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Strategy Management Edition (12th)

STRATEGIC MANAGEMENT LIVING CASE STUDY GUIDE for BUS 48500 and BUS 59000

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INTRODUCTION

A strategy is just an overall approach for making a way forward into the future, it is a

way of surviving, and ideally, of thriving. Just as commanders with their armies have

strategies to withstand, subdue, and triumph over their opponents, so organizations

have strategies or very broad plans to withstand, sometimes subdue, and often

triumph over their competitors. The objective is to survive, to thrive, and to

contribute.

To strategically manage its journey, the organization must engage in activities that

span three time horizons: the past, the present, and the future.

Understanding the past of the organization requires knowing and understanding the

meaning and trajectory of its historical journey. To understand the present, or its

current situation, the organization must consider both its internal context and the

context around and outside of it, so it can insightfully assess its strengths, weaknesses,

opportunities, and threats. The organization must also be clear about the strategies

that have brought it to the present point in time. Finally, and most importantly, the

organization must focus upon the future. To accomplish this in a meaningful way, the

organization needs to have a clear understanding of why it exists (purpose), of what is

most important to it (values), of what it wants to become and to achieve (vision), of

how it wants to go about making a value-added impact on its context (mission), and of

the long-term goals or mileposts it must reach along its journey.

With its history in mind, a comprehensive understanding of its current context and

path, and a clear sense of its identity and direction, the organization can then seek out

the best paths, the strategies, that will bring it to its envisioned future. The

organization must also develop detailed, actionable plans for how it will organize to

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implement and to evaluate its strategies, yielding insights that will enable it to

continuously adapt its strategies and their execution going forward.

This Guide will engage you in each of these activities of strategic management. You

will study the history of the organization to identify those meaningful things that it

should strive to take forward into the future. You will examine the purpose of the

organization in its various facets, including its values, vision, mission, and long-term

goals. You will look at what the organization has and what it does with what it has, i.e.,

its internal environment. You will take stock of the external environment in which the

organization exists and with which it interacts. You will examine its current strategies

and evaluate their effectiveness. You will identify the possible paths forward for the

organization, or the potential strategies that it might use to achieve its vision of the

future, selecting the best of these. You will engage in some action planning to

implement or to make them happen. You will also consider what the organization

must do to maintain or adjust its course, as the ever-changing situation demands.

Each of these activities work together in a system. On the surface, they may just

appear to be a list or sequence of things an organization must do to develop or

formulate a strategy. In a much more complex sense, and more realistically, each

activity informs every other activity, and the outcomes of each activity have

consequences for each of the others. They are a richly interconnected and ongoing

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loop of activities that occur over time, repeatedly. They are not a simple “once and

done” series of tasks. This ongoing evaluation, reformulation, and implementation of

strategy is what is truly the strategic management of an organization. This Guide helps

you jump into the loop and ride one revolution of it, to help you prepare for the long

and ongoing ride in the real world.

How to Use this Guide This Guide is designed to help you write an insightful, useful strategic case study for an

organization. There are a series of Sessions in this Guide. Each session will help you

to prepare a corresponding section of your final strategic case study paper. Sessions

may be completed by you individually, by a team, or some combination of these, as

indicated by your professor. There are three main parts in each session, each with a

specific purpose to help you write a compelling case study: introductory material,

research and analysis questions, and final case write-up instructions. Each of the

three parts of each session build upon one another, leading you toward the

development of one or more sections of your final strategic management case study

paper. Work through each part in order.

First, read the introductory material at the very beginning of the session. It will help

set the context for the work you will do and provide any additional conceptual

information that you may need in advance of your work.

Figure I.1: Relationship between the LCS Guide and the LCS Paper

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Second, work through the research and analysis part of the session. In this part of the

session, you are presented with a series of steps, each of which contains one or more

questions that you will need to answer to build the content for your paper. Prepare

the answers to these questions using high-quality research sources. (There will often

be suggestions about the best resources to use, right within the session.) Be sure to

carefully document the sources from which you draw your answers, noting the author,

title of the source, date of publication, and the place from which you obtained the

source. Please follow APA guidelines for formatting this information.

Once you have gathered all the necessary information to answer the questions,

prepare a well-written response to each question in each step. Cite the sources you

use to give those answers immediately following their use, and then provide a

reference to each source at the end. You may be asked to share all or portions of

responses, and to review and give constructive input to the responses of others, if you

are working in a group or team setting. Finally, work through the case write-up part of

the session. This part provides you with guidance on how to integrate the responses

to your questions into a draft section of your strategic case study.

Once your case write-up work is complete, you can transfer it to the evolving draft of

what will become your final strategy paper. A template in the form of a Word docx is

provided with all the major headings of the final paper already in place (for an example

see Appendix A). The template should help simplify formatting as well as serve as a

checklist to help you make certain that you cover all the important topics of a strategy

paper. Figure 1.1 illustrates the process of transferring the individual work of each

session into the final paper. When the sessions are complete, you will have a rough

draft of your final paper, ready for final integration, proofreading, and editing.

If you are diligent, your final case study paper will not only be a fine case study of value

to the organization on which it is based, it also will be a reflection of all you have

learned in this course and in all of your courses up to this point. It will also reflect your

individual persistence and conscientiousness. In this way, it will also be deeply valuable

to you, and be a model of your best work for current and prospective employers.

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STRATEGIC THINKING, LEARNING, LEADING, AND MANAGING Setting Terms, Understanding Systems, The Two-Sided Coin, and Seeing the Journey as a Road Trip

his week you will prepare to identify the target system or organization you will

study in your strategic living case study. Whatever your final target of study, you

will need a conceptual context to understand the strategic management

process, and this conceptual context will make a difference in how you see the

strategic management process and how you engage in it now and in the future.

Important Terms Aristotle taught that to think effectively in logic, mathematics, life, and work we should

set our terms carefully before we try to use them to think and learn. For example, the

terms in a syllogism must be clear and accurate if our conclusions are to be valid, and

the terms in an equation must accurately describe the reality the equation is

representing or the solution to the equation will be useless.

Strategy. There are many definitions of strategy arising from diverse fields like military

engagements, politics, international relations, economics, business, game theory,

interpersonal interactions, personal development, etc. A general view of strategy is

that it is a way to bring about a desired future. We will develop this view further in

Session 2 and build upon it throughout our strategic living case study.

Thinking. This is a conscious, active, dialogic, cognitive process of our minds that is

closely and deeply connected with language, and it is often experienced as a “verbal

Session

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stream of consciousness” that makes new connections and creates meaning

(Fernyhough, 2010). We can choose our thoughts, and therefore we can lead and

manage our thinking (Doidge, 2007; Leaf, 2015; Leaf, 2018; Minirth & Meier, 2013;

Schwartz & Gladding, 2011).

Some people are good at thinking, some not so good, but we can learn how to think

better, and we can develop our thinking skills through persistent practice. Four

different but complementary ways of thinking are scientific thinking, systems thinking,

hermeneutical thinking, and historical thinking. Life-long learners should strive to

increase their ability to engage in each of these ways of thinking, and a sound learning-

by-doing method can alternatively distinguish and integrate these four ways of

thinking in a practical approach that we can use in everyday life and work.

Learning. As we think, make new connections, and create meaning, we begin to learn.

People have many different ideas about what constitutes “learning.” If we are learning,

then we are coming to know, and philosophers have debated different theories of

knowing (epistemology) through the millennia. How can we know that what we think

we know about reality is true?

Cognitive pragmatist epistemology would encourage us to perceive learning and

coming to know as a dialogic, iterative, learning-by-doing process where true thoughts

about reality work in experience, where our repeated efforts to apply what we think

we know to life and work yield increasingly more fruitful insights into what is actually

true about reality.

Leading. Sometimes the term “leading” is viewed as a stage of managing, e.g., the four

functions of managing are described as planning, organizing, leading, and controlling.

However, sometimes the term “leading” is viewed as distinct from managing. Drucker

and Bennis say, “Management is doing things right; leadership is doing the right

things.” Covey says leading is the “1st creation” (beginning with the end in mind) and

managing is the “2nd creation” (putting first things first). Leading is like the work of the

architect; managing is like the work of the construction manager. Some say that

leadership is about “effectiveness,” while management is about “efficiency.”

Leadership is also about inspiring and guiding others toward a common goal, a

shared vision, and a better future. Situational leaders adapt their actions to what is

needed in constantly changing circumstances. Servant leaders direct their actions to

benefit others more than themselves. Transformational leaders focus upon a bright

future that inspires their followers to achieve more than they thought possible. Great

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leaders combine these leadership behaviors and enable their followers to progress

on a journey to a better tomorrow.

Managing. The classic four functions of managing are 1) planning, 2) organizing, 3)

leading, and 4) controlling. In this view, managing is the overarching term, but it may

be that the function of “leading” involved in this view is a subsidiary form of leading or

a different iteration of leading than the leadership defined and described above. In any

event, everyone needs to lead themselves and to provide some level of leadership in

their work to “begin with the end in mind” and to move toward that future through all

their efforts. Also, everyone needs to manage themselves and to provide some level

of management in their work to “put first things first” so that the goals of leadership

begin to materialize.

Strategic Thinking. Strategic Leading. Strategic Managing. Sometimes these terms are

used in different contexts or fields to distinguish aspects of what is necessarily an

overlapping process. Sometimes these terms denote different perspectives or

emphases, but they can also be used as synonyms of a common process that powers

the journey of individuals and organizations.

Strategic Management. This term is widely used to describe the overarching process

that subsumes, integrates, and guides all the disciplines, subjects, fields, functions,

skills, and activities involved in leading and managing an organization on its journey

from the past, through the present, toward a desired future.

Many definitions, descriptions, and prescriptions for strategic management exist. They

are not always contradictory. Indeed, many times they are complementary. They

resemble the different accounts of the elephant by the blind men who each touched

a different part of the elephant and developed a tentative hypothesis or description of

the whole elephant from their perspective of the part they touched.

Our working definition or description of this overarching process is this: “Strategic

management is a pattern in a stream of proactive seeing, thinking, feeling; that leads

to a pattern in a stream of future-changing decisions; that leads to a pattern in a

stream of hopeful speaking; that leads to a pattern in a stream of leveraged actions;

from the results of which we learn new insights that enrich how we see, think, and feel

going forward toward our Guiding Stars.”

