Lecture 2 - Definitions Flashcards
Who? Basic Financial Planning (Budgeting)
James McKinsey (1889-1937)
Who? Long-range planning (extrapolation)
George Steiner (1960s)
Who? Strategic (externally oriented) planning
Alfred Chandler (1962)
Who? Strategic management
Igor Ansoff + Porter, Barney (1980s)
Who? Complex Systems Strategy
Mintzberg, Eiseinhardt, Prahalad, Hamel, D’Aveni (1990s)
What? Basic Financial Planning (Budgeting)
Budgeting would support strategic objectives of firm and all strategic choices
What? Long-range planning (extrapolation)
5 year budgets and detailed operating plans
What? Strategic (externally oriented) planning
External events influencing corporate performance
Business units strategic tactics vs. corporate strategies
Salaried professionals vs. traditional owner managers
What? Strategic management
Pillars:
1) Strategic planning
2) Capability of a firm to convert written plans into market reality
What? Complex Systems Strategy
…failure of equilibrium strategic model…
Environment must be understood in terms of its complexity, chaos and ecological constructs
ESM
Equilibrium strategic model
What the firm has done in the past it will do in the future with the same success
Strategic management is interested in:
The whole of the business
Strategic management asks:
How can companies compete successfully?
Why do some companies succeed while others fail?
What managers can really do?
Chandler’s definition of strategy
‘..the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resource necessary for carrying out these goals’
‘..the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resource necessary for carrying out these goals’
Alfred Chandler (Strategic planning)
‘Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value’
Porter
Porter’s definition of strategy
‘Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value’
‘Strategy is firms’ theory about how to compete successfully’
Jeremy Barney
Jeremy Barney’s definition off strategy
‘Strategy is firms’ theory about how to compete successfully’
Johnson, Scholes and Whittington, 2008 (6)
the direction and scope of an organisation
over the long term
which achieves advantage
in a changing environment
through the configuration of resources and competences
with the aim to fulfil stakeholder expectations
the direction and scope of an organisation
over the long term
which achieves advantage
in a changing environment
through the configuration of resources and competences
with the aim to fulfil stakeholder expectations
Johnson, Scholes and Whittington, 2008
What are stakeholders?
Individuals or groups that depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends
Individuals or groups that depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends
Stakeholders
3 pillars of strategy:
Content
Process
Context
Strategy context
The environment where an organisation operates
Political, social, economic and competitive environment conditions
Corporate culture, structure and organisational politics
Content of strategy:
Corporate level
Business level
Operational level
Corporate-level strategy
Overall purpose and scope of an organisation and how to add value to business units
(PRODUCT-MARKET DOMAIN)
Business-level strategy
The way a business seeks to compete successfully in its particular market
(COMPETITIVE APPROACH)
Operational-level strategy
How different parts of the organisation deliver the strategy in terms of managing resources, processes and people
(RESOURCES & CAPABILITIES)
Process of strategy
How the strategy will be developed, and who will be involved
Deliberate vs. emergent strategies
Strategy statements should have … aims:
3 aims:
Fundamental goals organisation seeks which draw on stated mission, vision and objectives
Scope or domain of organisation’s activities
Particular advantages or capabilities it has to deliver all of these
Mission
Overriding purpose in line with values/expectations of stakeholders
Vision
Desired future state of organisation - ASPIRATIONS
Objectives
Quantifiable statements of organisations goals over some period of time
Precise statement of goal
Scope
Customers, geographical location, and extent of internal activities (vertical integration)
Advantage
Organisations competitive advantage
Strategic capability
Resources, activities, processes
Strategic position
Impact on strategy of:
external environment,
organisation’s strategic capability (resources and competences)
organisation’s goals
organisation’s culture
Strategic choices:
Options for strategy in terms of direction and methods
Strategy in action:
How strategies are formed and implemented
Emphasis on:
practicalities of managing,
planning and allocating resources,
forming and re-forming organisational structure,
managing strategic change
