What is strategy?

Question 1

Chandler

Answer 1

1962: Looked at Du Pont, GM, Standard Oil, and Sears Roebuck - had a growth and diversification strategy which led to them adopting the M-form: structure follows strategy

Question 2

Hall & Saias

Answer 2

1980: Strategy follows structure - e.g. a multidivisional structure biases a firm towards a conglomerate strategy

Organisational form constrains strategic choices

Question 3

Taleb

Answer 3

2013:

Strategy not important - can’t anticipate shocks (Black Swans)

Strategy is important - we can be prepared for the worst and build a resource base that will survive (antifragility)

Question 4

Courtney et al.

Answer 4

1997: Four levels of uncertainty: 1) Clear enough future 2) Alternate futures 3) Range of futures 4) True ambiguity Strategy can bet big, or wait and see E.g. SpaceX - space tourism, which is true ambiguity!

Question 5

Wernerfelt & Karnani

Answer 5

1987: Two trade-offs: 1) Acting early (for first mover advantage) vs. acting later (once uncertainty is resolved) 2) Focusing resources on one scenario (economies of scale) vs. spreading resources on several scenarios (maintaining flexibility) Big firms cope better with uncertainty so can wait and still overcome first mover advantages - e.g. Samsung in the smartphone business

Question 6

Mintzberg

Answer 6

1990: “Structure follows strategy…as the left foot follows the right” - it’s a continuous process!

Question 7

Alchian

Answer 7

1950:

Evolution and uncertainty and the need to adapt - firms end up profit maximising

Question 8

Quinn

Answer 8

1978 Logical incrementalism: - Strategy doesn’t matter because we can’t predict the future - Strategy does matter because it gives a sense of direction: plans are frameworks whose future branches are unclear; proceed flexibly from broad concepts to specific commitments

Question 9

Whittington

Answer 9

2000: There are four theories of strategy: classical, evolutionary, processual, and systemic - on a continuum of deliberate to emergent, profit maximising to pluralistic (other objectives)

Question 10

Brews & Hunt

Answer 10

1999: Specific plan = intended strategy; incremental changes that follow = emergent/realised part of the firm’s deliberate strategy

Unstable environments: planning capabilities are far better developed, formal plans more amenable to change

Question 11

Shapiro

Answer 11

1989:

Strategic decisions = long term commitments

Tactical decisions = short term responses to current environment

Question 12

Grant

Answer 12

1993: Strategic planning as a… 1) mechanism for control 2) way to coordinate decision making 3) way to aid performance targeting 4) way to provide coherent direction for the firm

Question 13

Langley

Answer 13

1989: Strategy is about the process of analysis, not the outcome - helps 1) information, 2) communication, 3) direction and control, and 4) symbolism

Question 14

Beinhocker & Kaplan

Answer 14

2002: The strategic-planning process should not be designed to make strategy - this happens away from the boardroom. Instead, the goals of mental preparation and increased innovativeness should be implemented. E.g. GE are quick at acquisitions because of their strategy process