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Living Systems A system refers to a whole with a purpose comprised of interdependent parts, where

any change in one part, however small, results in changes in the other parts, and in the

whole.

Biological systems are living systems. Individuals are living systems. Businesses,

organizations, and all types of social systems are living systems too made up of

individuals and smaller social systems.

Traditional strategic management studies in business schools often stress the need to

do strategy at 1) the corporate level, 2) the business level, or 3) the functional level.

These are three legitimate levels of the organization where strategic management is

needed, but it’s better to engage in systems thinking in a way that helps us to see more

of the levels of systems within systems so we can strategically manage or at least

influence each of these in some appropriate and possible manner.

Indeed, enormous benefits are gained by developing the mental lenses we need to see

all reality as a system of systems so we can begin to think more strategically and

effectively about the continuous, dynamic, and interdependent interactions between

the parts and the wholes of these systems (Boulton, et al., 2015; Senge, 2006; Capra &

Luisi, 2016).

We need to cultivate an increasing awareness of these levels of systemic systems:

• individual life and work • team • unit • department • function • business • corporate • market • industry • national economy and society • global economy and society

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Autopoietic Processes All living systems are autopoietic systems. Autopoiesis means self-reproducing, self-

reinventing, self-evolving (from Greek αὐτo- (auto-) 'self', and ποίησις (poiesis)

'creation, production') from the inside-out as the living system interacts with its

environment, i.e., the systems external to it (Marturana & Varela, 1980; 1992).

When they are functioning successfully, living systems as autopoietic systems are

proactive and inwardly responsible for their journey and to some extent their destiny.

They are self-referential, i.e., the system’s actions affect the system, which learns from

its experiences through feedback from the systems external to it (environment).

Living, autopoietic systems respond proactively to stimuli from external systems

(environment) and learn how to adapt successfully to survive and perhaps even thrive.

In other words, the living autopoietic system learns from feedback to its actions in a

reinforcing feedback process that enables it to continuously adapt and progress on its

journey of life. The living autopoietic system “is a learning system that renews itself”

or reinvents itself (Maula, 2009).

The autopoietic process for human beings proceeds in a certain logical order that

begins with the individual or organization’s paradigms (Kuhn, 2012), presuppositions

(Gadamer, 1975), mental models (Senge, 2006; Duhaime, et al., 2012), mental maps

(Covey, 2020; Normann, 2001) or mental lenses (McHann, 2023), i.e., the dynamic,

evolving construction through which the system sees reality.

Who we are determines how we see reality, i.e., our mental models or lenses are

reflective of our being. As Anaïs Nin observed, “We do not see the world as it is. We

see the world as we are.”

Our seeing logically leads to our thinking, which affects our feelings, which influences

our decisions, which lead to our words, which influence our actions, which evolve into

our patterns and habits, which mold our character, which permeates our being, which

facilitates our seeing … and the cycle, the loop, the reinforcing feedback process spirals

forward creating our emerging future.

In ancient times, Heraclitus described the nature of reality as dynamic, always

becoming, exhibiting patterns, and yet ever evolving through time like a river flowing

through the countryside to the sea. Modern science and several contemporary

philosophies seem to be converging upon a similar view (Pannenberg, 1973;

Whitehead, 1925; 1929).

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Strategic thinking, leading, and managing aim to guide our individual and

organizational seeing, thinking, feeling, deciding, speaking, doing, learning-from-

doing, becoming … and our seeing anew as we steadily reinvent ourselves and

progress toward our desired future.

Strategy: Individual and Organizational Peter Senge, a professor at M.I.T.’s Sloan School of Business, does not teach strategy

or strategic management. He teaches systems theory, systems thinking, individual and

organizational learning, and how individuals and organizations develop “adaptive

capabilities.” However, his seminal book, The Fifth Discipline, has had a big impact

upon the strategic thinking of many. The Journal of Business Strategy named him a

“Strategist of the Century” because of its deep and world-wide influence.

The book describes the five disciplines of the learning individual and learning

organization. The first discipline is “personal mastery,” which consists of creating a

vision for one’s individual future, committing to it, and allowing it to draw one’s

present up into the future. The second discipline is “mental models,” which consists of

surfacing, testing, and improving how we see reality, individually and organizationally.

The third discipline is “shared vision,” which consists of individuals in an organization

combining their personal visions into a powerful collective shared vision that pulls the

present into the future. The fourth discipline is “team learning,” which consists of

individuals working together to learn from their experiences what they cannot as easily

learn on their own. The fifth discipline is “systems thinking,” which consists of

individuals and organizations seeing reality as a system of systems, thinking about how

the parts are interdependent with one another and the whole, and taking strategic,

leveraged actions within these systems that are more effective because they are

illumined by a deep, working knowledge of the systems’ structure and dynamics.

One practical implication of this approach is that it helps us realize that strategic

thinking, leading, and managing is a process that should occur continuously at every

systemic level.

While we can study about the strategic management of organizations, a systems

thinking perspective helps us see that we can and should translate the strategic

management process—with necessary changes being made in its details when

appropriate—to our individual life as well as to the organization where we work.

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Think of a coin. It has two sides, but it is one coin. The process of strategic thinking,

leading, and managing is one process, but one side of it is applicable to our individual

experience, and the other side is applicable to larger systems of which we are a part.

As we gain deeper understandings of the strategic thinking, leading, managing process,

and as we develop through practice the skill to translate this process appropriately to

each different systemic level, we will discover increasing success at each of these

levels.

Individuals can learn to strategically think, lead, and manage their journey into a

brighter future, and so can teams, units, departments, functions, businesses,

corporations, industry associations, armed forces and national governments, and

international bodies.

A Journey through Time Strategic thinking, leading, and managing are not static activities. They are dynamic

activities that happen in time and space, which are always changing. As Heraclitus says,

“No man ever steps in the same river twice.”

Every system, every individual and organization, is on a journey through time and

space. This is our reality—however operatively conscious we are of it or not. We

benefit by raising our consciousness to this reality and embracing the “road trip” we

are on, especially since the velocity of change in our world is dramatically increasing!

Just as we can choose to go on a specific road trip to a desired destination, we can

proactively choose (Covey, 2020) to think, lead, and manage our journey. We can

“begin with the end in mind,” i.e., where we want our individual or organizational

journey to take us. Not everything is under our control. We do not control the systems

outside of us, and they can affect our success in reaching our destination, but we do

control the choices we make inside our system. Making good strategic choices and

taking good strategic actions can take us a long way!

On our journey, we must continuously cultivate an interactive mindfulness of three

time-space horizons: the past, the present, and the future. Imagine driving your car on

a road trip to a desired destination. As you drive, you must constantly maintain an

awareness of where you’ve been (the past) by glancing in your review mirror, where

you are (the present) by glancing at your side mirrors, and where you want to go (the

future) by looking through the front windshield and aiming high down the highway.

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If you are driving along a gently winding country road at 60 mph, which time-space

horizon should be your focus? What should be the priority or order of your attention?

It should be: 1) the future (front windshield), 2) the present (side mirrors), 3) the past

(rearview mirror)?

The same is true for the strategic management of our journey through time from the

past, through the present, to the future we envision. Strategic thinking, leading, and

managing focuses upon the future.

Unfortunately, research shows that for most individuals and organizations the

influence of these time-space horizons on their journey is the opposite, viz., their

journey is influenced most by their past, secondly by their present, and thirdly by their

ideas about the future.

It’s important to develop our habits of seeing, thinking, feeling, deciding, speaking, and

doing so that our focus is upon our future, so we mindfully take actions in the present,

and so we glean lessons from the past for the present and future, even while we let

the past go so that it recedes in the rearview mirror of our minds.

We are on this journey either passively like a leaf carried along by the current of a

stream or actively like a car that we drive toward a desired destination. The practice of

strategic management is like the car that carries us on our journey from one milepost

(long-term goal) to the next toward our destination, and learning-by-doing is like the

engine that powers the car of strategic management. We will describe these realities

in our next session.

Case Write-Up Reflect on the organization you are tentatively targeting for your strategic living case

study, make some notes, and then summarize your thoughts in a 1-page draft.

What do you think the organization’s purpose as a system might be? What is its reason

for being? It may not be stated anywhere, so you need to think about it.

Try to identify and map some of the systems within it and around it, i.e., where does

this system fit within the larger ecosystem of systems.

What observations can you make about your tentative target system in comparison

and in contrast to the other systems below it and above it?

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Save this 1-page draft into the Strategic Living Case Study Template under the

appropriate heading. You will revise it from time to time as you continue your study,

encounter additional information on this session’s topic, and gain richer

understandings of the information you collected in this session. At the end of your

study, you will do a final revision.

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NATURE OF STRATEGIC MANAGEMENT The Engine of Learning-by-Doing, Types of Strategy, Seeing the Elephant from Different Angles, Identifying Your Target System, Setting Up Help for Your Study

his week you gain a better understanding of why learning-by-doing is the power

that drives the strategic management process at all systemic levels. You will

review the types of strategies that can be employed to move forward toward

goals, you will reflect briefly upon some of the major schools of strategic thought with

their strengths and weaknesses, and you should glean from these insights the most

appropriate and efficacious approach to take in the study of your target system. You

will also settle upon your target system (organization) for your strategic living case

study and sharpen your insights into the systems within it and outside it.

Learning-By-Doing Method If the practice of strategic management is like driving a car to a chosen, desired

destination, then the practice of learning-by-doing is like the engine that powers the

car that takes us on our journey.

Learning-by-doing is something we have been experiencing since we were toddlers. It

comes naturally to us because it arises from our nature as an autopoietic living system,

but learning-by-doing is also something we can study, understand better, practice

methodically, and develop dramatically increased skills in doing. The deeper our

understanding, the more purposeful and carefully methodical our practice, the greater

our skill, the more power we will have to strategically lead and manage our journey.

Session

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Amy Edmondson of Harvard Business School argues that the bleeding edge of

competition today is who can learn better and faster than their competition

(Edmondson, 2008), but she is not referring to just any kind of learning. David Garvin

of Harvard Business School conducted a review of social science research over several

decades on how humans learn and concluded that there are three stages of learning:

1) acquiring information, 2) interpreting information, and 3) applying information.

