Strategic management (other models of strategy) Flashcards
OTHER MODELS OF STRATEGY
Apart from rational and emergent strategy, what are the 10 other approaches/models of strategy?
- complexity and chaos theory
- institutional theory
- the ecological view
- the relationship between strategy and objectives
- human behaviour and strategic choice
- incrementalism
- competitive structures
- co-operation and networks
- game theories
- innovation and knowledge-based theories.
OTHER MODELS OF STRATEGY - COMPLEXITY AND CHAOS THEORY
Although often referred to as a joined approach to the theory of emergent strategy, it is important to be able to differentiate between the two different aspects.
What does complexity derive from?
In relation to complexity, what does systems theory suggest?
What does chaos derive from?
What does it recognise?
In relation to chaos, what is the ‘butterfly effect’?
Complexity = derives from the recognition that organisations exist on a day-to-day basis due to the interaction of different aspects of the systems that coexist
Systems theory suggests that complexity is linked to the relationships between those attributes
Chaos = derives from the relationship between the system and the people who operate within that system
= recognises that while the system can be structured and defined, the irrationality of human behaviour can always introduce the risk of chaos
The butterfly effect = the recognition that a small move or change in 1 part of a system can have a much larger impact elsewhere
OTHER MODELS OF STRATEGY - INSTITUTIONAL THEORY
All organisations operate within an environment that is populated by what?
(the influence, restriction and drive of these on the development of strategy needs to be understood and taken into consideration)
Institutionalisation may be what?
Name an example.
What else may institutionalisation be based around?
Name an example.
An organisation may choose to do what?
by a range of differing institutions, and a complex web of institutional behaviour
May be sector based e.g., dominance of the ‘big four’ accountancy firms in the UK audit and accountancy market
May be based around culture, geography and economic structures e.g., the different reporting requirements and expectations of stock exchanges in different countries
an organisation has the choice of adapting its strategy to the surrounding institutional behaviour, or attempting to challenge and change the perceived common behaviours
OTHER MODELS OF STRATEGY - THE ECOLOGICAL VIEW
What do ecologists argue? (2)
What do Iansiti and Levien (2004) suggest?
- argue that any organisation will evolve its own ecosystem, operating within the institutional structures that surround it
- Part of their argument is that development is incremental and will lead to 1 of 3 outcomes: (1) a change to the perceived norm, (2) an adaptation to the surrounding structures or, (3) the decline of the organisation
suggest that each member of a business ecosystem will ultimately share the fate of the network as a whole, regardless of individual strength
OTHER MODELS OF STRATEGY - THE RELATIONSHIP BETWEEN STRATEGY AND OBJECTIVES
What is the textbook presumption regarding the relationship between strategy and objectives?
Some writers on strategy believe what?
What perspective does Andrews (1987) take?
What does his view assume?
presumption that wider strategic vision can be segmented into one or more focused objectives
Believe that it is not possible to separate the strategy itself from the objectives that it is trying to achieve
suggests that the strategic objectives of an organisation are revealed through the decisions that are made through plans that are implemented within the organisation
assumes that decisions will determine the strategy, rather than the other way around
OTHER MODELS OF STRATEGY - HUMAN BEHAVIOUR AND STRATEGIC CHOICE
What is a significant difference between rational strategy and emergent strategy and why is it important?
What does Johnson et al. (2017) suggest?
What are the 4 phases the approach can be split into?
What is it important to recognise in each phase?
the concept of behaviour = when developing strategy, need to be aware of the potential for different individual behaviour and response
suggests that planning as a human concept will significantly influence the direction of strategic thinking and strategic outcome
- Recognition = an individual will recognise a strategic problem and once it is shared with others, the organisational drivers start to take effect
- Diagnosis = the identified strategic problem will be diagnosed by 1 or more individuals = their conclusions are likely to differ due to their experiences
- Alternative solutions = individuals will severally and jointly develop alternative approaches to resolve a problem
- Selection and action = the alternative solutions will need to be screened, one selected and implemented (by 1 or more individuals)
important to recognise the interaction between individual and group behaviour
OTHER MODELS OF STRATEGY - INCREMENTALISM
What does Mintzberg (2008) suggest?
What are the 2 academic approaches to incrementalism?
What is disjointed incrementalism?
