Chapter 2 - The Process of Strategic Leadership Flashcards
Three Strategic Planning Processes
Planned
Visioned
Discoverd
What is the planned process?
Management makes a plan of action that puts the strategy in place by moving the business form where it is in terms of resources and organization to where it needs to be.
Works well in static and stable situations of mature industries.
Steps of planned process
- Assess performance
- Describe the current situation
- Analyze the internal environment
- Analyze the external environment
- Assess fit
- Provide alternative strategic solution
- Select a strategic solution
- Implement the solution
Weakness of planned process
Assumes the information needed is available for analysis and can be used to produce a rational decision.
What is the visioned process?
Vision statement of what the company should look like on the other side. Using a vision allows for flexibility since it does not impose conditions on how the business gets there
Steps of vision process
- Establish pre-conditions
- Create the vision
- Sell the vision
- Enact the vision
Weaknesses of the vision process
Vision is an abstraction that may not be able to be useful by itself.
What is the discovered process?
Assumes that the environment is too complex and or rapidly changing for consensus about strategy to be reached.
Encourage and empower people to find new things to do and new ways of doing old things. Innovation: includes process improvement, product and service, strategic “evolving” process.
Steps of Discovered process
- Establish pre-conditions
- Find ideas
- Develop ideas
- Prune/fertilize innovations
Weaknesses of the vision process
Bureaucratic control systems gives managers greater ability to block ideas.
Strong cultures that prefer stability can limit innovation.
Individuals of the organization my not have the mindset for innovation.
People have a hard time admitting mistakes which can cause a lack of innovation.
Total Approach
Planned, Visioned, Discovered all together.
Prior hypothesis bias is:
A decision maker with a strong belief about a relationship between two variables makes decision on that belief even though it is wrong.
Escalating commitment (bias):
Decision maker, having already committed significant resources to a strategy, will commit more resources to the project even after receiving feedback that it is failing.
Reasoning by analogy (bias);
When faced with complex or novel situation, the decision maker thinks back to a similar situation and then transfers the lesson from that situation to the present one.
How representative (bias):
The decision maker may generalize from a vivid example that a single number or a small sample is inappropriate. Amazon.com BOOM everybody jumped on board b “crashed”