Garvin goes on to argue that real learning has not really taken place until we have

progressed through all three stages, i.e., until we have applied the information we

acquired and interpreted (Garvin, 2000). The repeated, dialogic, dialectic, iterative

cycling through these three stages of learning creates an increasingly deep, complex,

and useful knowledge. This is what we mean by the learning-by-doing method.

Also, learning-by-doing overcomes the infamous “knowing-doing gap” that plagues

individuals and organizations at all systemic levels. Pfeffer and Sutton of Stanford

Business School conducted a multi-year research project to find out what was the

greatest problem facing businesses today, and they concluded that businesses

generally “know” what to do but that they cannot effectively “do” what they know.

They have a knowing-doing gap, which is one explanation for why most strategic plans

fail or fall short of expectations. However, as Pfeffer and Sutton note, “If you learn by

doing, there is no gap between learning and doing!” (Pfeffer & Sutton, 2000).

Acquiring Information. For most of human history, data and information was relatively

hard to come by. Most people lived in rural areas, villages and towns were small, travel

was difficult and dangerous. Books were rare, few people could read. Radio, television,

movies, the Internet, news services, etc., did not exist. Education tended to be about

acquiring information and trying to store it in our memory for possible future use.

The modern world bombards us with data and information from a multitude of

sources. Information pours down upon us like someone standing at the base of

Niagara Falls. Vast databases store and retrieve information for us as needed. So,

“acquiring information” today is not about volume, which may merely be “noise,” but

it is about gathering quality information as we need it for our life and work purposes.

One of the learning-by-doing skills we need to develop, which we will work on in this

study, is the research skill of discovering and using the best resources to provide

information that is not just “noise” (irrelevant, distracting info) but information that

contains the “signals” (potentially meaningful info) that we need to strategically

manage our journey.

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Interpreting Information. As we acquire or gather the information we need, we must

relate it to our experience, i.e., we must create the meaning and significance this

information has for us. There are four steps to this interpretation stage:

1) We describe how this information integrates with what we already know, i.e.,

how we fit these new “puzzle pieces” into the growing “jigsaw puzzle picture”

that constitutes our understanding of reality.

2) We explain how this information connects with our unique situation at this

time and place, i.e., how this information is relevant to us.

3) We reflect upon how it is meaningful to us, i.e., how it can make a significant

difference in our lives and work if used.

4) We identify how this information could be useful to us, i.e., how we could put

the information into practice in various ways.

Applying Information. The application of information goes beyond identifying how it

could be useful to us. Application is about action in real-time, real-world experience in

the time-space horizon of the present! We can choose to take actions relating to how

we see, think, feel, decide, speak, do, learn, become, and see anew.

We can even create plans of action comprised of S.M.A.R.T. action steps, and then we

can follow that plan of action and do each of these action steps, i.e., implement or

execute them. And whenever we act, we create ripple effects in the systems around

us, and these systems always respond with feedback of some type or another. This is

simply the way the universe works (Andrews, 2010; Boulton, et al., 2015; Capra & Luisi,

2016). We can then study this feedback and learn from it, i.e., we can learn from our

doing and adjust the next time we act on the information we have acquired and

interpreted.

This process is iterative, i.e., it is a process that involves repeating a sequence of steps

multiple times, with the goal of improving the outcome with each repetition. In other

words, it is a process that involves making incremental changes or improvements over

time, based on feedback or results from previous iterations.

This process of application is theoretically sound (Moen & Norman, 2010), and it has

been proven over decades to power the success of individuals, multinational

corporations, and whole nations (Scholtes, 1998, 1-34). It is the PDSA Cycle that was a

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cornerstone of what Edward Deming taught the Japanese after WWII that catalyzed

the quality movement of continuous learning and improvement that has since

transformed global business competition. Deming learned PDSA (Plan, Do, Study, Act)

from Walter Shewart, a physicist, engineer, and statistician, who was a disciple of C.I.

Lewis, a cognitive pragmatist philosopher at Harvard University. Understood deeply,

PDSA is a practical, everyday, workplace use of the scientific method (Hunter &

Bradbury, 2013; Lewis, C.I., 1991).

The PDSA cycle in the application stage of learning creates a positive reinforcing

feedback process of learning, growth, and becoming that helps power the strategic

management process toward a desirable future. The PDSA cycle fits well with the

dynamic nature of reality as a system of systems, and it helps autopoietic living systems

adapt well to the constantly changing nature of their environments, i.e., the systems

external to them.

The PDSA cycle also fits well into the emerging nature of strategy in real-time, real-

world experience given the increasing velocity of change in reality as a system of

systems where any change however large or small in one part affects other all the

other parts and the whole.

The apply stage of learning, especially when implemented methodically through a

skillful employment of the PDSA cycle, closes the loop on the acquire-interpret-apply

cycle and powers the next iteration of that cycle in a never-ending reinforcing feedback

process of learning, growth, becoming, and strategic management progress toward

the system’s guiding stars (including but not limited to statements of the system’s

desired future, e.g., purpose, values, vision, mission, long-term goals).

In this way, the acquire-interpret-apply cycle, i.e., learning-by-doing, functions as the

engine in the car of strategic management that carries us on our journey toward our

desired future destination.

The 5P’s or 5 Types of Strategy Strategy is often viewed as a plan of action to achieve one or more long-term goals. If

we plan to implement a certain strategy, our doing of the strategy creates results. We

can study these results and adjust our strategy, or choose a different strategy,

depending upon how our strategy is working, and then we can act again. But the

nature of strategy is a little more complex.

S T R A T E G I C L I V I N G C A S E S T U D Y

One of our favorite thought leaders on strategic management, Henry Mintzberg,

argues that a strategy may be a plan, a ploy, a pattern, a position, and a perspective

(Mintzberg, 1992).

Plan. Strategy as a plan refers to a consciously, purposefully intended action, ahead of

the action, to achieve a goal.

Ploy. Strategy as a ploy refers to a specific maneuver to achieve an advantage over a

competitor.

Pattern. Strategy as a pattern refers to some consistency of behaviors or habits in a

stream of actions. We can plan or intend or deliberately decide upon a strategy, and it

can become realized or remain unrealized. We can deliberately work to develop a

habit or pattern in a stream of actions too, and we can realize this intention or not. For

example, we can deliberately use the learning-by-doing method to develop these

habits or patterns, and we can intend that this process will cause an effective strategy

to emerge iteratively through time. We can also go about our life or work in ways that

result in the development of habits or patterns that are not intended or deliberate.

Nevertheless, these unintended habits or patterns become an emergent strategy or

realized strategy, which may yield good or bad results.

Position. Strategy as position refers to purposefully locating a system (organization)

within its context of larger systems (environment) in a manner that favorably matches

and mediates the interactions between the internal system and the external systems.

Perspective. Strategy as perspective refers to intentionally developed or evolved ways

of seeing, thinking, and feeling about the world, i.e., of understanding the world. In

Peter Senge’s terminology, it is the collective “mental models” and “shared vision” of

a system (organization). The discipline of working on mental models focuses upon how

we see the world presently, and the discipline of shared vision focuses upon how wish

to see the world in the future.

Schools of Strategic Management: Evolution, Trajectories, and Selective Synthesis The 5P’s of strategy are not mutually exclusive. Indeed, they can be different aspects

or emphases in the complex reality of real-world strategies amid the interactions of

dynamic systems. We can also draw a distinction between strategies and the strategic

management process.

S T R A T E G I C L I V I N G C A S E S T U D Y

So, what again is strategic management? As we noted earlier in this Guide, many

definitions, descriptions, prescriptions, and broad schools of thought about strategic

management exist. They do not always contradict one another. Indeed, many times

they complement one another.

These different schools of thoughts about strategic management resemble the

different accounts of the elephant by the blind men who each touched a different part

of the elephant and developed a tentative hypothesis or description of the whole

elephant from their perspective of the part they touched.

So, to gain a richer, more accurate picture of what the whole elephant is really like, we

must compare these accounts, draw out and integrate their valuable insights, and try

to come up with our “latest, greatest picture of the elephant.”

In his book, Strategy Safari, Mintzberg (2009) outlines ten different broad schools of

thought on strategic management, each of which has some sub-schools that we may

identify later in our Guide for special reasons. None of these schools of thought are

wholly adequate, each needs some critique and revision, and each has insights to offer

toward an emerging, yet-to-be-concluded synthesis:

1. The Design School: This school views strategy formation as a process of conception.

The focus is on creating a unique and innovative strategy that will set the

organization apart from its competitors.

2. The Planning School: This school views strategy formation as a formal process of

planning. The focus is on analyzing the environment, setting objectives, and

developing detailed plans to achieve those objectives.

3. The Positioning School: This school views strategy formation as an analytical

process of positioning the organization in relation to its environment. The focus is

on identifying the key success factors in the industry and positioning the

organization to take advantage of them.

4. The Entrepreneurial School: This school views strategy formation as a visionary

process driven by the entrepreneur or founder of the organization. The focus is on

creating a vision for the future and pursuing it with passion and determination.

S T R A T E G I C L I V I N G C A S E S T U D Y

5. The Cognitive School: This school views strategy formation as a mental process of

sense-making. The focus is on understanding the organization’s environment and

developing a shared mental model of how it works.

6. The Learning School: This school views strategy formation as an emergent process

of learning. The focus is on experimentation, adaptation, and continuous

improvement.

7. The Power School: This school views strategy formation as a process of negotiation

and bargaining among stakeholders. The focus is on understanding the power

dynamics within the organization and using them to achieve strategic goals.

8. The Cultural School: This school views strategy formation as a collective process of

culture creation. The focus is on developing a shared set of values, beliefs, and

assumptions that guide decision-making.

9. The Environmental School: This school views strategy formation as a reactive

process driven by external forces in the environment. The focus is on adapting to

changes in the environment to survive and thrive.

10. The Configuration School: This school views strategy formation as a process of

designing the organization’s structure and systems to fit its environment. The

focus is on creating an integrated system that aligns all aspects of the organization

with its strategic goals.

