights of implications for managing strategy development?
The development of organizational strategy is multifaceted, often involving a combination of deliberate planning, political maneuvering, and the influence of existing structures and systems. Recognizing the interplay of these dynamics can inform how strategy is managed.
Key Insights:
Strategies emerge from both deliberate planning and emergent processes.
Perceptions of strategy development may differ among individuals based on their roles and the type of
organization they are part of.
Managing strategy development in different contexts: What are the three conditions?
Simple/Static Conditions: In environments that are straightforward and stable, historical data analysis and
forecasting can be used for systematic strategic planning.
Dynamic Conditions: In changing environments, proactive measures like scenario planning or encouraging active
sensing of environmental changes are essential.
Complex Situations: In intricate settings, organizations may decentralize strategic decision-making to specialized
units or managers. In situations that are both complex and dynamic, decentralization is even more critical,
emphasizing experimentation and adaptability.
What are four elements of implications for managing strategy development?
Top Management’s Role in strategy development, The Roles of Strategic Planning, Diverse Roles at Different Organizational Levels, Strategic Inflection Points