Mintzberg (2008) = a key component of effective emergence is that of a ‘learning school’ where the drive is description rather than prescription
- Linblom (1959) = suggested strategy was not a neat, controlled process but a messy one in which the strategists try to cope with the new world, which is too complicated for them
Disjointed incrementalism = organisational change was based around reactive consideration of outcome rather than the moulding of a preconceived vision
- Quinn (1980) = Logical incrementalism = the process of strategic development is seen as a ‘continuous, pulsing dynamic’
OTHER MODELS OF STRATEGY - COMPETITIVE STRUCTURES
What does Ohmae (1982) suggest a good business strategy is?
What does he suggest and what are his 3 Cs?
Ohmae (1982) suggests that ‘a good business strategy is one by which a company can gain significant ground on its competitors at an acceptable cost’
He suggests that successful strategic development relies upon the recognition and interplay of a strategic triangle referred to as the ‘3 Cs’:
(1) Customers = those who will fund our organisation as the result of a successful business cycle
(2) Competitors = those who will seek to take our customers, or those whose customers we wish to attract
(3) Corporation = the organisational structure itself and how it is designed to operate within the various competing environments where it is situated
OTHER MODELS OF STRATEGY - COMPETITIVE STRUCTURES
What are the 3 core aspects of Porter (1980)’s thinking around competitive structures?
Porter (1980):
1. There is a difference between the development of strategy and the effectiveness of an operation – the former being conceptual, the latter being based in reality
2. Competitive strategy requires an organisation to recognise how it is differentiated from its rivals
3. The achievement of a sustainable strategic position will require an organisation to recognise that it cannot be all things to all people = need to include trade-offs within its business model
E.g. budget airline Ryanair offer low-priced seats, but the trade-off price is the level of service and facilities
OTHER MODELS OF STRATEGY - CO-OPERATION AND NETWORKS
What is the concept of a strategic network?
The development of a strategic network can often build what?
Name an organisational example.
It is important for any organisation to recognise what? (2)
Strategic network = a recognition by an organisation that there will be players in the competitive field with whom it is sensible to co-operate, and/or network, to enable mutual benefit
= sometimes more beneficial than spending time and resources to thwart the competition
Often build a supply chain and sourcing efficiency into the respective operations of organisations that are otherwise in competition
E.g., Tesco plc announced it would be working strategically with Carrefour to develop a sourcing network
(1) the breadth and depth of the economic and political network within which it operates, and (2) its competitors within the network with whom it might be beneficial to co-operate strategically
OTHER MODELS OF STRATEGY - GAME THEORIES
Game theory is often aligned with which 2 differing but connected approaches?
What are the 4 potential outcomes from game theory?
- Mathematical game theory = can be applicable where there is only a limited range of clear outcomes for a particular scenario and differing values can be associated with each potential outcome
- ‘war gaming’ = there are no predefined outcomes, but the intention is to consider the organisation’s next move (strategy) and then the likely reaction of and impact upon differing players (competitors)
(1) lose: lose, (2) win: lose, (3) lose: win, (4) win: win
OTHER MODELS OF STRATEGY - INNOVATION AND KNOWLEDGE-BASED THEORIES
Nonaka and Takeuchi (1995) discuss the need for managers to recognise the difference between tacit knowledge and explicit knowledge in their ability to be innovative in their strategic thinking.
What is knowledge?
What is tacit knowledge?
What is explicit knowledge?
What are the 4 processes that Nonaka and Takeuchi suggest are in play to enable knowledge to be converted into action?
What is this aligned with?
Knowledge = the ability of the human brain to consider, contemplate and utilise refined data, together with perception, learning and experience
Tacit knowledge = knowledge we know implicitly (inside ourselves) and for which there is normally a combination of intangible and tangible evidence
Explicit knowledge = knowledge we know formally, where is always tangible evidence
- Socialisation = the sharing of tacit knowledge
- Externalisation = the conversion of tacit knowledge to explicit knowledge through analysis and application
- Combination = the formal transfer of knowledge from one person to another in some form of organised manner
- Internalisation = the need for a human being to take explicit knowledge back into tacit form
These concepts could be aligned with incrementalism = the gradual building of the knowledge of the brain that is incremental, and in turn will affect the strategic thinking and development in an incremental manner