Our working definition or description of strategic management is this course is this:

“Strategic management is a pattern in a stream of proactive seeing, thinking, feeling;

that leads to a pattern in a stream of future-changing decisions; that leads to a pattern

in a stream of hopeful speaking; that leads to a pattern in a stream of leveraged

actions; from the results of which we learn new insights that enrich how we see, think,

and feel going forward toward our Guiding Stars.”

Identifying Your Target System (Organization) In Session 1 we described the contemporary view of reality as a system of systems,

and we noted that there are levels of systems ranging, for example, from the individual

to the team, unit, department, function, business, corporate, market, industry,

national economy and society, and global economy and society. The journeys of each

of these systemic levels can and should be strategically managed.

S T R A T E G I C L I V I N G C A S E S T U D Y

So, what is the specific system you will target for your strategic living case study? Your

target system is a whole with a purpose that is comprised of interdependent parts. Each

of these parts is usually a system too. Further, your target system is always a part of

larger systems. You will need to understand all these relationships at least in some

general ways, and sometimes in specific, insightful ways. Also, you will need to proceed

with your strategy study in a manner that is appropriate to your target system.

This Strategic Living Case Study Guide is a flexible, broad approach that generally

targets a public corporation, which may be easier to study because of the large amount

of publicly available information that is relatively easy to find. However, you will need

to make minor adjustments and adaptations of this broad approach at various stages

and steps if you are studying a private company, a partnership, a not-for-profit

organization, a government agency, etc.

Moreover, if your target organization is a system within a larger system, you will need

to make minor adjustments and adaptations that fit your target system. At some

junctures of your study, you may focus solely on your target system, but at other

junctures of your study, you may need to bring other interdependent systems or larger

systems into view within your study.

For example, if your target organization is Lutheran Hospital in Fort Wayne, Indiana,

you may find that in your internal study, which identifies strengths and weaknesses of

the system, you will need to bring Lutheran Physicians Group into view in your study

as well the other eight hospitals and 100 other health access points within Lutheran

Health Network, which is the larger system encompassing them all. If you are studying

Lutheran Hospital, a system within Lutheran Health Network, you will at some

junctures need to bring information and insights into view regarding Community

Health Systems, Inc., a publicly traded company headquartered in Franklin, Tennessee

that operates over 100 hospitals and other healthcare facilities across the United

States.

The logical flow and major stages of the strategic management process is the same

whether you are seeking to strategically lead and manage your own individual journey

through time and space or the journey of a large and complex organization, but the

specific steps and details may need to vary depending upon the nature of your target

organization and the practical exigencies of its unique system context.

S T R A T E G I C L I V I N G C A S E S T U D Y

Setting Up Your Study If you are taking the undergraduate version of this course, you will likely be assigned

to an Indiana public company or a public company where you would like to work after

graduating. This will make your study easier. You will do your study in a study group

that will collaborate on acquiring and interpreting the data and information you need

for your independent study.

If you are taking the graduate version of this course, you will be expected to do your

strategy case study on the organization where you work or an organization where you

would like to work. You can choose to do your study on your own, but we strongly

encourage students to get some upper management sponsorship of your study, i.e.,

recruit a higher-up manager or two to champion your study and to help you recruit a

cross-functional team of coworkers who will work on this study with you. They can

help you with every aspect of this study—acquiring and interpreting information,

reviewing and discussing drafts of sections, arriving at Findings and Recommendations,

preparing and making a presentation to a small group of upper managers, and

dialoging with these executives about your conclusions.

Quite a few students who have followed this strong suggestion have found this study

to be a richer learning experience than they ever anticipated, and we have numerous

stories of students whose study gained them special attention in their organization

and who received major promotions and pay raises soon after they completed this

study.

Obtaining Upper Management Sponsorship for a Strategic Management Study

One student decided to follow our strong suggestion and asked for our help to

construct an email they could send to an executive in their organization to help them

recruit a cross-functional team to work with them on their case study.

Below is an edited version of the email we helped them construct. This student had an

amazing experience working with the cross-functional team the executive helped

them recruit. The work of the team on the study prompted numerous conversations

with VPs and eventually the CEO of the company. After the course was over, the

student got a major promotion and pay raise in the company because of this team

study process! If this letter could be usefully adapted by you for your use, please feel

free to do so.

Hello ________________,

S T R A T E G I C L I V I N G C A S E S T U D Y

My name is _______________________________, and I am an MBA student

at Purdue University in Fort Wayne, Indiana.

I am about to finish my MBA degree, and I am currently in a strategic

management course where I need to do a strategic case study on an

organization where I work or where I would like to work one day.

The goal of the study is to review the strategic management process of the

organization—viz., its ongoing process of strategy formulation,

implementation, and evaluation—to understand how the organization

strategically manages its journey through time toward its vision of what it

wants to be and achieve in the future. At the end of the study, I must arrive at

some findings and recommendations that might include some ideas for

improvement in the organization’s strategic management process. However,

the focus of the study is not one of critique but is one of empathic and

constructive understanding.

Ideally, the professor would like for us to do our study as part of a cross-

functional team of people from the organization who would participate with

me in the study for an hour or so each week for ten weeks. These strategy team

members would help me identify and acquire important data/information and

serve as a sounding board for the adequacy and relevance of the

data/information gathered, the efficacy of my interpretations of this

data/information, and for reflections on strategic directions for the

organization.

At the end of the study, I would provide a copy of the study to leaders and

managers at the organization, much like a paid strategy consultant would

provide a deliverable, although my efforts would of course be without any cost

to you. Also, I would like to make a presentation to one or more leaders and

managers in the organization and get their thoughts and feedback on the study

at the end of the semester.

Would you be willing to discuss this opportunity with me? If you would be open

to having a brief Zoom chat with me, and perhaps my professor, so that we

could talk further about this project and answer any questions you might have,

I would be grateful.

Looking forward to hearing back from you soon.

S T R A T E G I C L I V I N G C A S E S T U D Y

Sincerely,

Name of Student

Recruiting a Cross-Functional Team to Engage in the Study

If you can recruit a cross-functional team of coworkers to engage in this study with

you, perhaps with the sponsorship of an upper manager or executive at your

organization, then you will want to “quarterback” this team.

In many respects, you become the internal consultant, functioning much like an

external consultant would function who was hired to lead the organization in a review

of the strategic management process at the organization. You will want to follow the

structure of this Strategic Living Case Study Guide for your team’s work.

Different members of the team can make their special contributions to the study each

week, and you would be wise to meet at least once a week to gather, collate, discuss,

and interpret the information you are acquiring during the study. Also, your team can

help you make a presentation to the sponsoring managers at the end of your study.

If you are no longer a student using this Guide to help you do a semester-long strategy

case study, but you are working for an organization, and you want to use this Guide to

strategically manage the group or function under your responsibility, you can gather a

cross-functional team of coworkers and lead them through this process over a quarter

or two each year. This will dramatically improve your performance and the impact of

your contributions in your area of responsibility!

If you are working for an organization that wishes to continually improve its strategic

management of its journey, and the organization wants you to be involved, then you

can offer to lead the same process presented in this Guide each year. One approach is

to gain upper management sponsorship and gather a cross-functional team each year,

perhaps during the 3rd quarter of the current year. During the 3rd quarter you can work

through this Guide, arrive at Findings and Recommendations, gain upper management

approvals for recommendations accepted, and then revise and update your rolling 3-

year or 5-year plan prior to the 4th quarter. The 4th quarter can be used to restructure

the organization as needed to implement the updated strategy, to engage in capital

budgeting for the next fiscal year, and so on, so you will be read by the 1st quarter of

the next year to begin implementation of the revised plans or strategies.

S T R A T E G I C L I V I N G C A S E S T U D Y

Case Write-Up Review and finalize the tentative work you did in Session 1 to identify your target

system (organization) to study.

Reflect further on the organization you are targeting for your strategic living case

study, make some more notes to sharpen your focus and delineate important details

about your target system, especially on what you tentatively think their current

strategies are and what their strategic management process is like, and then revise

your thoughts on the 1-2-page draft you did for Session 1.

S T R A T E G I C L I V I N G C A S E S T U D Y

HISTORICAL CONTEXT Historical Development, Present Context, and Potential Trajectories into the Future.

his week you will work to collect basic data and sources of information that you

will use throughout your study, and you will focus upon understanding

something about the historical development of your organization.

Research and Analysis Follow the steps below to begin to build a database of information about your

organization. Use library databases and other reputable sources to build your

database. This initial research will help you to become familiar with your organization.

As you collect this information, look in particular for anything to help you gain a sense

of the historical development of the organization, its industry, its current context, and

some important trends.

As you collect this information, look in particular for anything to help you gain a sense

of the enduring meanings for the future rooted in the historical development of the

organization, in the evolution of its industry, in view of its current market context, and

in light of important trends creating the future.

This historical background information is important, as it will be the only content

from this session you will transfer directly to the corresponding section of your final

paper. The other information you gather is simply to help you build a platform of

resources and a base of understanding on which you can draw in the upcoming

sessions.

Be certain to provide a reference in APA format for each source you add to your

group database.

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Step 1: Go to the website of the organization and review everything you can find that

may be relevant to your strategic case study.

Review its “guiding stars,” i.e., statements about its purpose, values, vision, mission,

long-term goals, etc. What is good about these statements? What may be lacking?

How aligned are the operations and programs of the organization with these

statements? (Do this briefly, you will go into more detail in a later session.)

What are its primary products and services? If it is a public corporation, be sure to

review the pages dedicated to investors (often called Investor Relations). Go to the

About Us section of the website, or its equivalent, and the History page, or its

equivalent. Focus in detail upon the past of the organization.

Take careful notes of what the organization says about itself. Remember that the

website is a marketing tool. It contains factual information but also conveys both how

the organization perceives itself and how it wishes the public to perceive it. You will

want to compare and contrast this presentation of the organization to the information

you obtain from other sources.

Write a summary of your findings about the history of the organization based on

your findings. Include links to the best source information. Include a reference, in APA

format, for each of the sources.

Step 2: Obtain a copy of your organization’s most recent annual report and 10K filing

with the Security and Exchange Commission (SEC), or, if the organization is not a public

corporation, the closest equivalent to these reports. These may be found at the web

site of the organization or in databases such as FIS Mergent and EDGAR. Review the

reports in their entirety in order to get an overview of the organization.

