HT6 - Corporate Strategy

Question 1

Mintzberg & Waters (1985)

Answer 1

deliberate strategy: strategy is realised as intended
emergent strategy: pattern or consistencies realised despite or in the absence of intentions
planned strategy: environment assumed to be constant, mostly standard strategies
entrepreneurial strategy: one person controls an organisation and imposes their vision on it, mostly young and small companies or emergency
ideological strategy: collective vision of the organisation, roots in collective experiences and history
umbrella strategies: partial control by the leader, general guidelines of thinking, “deliberately emergent”
process strategy: leadership controls the process of strategy making, but leaves the content to others
consensus strategy: grows out of mutual adjustment among different actors - developing a pattern
imposed strategy: environment forces an organisation into a pattern of actions

Question 2

Porter (1989)

Answer 2

Strategies of diversified company - competitive: on a business unit level – how to gain competitive advantage
corporate (companywide): what businesses the corporation should be in and how the corporate office should manage the array of business units
diversification has costs - adds value when: attractive industry, cost-of-entry low, business unit gains advantage from having the parent company
Ways to enter: portfolio management (keeping leadership), restructuring (transforming the new unit), transferring skills, sharing activities (cost-benefit)

Question 3

Wernerfelt & Karnani (1987)

Answer 3

Under uncertainty, there is a trade-off between focus (concentrating on one tech) and flexibility (diversification)
3 strategic steps under uncertainty: wait (no investment until 2nd period), focus (investment in 1 tech in 1st period), flexibility (investing in multiple tech)
Sources of uncertainty: demand (market size, design, distribution), supply (new tech, internal ops), competitive uncertainty and externalities
Acting early if: many first-mover advantages, low risk-aversion, ability to influence uncertainty

Question 4

Mintzberg & Ansoff (1996)

Answer 4

Criticism of the design school of strategy
design school: strategy formulation is a tightly controlled process of conscious human thought, action follows formulation
features: responsibility on CEO, discussion is informal, strategy is unique, emerging strategies are fully formulated, can be explicitly articulated and followed
Critique: strategy formulation should be learning instead of a process of conception, uncertain strengths and weaknesses - steps
articulation can lead to confusion, principal - agent problem (planners - executers), so existential model of learning is better

Question 5

Mintzberg (1996)

Answer 5

Story of Honda told by BCG: deliberate steps towards strategy formulation, recognising and targeting new market then scale economies
Exectuives: no clear strategy and disorganised company, but flexibility in production and good technology
Strategic planning and case solving might result in overlooking the process through which organisations experiment, adapt and learn - “adaptive persistence”