Chapter 2: Strategic Management, Innovation and Leadership Flashcards
strategy (aka long-term planning)
These definitions vary by person and their outlook
a specific pattern of behaviour undertaken by upper-echelon leaders with power in order to accomplish organizational goals
________ is therefore the essence of managerial activity
Strategy
Strategic management
best defined as a continuous process that requires the constant adjustment of three major, interdependent poles:
1) the values of senior management,
2) the resources available,
3) and the environment
the environment operates at two levels
One is the macro or societal environment that is external to an organization
The other is the micro or specific environment.
macro environment
Forces that profoundly impact at the level of industry, and include the economy, demographics, politics, technological developments, national culture and ideologies
micro environment
Forces that affect processes within the organization, and include local labour markets, suppliers, customers and specific technologies
The distinction between macro and micro environments is _______
dynamic
Elements in the macro environment constantly penetrate into the micro environment, and affect an individual organization
Strategic management process
Mission and goals Environmental analysis Strategic formulation Strategy implementation Strategy evaluation.
Mission and goals
involves top hierarchical leaders evaluating their position in relation to the organization’s raison d’être (mission), which indicates the direction in which senior management is going and the outcomes the organization is trying to accomplish (goals).
Environmental analysis
involves identifying various factors that might impact on the organization
STEEPLE analysis
common tool for classifying macro environmental influences into seven categories
Seven categories of STEEPLE analysis
socio-cultural, technological, economic, ecological, political, legal ethical
SWOT analysis
Micro environment: Strengths and weaknesses
Macro environment: Opportunities and threats
PRIMO-F
People, Resources, Innovation, Marketing, Operations, Finance – framework
Strategic formulation
involves upper-echelon leaders evaluating the interaction between strategic factors and making strategic choices that enable the organization to meet its business goals.
Strategy implementation
an area of activity that focuses on the role of leadership, as implementation often involves the adaptation and development of a strategy, as well as gaining support and commitment from those who are expected to carry it out.
Strategy evaluation
an activity that determines to what extent the actual change and performance match the desired change and performance
Figure 2.2, consists of five parts:
(1) the external or macro environment,
(2) the internal or micro environment,
(3) a hierarchy of strategy,
(4) levels of leadership and
(5) corporate performance.
- The external or macro environment
Applies STEEPLE framework to illustrate
Socio-cultural
factors include demographic trends, social mobility, levels of education, societal beliefs, customs, conventions, attitudes to paid work and values.
Technology
defining feature of modernity
Technologies are intertwined with innovation; they are also complicit in the greatest challenges we face today
Economic
Economic globalization underscores the need to examine the organization within its totality
Globalization impacts buyer–supplier and inter-organizational relationships, business cycles and unemployment
Ecology
refers to the way human activities impact the natural world.
.
The science is clear: on current trends in global warming, humanity faces an ‘existential crisis’
Politics
all levels of government impacting on work organizations, including fiscal policy, trade regulations, consumer protection, EU policies and directives, exchange rate policy, and geopolitical factors like military conflicts and cross-border terrorism.
Legal
includes employment legislation, consumer protection laws, and occupational health and safety legislation
Ethical
Ethical considerations reflect the growing concern for conducting business in an ethical way.
(2) the internal or micro environment,
The regular, patterned nature of work-related activities, technology and processes that is repeated day in and day out in the organization.
can be analysed through a PRIMO-F model
- A hierarchy of strategy
Conventional wisdom identifies a hierarchy of strategy: corporate, business and functional
They added a fourth: TEAM
Corporate-level strategy
Describes an organization’s overall direction in terms of its general philosophy towards the growth and the management of its various operating units
Corporate-level strategy involves at least four types of leadership initiative:
1) establishing investment priorities;
2) initiating actions to improve the performance of those business units;
3) finding ways to improve the synergy between related business units;
4) making decisions dealing with diversification.
Business-level strategy
deals with decisions and actions pertaining to each business unit, the main objective being to make the unit more competitive, or in non-profit organizations to improve or maintain services at reduced costs.
This level of strategy addresses the question ‘How do we compete?’.
Functional-level strategy
relates to the major functional operations within the business unit, including R&D, marketing, manufacturing, finance and HR.
Primarily concerned with maximizing resource productivity and addresses the question ‘How do we support the business-level strategy?’.
Team-level strategy
relates to unit or team operations and activities within major functional operations and is typically concerned with implementing the functional strategy and addresses the question ‘How do we support the functional-level strategy?’.
- Levels of organizational leadership
Vertical levels of leadership in the organization, from executive to first-order, second-order and team leadership
Different levels of leadership match this hierarchy of decision making.
- Organizational performance
‘Do certain leadership behaviours actually improve and sustain performance outcomes at the individual, group, and organizational levels?’
Innovation
defined as the process of coming up with good new ideas and making them work technically and commercially
only counts as innovation if it produces something that ultimately will be sold to customers, or, in the public sector, that will result in ‘more for less’
Incremental innovations
improve existing goods, services, processes and management practices, techniques and structures: a more efficient vacuum
Breakthrough innovations
enable organizations to ‘do things differently’. Breakthrough innovations introduce wholly new products and services, such as the iPhone
The OECD identifies two main types of innovation:
Product innovation:
Process innovation:
Product innovation:
the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics.
Process innovation:
the implementation of a new or significantly improved production or delivery method. This includes significant changes in management practices, techniques, equipment and/or software.
Disruptive innovation
occurs when a company – usually smaller and with fewer resources than the market leaders – is able to enter a market and mount a successful challenge to those who have dominated it.
Enablers of innovation within an organization
include the available human knowledge and resources, positive innovation strategies, organizational cultures and practices that encourage and facilitate creativity and innovation and leadership
Organizational creativity
the generation of ideas that are both novel and useful
Three main factors contribute to individual or small team creativity:
expertise, creative-thinking skills, and intrinsic motivation
The main factors within the wider work environment that influence employee creativity are:
managerial and supervisory direction and encouragement, the organizational ambition to innovate, and the availability of resources
Innovation involves a number of different processes:
creative thinking and action in order to produce new ideas; evaluation of the outcomes of this creative thinking and making decisions about whether to proceed and, if so, how; and development and implementation of the ideas so that they become innovations that are technically and commercially viable
Stages of the innovation process
Creative ideas, selection and development, implementing, marketing
Followership
refers to the behaviours of followers, which emerges from the leader–follower influence relationship
ambidexterity
Maintaining a balance between exploration and exploitation
Evaluation and Criticism of the core concepts and strategic decision-making process
1) neoliberalism is more than just an economic system
2) the research and narrative to be power blind
3) tendency to fetishize the role of charismatic leaders in enabling innovation, while the mediating effect of employees with creativity or the state is ignored or downplayed.
corporate ideology
the major beliefs and values expressed by upper-echelon leaders that provide leaders and followers with a frame of reference for decision making and action