Take careful notes of what the organization says about itself. Remember that the

annual report is also a marketing tool. Like the website, it does contain factual

information. At the same time, it conveys both how the organization perceives itself

and how it wishes the public to perceive it. You will want to compare and contrast this

presentation of the organization to the information you obtain from other sources.

Enrich your summary of findings about the history of the organization. Include links

to the best source information. Include a reference, in APA format, for each of the

sources.

L I V I N G C A S E S T U D Y

Step 3: Find and review one or more reports on the industry of which your

organization is a part. These may be found in databases such as FIS Mergent, Standard

and Poor’s NetAdvantage, and FirstResearch. The web sites and publications of

industry trade associations may also be useful. (You can typically find links to these in

the appendices of the industry reports.) Get an overview of the industry from these

documents, again, with a focus on its history.

Write a summary of your findings about the history of the industry, and the role of

your organization in it. If possible, attach a copy of each of the reports you used, or

provide links to them. Include a reference, in APA format, for each of the sources.

Step 4: Find and review the financial statements of the organization, using its past

Annual Reports and information found in Factiva and FIS Mergent. Compare multiple

years of financial statements. Focus upon the financial history of your organization.

(You will do a more in-depth study of the financial management and current financial

condition of your organization later in the internal environment study of this strategic

management process.)

If the organization is a public corporation, locate one or more stock reports and

investment analyses in S&P NetAdvantage, Value Line, Morningstar, or another highly

reputable, industry-recognized source. Take notes on what you learn about the history

of the organization from these sources.

Write a summary of your findings. If possible, attach a copy of the reports you used.

Include references for all sources.

Step 5: Search for some news articles about the organization and its industry in EBSCO

Business Source Elite, Factiva, ABI Inform Complete, ProQuest, and Lexis Nexis

Academic. Use the name of the organization name and key words such as “history,”

“industry,” and “trends” to find helpful articles.

Step 6: Understanding, managing, and sometimes overcoming “path dependencies”

is an important concept in strategic management. Path dependencies refer to the

influence of historical decisions, actions, and events upon the present situation and

upon future possibilities, decisions, and outcomes.

Path dependences recognize that “history matters.” Habits, patterns, and reinforcing

feedback processes cause predictable amplifications of small differences over time,

and these can constrain or program present and future decisions and actions. Think of

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the effects of ruts in rural, wet, unpaved roads. If the path dependencies are positive,

that may be good. If they are negative, then they are clearly constraining, unless they

are observed and conscious, purposeful efforts are made to innovate and create new

paths.

What path dependencies can you identify in the organization in the way it navigates

by its guiding stars, in its number of products or services, its prices, its learning

processes, its product delivery modalities, its market development approach, its

business model, its financial model, its governance and management approach, etc.?

Where are these path dependencies helpful? Where are these path dependencies

harmful, and therefore where to opportunities for improvement exist? Take notes.

Step 7: Look back over all the notes you took in steps 1-6. Pause. Think. Reflect. Just as

individual life journeys have meaning, so do the journeys of organizations. Beyond the

details, the noise, the operational “how to’s,” the exigencies, the ups and downs

through the years, what stands out to you from your reflections upon the past of this

organization that should be enduringly meaningful for the future? What are its

“timeless traits”? Put another way, fifty years from now, what should be true then

about the organization that has been true throughout its history? Take notes. What

lessons should the organization learn from its past that will guide changes as it seeks

to reinvent itself for the future? Take notes.

Write a summary of your findings, with special attention to historical elements. If

possible, attach a copy of the articles you located, or links to them. Include an APA

format reference for each source.

Case Write-Up Sift through the data and information you obtained from this research and analysis,

interpret what is significant from what is not, i.e., what are “signals” and what is merely

“noise,” organize the information, and write a 2-3 page draft describing the historical

development of the organization and its industry. Try to capture a sense of the

trajectories of the organization from the past to the present and a sense of the

momentum of these trajectories towards the future.

Save this 2-3 page draft into the Living Case Study Template under the appropriate

heading. You will revise it from time to time as you continue your study, encounter

additional information on this session’s topic, and gain richer understandings of the

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information you collected in this session. At the end of your study, you will do a final

revision.

L I V I N G C A S E S T U D Y

GUIDING STARS Purpose, Values, Vision, Mission, Long-Term Goals.

aving understood something of the historical development of the organization

you are studying, focusing especially upon identifying and understanding the

implications of its path dependencies and timeless traits, we will seek next to

understand and evaluate the “guiding stars” by which the organization navigates the

present on its journey into new futures. The guiding stars of an organization say: “This

is who we are, this is what we do, and this is where we are headed” (Scholtes, 1998, p.

173). Like navigators of old, these “stars” help the organization identify where it is

today and set a course toward where it hopes to go.

Guiding stars come in a variety of types and forms. Different organizations create or

identify different statements of their guiding stars. Some have a few. Some have many.

Most have at least a “mission” statement. Many organizations identify a “vision” and

a “mission” and their “values,” though they sometimes define or construct these in

different ways.

There is the occasional organization that appears to have no guiding stars whatsoever,

either because their guiding stars are implicit or tacit in the understanding of founders

and managers, or because they choose not to reveal them for competitive reasons, or

simply because of poor leadership and management, they have not consciously

formulated and expressed any solid and coherent guiding stars. But the guiding stars

are there in some way or another, even if only implicitly as a pattern in the behaviors

of the organization. You may need to infer the mission, vision, and values of the

organization from their statements and pattern of behaviors. The more you read of

the literature produced by the organization, the more common themes will emerge,

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L I V I N G C A S E S T U D Y

showing how the organization defines itself, what it is striving toward in the future,

and what it values.

In other words, guiding stars always exist, either consciously or unconsciously, either

explicitly or implicitly, either well-defined or poorly articulated, and whether

consciously followed and operationalized or ignored in daily, weekly, monthly, yearly

operations. Also, note that the guiding stars espoused and the guiding stars in action

are often two different things! Whether formally expressed and effectively

operationalized or not, the actions of an organization over time reveal the real guiding

stars of any organization. (The same things are true for an individual.)

Well-led and well-managed organizations, of course, have explicit, well-defined

guiding stars, and they consciously and relentlessly use these to navigate their journey

into the future, i.e., they strive quite intentionally to operationalize their guiding stars.

In other words, they truly work in accordance with and toward their guiding stars,

which truly and practically guides all their efforts. (The same things are true for an

individual.)

Research and Analysis Follow the steps below, to reflect upon the stated and unstated guiding stars of your

organization. Strive to understand what they have been, and what they are now. Along

the way, keep thinking of about how well the organization uses its guiding stars to

guide all its activities and work. Think too of what the organization’s guiding stars

perhaps could or should be in the future!

Use library databases and other reputable sources to gain an understanding of the

statements that guide the work of the organization. When you refer to any

information from your source in your responses to the questions below, whether as a

direct quote or in paraphrase, be sure to also include an APA-formatted in-text citation

to the source within the sentence that uses that information and include a reference

for all citations of the source at the end of your case study.

Step 1: How does the organization define itself? In their excellent chapter on business

definition, Duhaime, Stimpert, and Chesley (2012) say: “Definition is the way a firm or

a business describes itself to employees, customers, and other constituencies while

also distinguishing it from other business organizations that may or may not be

competitors” (p. 121). This kind of definition gives an organization an identity that is

enduring. The same authors go on to say: “Business definition is strategy content in

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that…it describes which customers the firm or business will serve, what products or

services the firm or business will offer, and what technologies the firm or business will

employ. But business definition is also a strategy process—the process by which firms

and businesses select positions in their industry environments” (pp. 121-122,

emphasis added).

Step 2: What types of guiding stars does the organization have? Again, think about

the answer to this question both consciously and unconsciously, both explicitly and

implicitly. Does the organization have a consciousness of or an explicit statement of its

purpose, its values, its vision, its mission, and its long-term goals? What are these

today? Have they changed over time? If they have changed or evolved, then why have

they? What strategic direction do these changes imply?

Conduct research to see what the organization says or what people researching the

organization have said about any of their guiding stars. Are there any other broad

statements, perhaps by different names, that accomplish the same or similar strategic

intent as statements of purpose, values, vision, mission, and long-term goals? If the

organization has more than one of these statements of strategic intent, how do they

appear to relate to one another and to work together systemically? What do each of

these statements tell you about the organization? Does the organization appear to be

proactive or reactive to its industry and the external environment? (As noted in the

introduction to this session, you may have to logically infer or to “read between the

lines” to find evidence of the guiding stars! Don’t give up after a mere website search

of the terms “mission” and “vision.” You will actually need to read the materials you

gathered in Session 1, and possibly, gather and read additional sources.)

Step 3: What is the organization’s purpose? All organizations are social systems, i.e.,

they are living systems made up of individuals who are also living systems. By nature,

all living systems are autopoietic systems, i.e., they are self-reproducing, self-

reinventing systems that learn from feedback from the larger systems around them

how to adapt to constant changes in their environment, so they can survive and

perhaps even thrive. They may do this poorly or well, but their future depends upon

what they do. All living systems, by definition, have a purpose. It may clear and explicit,

or it may be unclear or even un-thought-about, but their purpose should guide how

any living system adapts to changes in the systems around it through learning from

feedback from those external systems.

The purpose of an organization is its raison d'être or reason-for-being, i.e., why it exists.

Whether an organization chooses to state publicly its purpose statement or not, it

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should make every effort to clarify to itself its reason-for-being. Indeed, clearly

articulating its purpose statement to itself may be the most important effort of all in

establishing the guiding stars for the organization because all the other guiding stars

derive from the purpose statement.

Everything begins with purpose, then values flow out of purpose; vision flows out of

purpose and values; mission flows out of purpose, values, and vision; and long-term

goals flow out of purpose, values, vision, and mission. Our strategies are how we

achieve our long-term goals one after another, working through our mission, to

progress toward our vision, in alignment with our values, and in ultimate fulfilment of

our purpose.

What is the organization’s purpose? If this has never been clearly stated, what do you

think its purpose is? Purposes of organizations are a choice. They can change when

necessary. What should be the organization’s purpose in the future, do you think?

Step 4: What are the organization’s values? Values are "the things you value," i.e., the

things that are most important to you, individually or organizationally; values comprise

the moral compass that guides us; values inform our conscience; and therefore, our

values should help guide our seeing, thinking, feeling, deciding, speaking, acting,

learning-by-doing, and becoming—and what we become, i.e., what we are determines

how we see reality. So, this is an iterative, hermeneutical process at the very core of

our nature. Most obviously and traditionally, our values drive our decisions and

actions, and these determine our direction.

Each individual and each organization has a lot of values. The rigor of thinking through

many values to our core values brings great benefit. Good things come from doing the

hard work of identifying which values are the most important to us in each of the

domains, dimensions, arenas, and roles of our experience. It is also important to sift

these, so that we help the cream to rise to the top, i.e., we prioritize a few of our most

important values.

What are the organization’s currently stated values? How would you evaluate these?

Are there any timeless and important values that are not included or may be even

more important than those articulated up until now? What do you think the values of

the organization should be going forward?

Step 5: What is the organization’s vision? Vision focuses upon the distant future. It

“begins with the end in mind” (Covey’s habit 2 of highly effective people and

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organizations). Vision follows Rule #1 of mathematically-based game theory: “Look

ahead then reason backwards.” Vision chooses who you want to be and what you want

to achieve in the future. Vision creates a tension between the future you choose, and

focus upon, and the present reality. A clear and powerful vision of the future then pulls

the reality of the present up into that future that is envisioned. Creating a magnetic

vision of the future produces a Pygmalion Effect for the organization.

A vision implies a gap between an imagined future state and the present. A good

organizational vision describes: 1) what the organization wants to become in the

future as a result of effectively executing on its mission, and 2) how in the future the

organization would like the larger, external environment to change, or to become

better, as a result of the organization effectively executing on and achieving its vision

(Normann, 2001).

What is the organization’s current vision statement? Has it changed or remained the

same through the years? How well does it accomplish the ideals of a good vision

statement as described above? What might be a good vision statement for the

organization going forward?

Step 6: What is the organization’s mission? The mission explains what business the

organization is in, what it is, and how it works, i.e., modus operandi. It clarifies how the

organization differs from other organizations, and it specifies the organization’s value-

creating domain and how it adds value (Williamson, 1981). The mission statement

should also describe what difference its existence makes to its external context, i.e., to

the world (Normann, 2001). The mission statement tells you what the organization is

and does today. And, at least implicit or logically within the mission statement, you

should also gain some sense of how executing on its mission statement will help it

close the gap between what it is and does today, and what it wants to be and do

tomorrow (Normann, 2001).

Fred David’s (2007) research suggests a good mission statement should address nine

components: its customers, its products and services, its markets (by country, region,

etc.), its technological currency, its commitment to “growth and financial soundness,”

its “beliefs, values, aspirations, and ethical priorities,” its “distinctive competences”

and “major competitive advantage,” its responsiveness to “social, community, and

environmental concerns,” and its human resources (p. 51).

Creating, clarifying, and clearly expressing an organization’s mission is difficult, and

with changing external systems or environment, mission statements need to change.

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Nevertheless, the better the thinking done on the mission statement, the better its

guidance of the ongoing operations of the organization.

What is the organization’s current mission statement? Has it changed or remained the

same through the years? How well does it accomplish the ideals of a good mission

statement as described above? What might be a good mission statement for the

organization going forward?

Step 7: What are the organization’s long-term goals? Long-term goals are the things

you must achieve as you implement your strategies, working in accordance with your

mission, to progress towards your vision, values, and purpose. Long-term goals should

be a series of “mile posts” that mark your progress towards your vision of the future,

as you achieve each goal. (Strategies are how you will progress from one “mile post”

to the next toward the end you have in mind, i.e., your vision, values, purpose.)

Like freeway mileposts, long-term goals should span the highway of our journey ahead

from our present location to our idealized future destination. At this level of iteration,

they should be general and flow out of the organization’s purpose, values, vision, and

mission. At a later level of iteration, specifically after a SWOT analysis, they can become

more specific and reflect an understanding of how the organization’s inner strengths

and weaknesses can be managed to deal with its external opportunities and threats.

What are the organization’s long-term goals? Have they changed or remained the

same through the years? How well do the organization’s long-term goals accomplish

the ideals of good long-term goals as described above? Pending insights gained from

a thorough SWOT analysis, which will in occur in subsequent steps of our study, what

might be good long-term goals for the organization going forward?

Step 8: Having “guiding stars,” and truly navigating by them, are two very different

things. This may be one of the most insightful and fruitful steps of your study!

Seek out sources and information that provides evidence of the organization’s

behaviors, habits, and track record in navigating by its guiding stars.

Does the organization have a track record of taking its guiding stars seriously and

consciously, intentionally, methodically, and relentlessly leading and managing toward

them? Put another way, does the organization purposefully use its guiding stars to

guide its daily, weekly, monthly, quarterly, yearly activities? Does the organization

conscientiously operationalize its guiding stars?

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Step 9: Peter Senge (2006) says: “A shared vision is not an idea… It is, rather, a force

in people’s hearts, a force of impressive power… Few, if any, forces in human affairs

are as powerful as shared vision...one of the reasons people seek to build shared

visions is their desire to be connected in an important undertaking... A shared

vision…uplifts people’s aspirations” (pp. 192-193).

Guiding stars that are outwardly understood and inwardly embraced and shared by all

the employees and stakeholders of an organization make the gaps visible between the

present and the desired future. These gaps create constructive tensions, which cause

these guiding stars to become powerful “attractors” and “self-fulfilling prophecies”

that create purposeful, collective action to bring the abstract, desired future into

concrete, manifested present reality (Normann, 2001). Good guiding stars set in

motion Pygmalion effects create the realities envisioned.

How might the organization clarify, make more explicit, and render even more

powerful its guiding stars among all the stakeholders of the extended community so

that they can serve as powerful “attractors,” motivating stakeholders to work and

strive toward these guiding stars, even when not commanded, directed, requested, or

supervised?

Step 10: Reflecting on your studies above, is there coherence or are there

inconsistencies or contradictions among the current purpose, values, vision, mission,

and long-term goals—whether they are implicit or explicitly stated? What changes

might you suggest the organization make in its guiding stars so that they are all

coherent and work synergistically as a logical system?

Case Write-Up Sift through the information obtained through your research, interpret what is

significant from what is not, organize the information, and write your own 2-3 page

draft that 1) answers all the questions posed above, 2) describes the explicit or implicit

guiding stars of the organization, 3) evaluates how effectively and powerfully these

guide the organization, and 4) recommends any improvements the organization might

make to any of these guiding stars.

Save this 2-3 page draft into the Strategic Living Case Study Template under the

appropriate heading. You should anticipate and indeed plan on revising your previous

work from time to time as you continue your study and as your rough draft grows. This

will occur as you encounter additional information on this session’s topic, and gain

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richer understandings of the information you collected in this session. At the end of

your study, you will do a final revision of this material and integrate it seamlessly into

your final Strategic Living Case Study on this organization.

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INTERNAL ENVIRONMENT I Business Model, Marketing Mix, Tangible Assets.

aving understood something of the history (present) and “guiding stars”

(future) of the target system or organization you are studying, you will turn

your attention next to understand better the organization’s present context

and experience, its successes and failures, and especially its strengths, weaknesses,

opportunities, and threats.

You will do a study of the internal environment (system) of the organization to

understand and evaluate its strengths and weaknesses, and you will do a study of its

external environment (systems) to understand and evaluate its opportunities and

threats. These two studies provide the essential data and information you will need

later to do a SWOT analysis, where you will think about how the strengths,

weaknesses, opportunities, and threats of the organization can be aligned much like

someone aligning the colored squares on a Rubrik’s Cube to win the game. Your

strategic options and you choice of strategies to achieve the organization’s goals and

progress toward its guiding stars will be derived from this SWOT analysis.

So, we will turn our attention now to doing an internal environment (system) study to

identify and evaluate the strengths and weaknesses of the organization. What do we

mean by “strengths”? Several terms or synonyms help us understand the varied

dimensions of an organization’s strengths, e.g., we can think of strengths, resources,

capabilities, competencies, capital, or assets. The specific term we use in a given

context might emphasize some dimension or follow common usage in that context.

Organizations have a variety of strengths (resources, capabilities, competencies,

capital, or assets) they can use to create value. They may be the traditional ones you

have encountered in accounting classes, like physical capital (plants, equipment,

inventory) or financial capital. These are typically easy to see or to count and to

represent on a financial statement as the capital or assets of the organization. But

there are other important strengths (resources, capabilities, competencies, capital, or

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assets) that may be less visible, more intangible, and quite difficult to count or

measure. We know for example that there is value to the knowledge in the head of

an employee and in the relationship between a buyer and a supplier. It is not easy to

see or to “count” these things, but they do count!

We group these less visible, less tangible types of strengths (resources, capabilities,

competencies, capital, or assets) into three main categories: human capital (the

knowledge, skills, and capabilities of the individuals in the organization), structural

capital (the features of the organization that make it work well, such as its reporting

structure, its MIS, and its culture), and relationship capital (the nature of the links

among employees, suppliers, customers, and other stakeholders) (Daum, 2002;

Stewart, 1997). Human capital, structural capital, and relationship capital comprise

what is often termed intangible assets in contrast to tangible assets like financial

capital, land, factories, plant & equipment, railroads, trucks, etc.

(Note: Many strategy thought leaders use the term “resources” as a synonym for

“assets” or “strengths” or “capital.” Further, they identify two main types of resources:

1) tangible and 2) intangible. At the same time, some strategy thought leaders use the

term “resources” differently to refer to “what we have,” whether individual or

organizational and whether tangible or intangible, and they use the term “capabilities”

to refer to “what we do well,” again whether individual or organizational and whether

tangible or intangible. As in many intellectual disciplines today, where understandings

are developing and changing rapidly, terminology in strategic management must be

understood in the context of the authors’ use and/or topic under discussion.)

In this Session, we will focus our internal Environment study on the business model,

marketing mix, and tangible assets of the organization. In the next Session, we will

focus our Internal Environment study on the intangible assets of the organization and

on the core competencies and dynamic capabilities of the organization. We will

conclude that session with an identification of the organization’s most important

strengths and weaknesses.

Research and Analysis Follow the steps below to begin describing, understanding, and assessing the assets,

or resources and capabilities, that your organization has to work with as it lives out its

mission and pursues its long-term goals, vision, values, and purpose. Your ultimate

objectives in doing so are to explain how the organization allocates and utilizes these

resources or assets; to identify its major strengths and weaknesses; to understand

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which strengths (resources and capabilities) are valuable, rare, inimitable, non-

substitutable, and capable of organizational support (VRIN/VRIO); and to consider how

the organization can best improve its strategic focus and differentiation in the market

for sustained competitive advantage over time.

As you go through each step, be willing to go back and update previous work in your

case study as you learn new things about your organization!

Be certain to provide an APA-format reference for each source you use in your study.

When you refer to a source in your responses to the questions below within your case

write up be sure to include an APA-format inline citation to the source.

Step 1: How would you describe the business model of the organization? (A business

model describes the rationale of how an organization creates and delivers value to

those whom it chooses to serve and how it captures value so that it can obtain the

resources to continue in business. It is a design for the success of the business or

organization. See https://hbr.org/2015/01/what-is-a-business-model.) What do you

think are the strengths and weaknesses of the organization’s business model?

Step 2: How would you describe the marketing mix of the organization? (The

marketing mix is unique combination of the products, prices, places, and promotions

used by the organization to add value to those it serves and succeed itself. See

https://hbr.org/1985/09/rejuvenating-the-marketing-mix. ) What do you think are the

strengths and weaknesses of the organization’s marketing mix?

Step 3: Using available resources (e.g., last five years of financial statements, industry

reports, personal historical experience, etc.), build upon the very general financial

information you acquired earlier in your study about the organization. Assess the

financial model and financial management of the organization.

Is there an explicit financial model that is being used to forecast financial performance

or is it implicit or non-existent? Can it be described? What are the strengths and

weaknesses of the organization’s financial model?

(See https://corporatefinanceinstitute.com/resources/knowledge/modeling/what-is-

financial-modeling/ )

a) Summarize your overall perspective of the financial operations and situation over

the history of the organization and over the last five years. Is the financial

management of the organization adequate? Is it getting better?

https://hbr.org/2015/01/what-is-a-business-model

https://hbr.org/1985/09/rejuvenating-the-marketing-mix

https://corporatefinanceinstitute.com/resources/knowledge/modeling/what-is-financial-modeling/

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b) Are the financial statements audited regularly? Does the organization’s financial

management help or hinder its ability to attract more investors, value chain

partners, top talent employees, other stakeholders?

c) Describe the price and cost structure of the organization and compare it to its

competitors. What explains any comparative difference between the price and

cost structure of the organization and the cost structure of others in the industry?

d) Select several strategically significant financial ratios for the organization.

Calculate the ratios and interpret the meaning of the ratios for the purposes of this

study. Consider including ratios useful across companies as well as those that may

be particularly important within the same industry as your organization.

e) To what extent will the financial model of the organization help or hinder its ability

to maintain what it is currently doing over the long-term?

f) What changes need to occur in the financial model of the organization for it to

undertake new strategies?

Step 4: The tangible assets of organizations include financial capital (cash, accounts

receivable, securities), land, minerals & other natural resources, roads, railroads,

vehicles, buildings, factories, warehouses, equipment, machinery, supplies, inventory,

etc. You studied the financial assets of the organization above. Now, identify the other

important tangible assets the organization possesses.

Beyond its financial strengths, does the organization appear to possess the necessary

tangible assets to compete effectively in its industry or market?

How do its tangible assets seem to compare with its major competitors?

Which of its tangible assets appear to be of strategic importance to its competitive

success in the future?

How might the organization better leverage its tangible assets for strategic advantage?

Case Write-Up Sift through the information obtained through your research and analysis, interpret

what is significant from what isn’t, organize the information, and write a 2-3 page draft

characterizing the internal environment of your organization studied in this session,

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i.e., focusing especially on its business model, marketing mix, and strategically

important tangible assets.

Save this draft into the Living Case Study Template under the appropriate heading. You

will revise it from time to time as you continue your study, encounter additional

information on this session’s topic, and gain richer understandings of the information

you collected in this session. At the end of your study, you will do a final revision of this

material and integrate it seamlessly into your final strategic Living Case Study on this

organization.

L I V I N G C A S E S T U D Y

INTERNAL ENVIRONMENT II Intangible Assets, VRIN/VRIO Analysis, Strengths & Weaknesses.

aving gained understanding of some critical internal characteristics of the

organization, viz., its business model and marketing mix, and assessing the

strengths of its tangible assets, e.g., its financial position, we will go further in

our internal study of the system of environment of the organization identifying and

evaluating its intangible assets. We will then do a VRIN/VRIO analysis to help identify

the strategically important strengths and weaknesses of the organization.

Research and Analysis Follow the steps below to describe, understand, and assess the internal assets, or

resources and capabilities, that your organization has to work with as it lives out its

mission and pursues its long-term goals and vision. Your ultimate objectives in doing

so are to explain how the organization allocates and utilizes these resources; to identify

its major strengths and weaknesses; to understand which strengths (resources and

capabilities) are valuable, rare, inimitable, non-substitutable, and capable of

organizational support (VRIN/VRIO); and to consider how the organization can best

improve its strategic focus and divergence in the market for sustained competitive

advantage over time.

As you go through each step, be willing to go back and update previous work in your

case study as you learn new things about your organization!

Be certain to provide an APA-format reference for each source you use in your study.

When you refer to a source in your responses to the questions below within your case

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write up, or to information in the source, be sure to include an APA-format inline

citation to the source.

Step 1: What can you learn about the human capital of the organization that may be

differentiated from its competitors?

The human capital of the organization is comprised of the people of an organization

and their health, knowledge, skills, competencies, creativity, experience, education,

training, credentials, motivation, attitudes, job satisfaction, energies, commitments,

relationships, political & networking connections, productive value to the

organization, etc.

a) Describe the leadership and management of the organization.

Do the leaders and managers appear to have the knowledge, skills, and abilities

needed to make the organization effective? What appears to be their character,

leadership traits, and leadership style?

Do they appear to ubiquitously employ "the marketing, concept" in everything

they do?

Do they develop the character and personal leadership traits of their employees?

Do they foster the disciplines of a "learning organization"? Do they value learning,

innovation, and change for the better? Do they appear to be willing to change and

adapt? Do they habitually use AARs (after action reviews) and the PDSA approach

to learning and continuous improvement? Do they engage their employees in the

ongoing strategic management process?

Can you think of any other core competencies of the organization inherent in its

leadership and management?

b) Characterize the employees of the organization.

Do they have the knowledge, skills, and abilities needed to accomplish the work of

the organization? Do they value learning? Do they appear to be willing to change

and adapt? Do they seem to be willing to work collaboratively?

Can you identify any other core competencies of the organization inherent in its

employees?

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c) What is the reputation of the organization for how it leads, manages, and develops

its employees? Is it known as a great place to work? Does it retain employees for

long periods or suffer from significant turnover? Do employees love working for

this organization or hate their jobs? What kind of benefits does it provide its

employees that builds them up and increases their capabilities to contribute now

and in the future?

Step 2: What can you learn about the structural capital of the organization that may

be differentiated from its competitors? The structural capital of the organization

includes those intangible, intellectual assets within the organization that remain with

an organization after its people leave work and go home. Ultimately, structural capital

is developed by the organization’s human capital.

a) What are the implications of how the organization is incorporated legally? What

are the strengths and weaknesses of this legal form or type of organization in the

market?

b) How is the organization currently organized, i.e., what is its basic structure?

Find out how the company is currently organized (i.e., its organizational structure,

e.g., functional, divisional, matrix, hybrid). Provide a high-level organization chart,

showing, at a minimum, each unit in the top level of the structure, as in Figure 4.2.

Provide a brief statement of the purpose of each of the units. (The web site The

Official Board, theofficialboard.com, may be helpful in completing this step.)

Figure 4.2: High-level Functional Organizational Structure.

How would you characterize this structure? (If you need to review information on

organizational structure, please reference any introductory management

textbook, such as the online textbook Principles of Management, by Bauer,

Erdogan, Short, and Carpenter (Chapter 7: Organizational Structure and Change),

available through flatworldknowledge.com.)

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How is the board’s governance function and the executive management function

organized and how do they work together? Are there any industry, company, or

news reports that shed light on this?

Summarize the governance and executive management functions in a high-level

organization chart, showing how the board and executive management team work

together. How would you characterize the effectiveness of this structure?

Overall impression: Is the structure of the organization a “legacy structure” or

does it evolve with changes in strategy? Does this structure seem to be “working”

for the organization or does it need to be updated?

Do the groupings of people and the formal channels of communication seem to be

impeding the organization in any way, or is it actively supporting the organization?

Strategy and structure alignment: Remember that whatever recommendations

we make to improve the current strategic management of the organization, these

recommendations must involve revisiting the fit between the current strategy and

structure. However the strategy changes, the structure needs to adjust

accordingly.

Is the organizational culture of the organization dynamic and evolving across all its

functions and areas so that it can be creative, innovative, and adaptive?

Does the culture seem to be impeding the organization in any way, or is it actively

supporting the organization and its current strategy and progress in meeting its

goals and objectives?

c) How would you characterize the culture of the organization across all its functions,

e.g., teaching and mentoring, management and operations, leadership and

governance?

Is the culture the same across the functions or areas of the organization? Does the

culture bring out the best in the people of the organization? Is the human capital

of the organization learning and growing optimally as they work in the

organization?

Does the organization’s culture encourage capability-creating values and practices

like openness, ethical and professional business behaviors, genuine organization-

wide participation, future-oriented thinking, creativity and innovation, etc.?

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You have now looked broadly at some of the major core competencies (bundles of

cross-linked distinctive resources and capabilities) of the organization, its business

model, its marketing mix, its financial model and management, its organizational

structure, its leadership and management, its employees, and its general culture.

These are some of the “big slices of the pie.”

But sometimes little things can make a big difference. Before going on to Step 6, stop

for a moment and think if there is anything else about the organization that constitutes

a very important distinctive resource or capability.

Throughout business history, the historical trajectory and future of organizations have

sometimes been greatly changed because of one new person, new idea, new skill,

response to a new event, and so forth. What small, overlooked distinctive resources

or capabilities could be dramatically useful to the organization with the right strategy?

Step 4: What can you learn about the relationship capital of the organization that may

be differentiated from its competitors? The relationship capital is the value of an

organization's relationships with customers and stakeholders, including their

intangible loyalty to the organization and its products or services, based upon

reputation, purchasing patterns, ability to pay, etc. Customer-relationship capital

includes brands, trust, networks, contacts, value chain and distribution channel

arrangements, etc.

a) Review your examination of the organization’s marketing mix. How effectively

does it win, retain, and bond loyal customers to the organization?

b) How do the organization’s customers feel about it compared to competitive

organizations in its market or industry?

c) Do the leadership and employees of the organization continuously strive to

develop a customer-in mindset in everything the organization does?

d) How is the organization’s relationship to its customers evolving over time?

e) How strong is the organization’s brand in its market or industry?

Step 5: Describe the core competencies of the organization and explain how these are

or are not different from its competitors. (A core competency is a bundle or linked set

of distinctive resources, dynamic capabilities, skills, technologies, or activities that the

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organization has developed over time that are relatively unique to the organization.)

Ask yourself these questions:

What does your organization do particularly well?

What is the reputation of the organization based upon? Does this relate to some

special expertise, skills, capacities, or know-how that can drive superior performance

over that of other competitors in the market?

Apart from what it self-promotes or its reputation, but based upon its past and current

performance with respect to its competitors, what is the organization uniquely good

at doing that can create value for customers?

Step 6: Conduct a VRIN/VRIO analysis of the distinctive resources and capabilities of

the organization. See

https://open.oregonstate.education/strategicmanagement/chapter/4-vrio-analysis/

Use a grid chart to assess to what extent each of these is valuable, rare, inimitable,

and supportable by the organization.

(We will want to review this step again when we have completed our study of the

external systems or environment to the organization and try to determine areas

where we could use distinctive VRIN/VRIO strengths (or resources and capabilities) to

create a sustained competitive position and advantage for the organization through

focus and divergence.)

Step 7: Drawing on your findings in Steps 1-6 above, identify and describe 5-8 of the

major strengths of the organization. Frame each strength as a situation inherent to or

residing inside the organization.

A fairly flat organizational structure, for example, along with other supporting data,

might suggest the strength: Current organizational design enables employee

autonomy and more rapid decision-making.

Step 7: Drawing on your findings thus far, identify and describe 5-8 of the major

weaknesses of the organization. Frame each weakness as a situation inherent to or

residing inside the organization.

https://open.oregonstate.education/strategicmanagement/chapter/4-vrio-analysis/

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A fairly tall, hierarchical organizational structure, for example, along with other

supporting data, might suggest the weakness: Current organizational design creates

decision-making bottlenecks and slower decision-making processes.

Case Write-Up Sift through the information obtained through your research and analysis, interpret

what is significant from what isn’t, organize the information, and write a 2–3-page

draft characterizing the internal environment of your organization:

1) in terms of its differentiated tangible and intangible resources (and core

capabilities), and

2) in terms of how the organization allocates and utilizes these resources (and

core capabilities).

Include a summary of your assessment of the overall capacity of your organization to

change and embrace new strategies.

Describe the major Strengths and Weaknesses of your organizations based on your

characterization of the internal environment.

Save this 2–3-page draft into the Living Case Study Template under the appropriate

heading. You will revise it from time to time as you continue your study, encounter

additional information on this session’s topic, and gain richer understandings of the

information you collected in this session. At the end of your study, you will do a final

revision of this material and integrate it seamlessly into your final strategic Living

Case S

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EXTERNAL ENVIRONMENT I Dynamic Systems Perspective, PESTEL Analysis, Tentative Identification of Opportunities and Threats.

aving understood something of the history of the organization you are

studying from the past through the present, and something of the “guiding

stars” (statements of purpose, values, vision, mission, long-term goals, creed,

philosophy, beliefs, business principles, etc.) it is focused upon as it looks to the future,

you studied the organization from the perspective of its internal system or

environment. This should have given you many insights about the organization that

will inform your identification of strategic options going forward, and at the least it

should have given you a sense of the organization’s primary strengths (resources,

assets, capital, capabilities) and weaknesses.

You will seek next to understand and evaluate the external systems or environment in

which the organization seeks to execute its mission, by deploying strategies to achieve

its long-term goals, to progress towards its vision of the future. It is to this changing

environment that the organization must continually and successfully adapt, and

perhaps it may even strive to influence this environment.

Research and Analysis Follow the steps below to describe, understand, and assess the structure and nature

of the external environment in which the organization works. You will approach this

work from two perspectives, the dynamic systems perspective (this week), and the

market competitive perspective (next week).

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When you have completed the research and analysis on the external systems or

environment from these two perspectives, you should be able to use your findings to

clearly describe the major opportunities and threats facing the organization.

The Dynamic Systems Perspective: PESTEL Analysis. Begin by raising your

consciousness to consider your organization, which is a social system, in the context of

larger systems, like a group of Russian dolls, one inside the other: it is part of a market,

an industry, a state, a region, a nation, an industry, a global economy and society, etc.

Think of the world as a global system where everything affects everything else. In fact,

this is what modern mathematics and scientific theories teach us. Systems theory,

system dynamics, cybernetics, and chaos theory provide even clearer understandings

about how even the smallest change at one place in the world, which is a global non-

linear system, can have dramatically much larger effects far away from the initial

cause.

In 1963, Edward Lorenz demonstrated mathematically that this was so, and he used

the illustration of how a butterfly might flap its wings, or not, on one side of the world,

and mathematically the effect sometime later could be a hurricane on the other side

of the world. Consider reading the famous little book by Andy Andrews, The Butterfly

Effect. The cost of a Kindle download is nominal, and the book only takes about fifteen

minutes to read, but it will dramatically change forever the way you see the world and

your life in it.

Two other paradigm-shifting books you should read someday soon to develop your

ability to see dynamic systems’ influence in your life and work experience in practical,

impactful ways are:

Boulton, J., Allen, P., & Bowman, C. (2015). Embracing complexity: Strategic

perspectives for an age of turbulence. New York: Oxford University Press. (This is an

easy-to-understand book by a theoretical physicist, a strategic management professor,

and a strategy consultant that enables you to see differently the world in which we

must lead and manage our individual and organizational journeys. The book

accomplishes in the reader a paradigm shift that will have very practical and

permanent effects.)

Capra, F., & Luisi, P. L. (2016). The systems view of life: A unifying vision. New York:

Cambridge University Press. (The title, and especially the subtitle, expresses well the

book’s import. It is written by a physicist and a biochemist, who nonetheless

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understand many different disciplines, and it integrates all the most important

developments in modern thought. It also points out the practical usefulness of these

developments for individual lives, organizations, and societies.

With this dynamic systems perspective in mind, conduct research to gather

information that will help you identify and reflect upon the political, economic,

sociocultural, demographic, scientific and technological developments, natural

environmental, legal and regulatory trends and forces that are currently, and will, in

the future, impact the organization. Collect as many relevant facts and observations as

you can along these lines.

In the Helmke Library you can find many news articles, analyses, studies, etc., that can

enable you to understand richly the dynamic systems environment your organization

operates in. See in particular some of the resources at these links:

Research a Company

Research an Industry

News and Current Events (Business Related)

PESTEL Analysis

(Be sure to provide an APA-format reference for each source you use to complete the

following steps. When you use information from one of the sources in your responses

to the questions below, be sure to include an APA-format in-text citation to the

source.)

Gather, organize, and interpret the impact or consequences of this information into

a complete and detailed PESTEL Analysis Grid Chart. When done conscientiously and

well, this grid chart is often extremely illuminating!

https://library.pfw.edu/business/company

https://library.pfw.edu/business/industry

https://library.pfw.edu/business/news

https://library.pfw.edu/business/pestel

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Figure 3.1 Partial PESTEL Analysis

How, for instance, is the current political environment of your organization affecting

it? (Consider everything from local to national to international politics!)

How may various changes in the political environment in the future (both the near

future and further out) affect it?

Repeat and answer these two questions for the economy, society and culture,

technology, natural environment, and the legal and regulatory milieu. A partial

example of this analysis is shown in Figure 3.1

It may be helpful to first identify current and future trends in each of these six areas,

then to think about what consequences each could have for your organization.

Remember that these external system forces are dynamic, i.e., they are constantly

changing. Reflect on and consider carefully the trajectory of these forces and their

current or potential future influence upon your organization.

Be sure that you frame each item to show how the environmental force is currently

acting on or may eventually act on (or impact) the organization.

Is the influence of this environmental force likely going to be an opportunity or a

threat to your organization?

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If your organization is currently responding to the environmental force or trend, make

note of how they are doing so.

If your organization is apparently unaware of or currently not responding to any of

these forces, this is a major finding of your study! Begin to think of how you will

recommend that your organization respond.

Case Write-Up Sift through the information obtained in your research and analysis. Analyze or

interpret what is significant from what is not, i.e., what are signals for your

organization at this time in its experience versus what is simply noise that is not

significantly relevant to your organization.

Organize the information and your interpretation of its meaning or significance. Keep

asking and answering questions like these:

Why is this information relevant to my organization currently or in the

emerging future?

What potential impact will these political, economic, social, technological,

environmental, and legal forces have on my organization?

Where are they likely to create opportunities?

Where are they likely to create threats?

Then, describe the significant opportunities and threats suggested by your

characterization of the PESTEL forces stemming from your organization’s external

environment.

Develop a tentative list of the 5-10 most important opportunities and threats

revealed by your Dynamic Systems Perspective study using a PESTEL Analysis.

(You will revise and finalize this list after you have done your market competitive

analysis using Porters Five Forces Model of industry competition.)

Write your own 2–3-page draft that illumines the dynamic external systems or

environment in which your target system or organization operates.

L I V I N G C A S E S T U D Y

Save this 2–3-page draft by inserting it into the Strategic Living Case Study Template

under the appropriate heading. You should revise it from time to time as you continue

your study, encounter additional information on this session’s topic, and gain richer

understandings of the information you collected in this session. At the end of your

study, you will do a final revision of this material and integrate it seamlessly into your

final Strategic Living Case Study on this organization.

L I V I N G C A S E S T U D Y

EXTERNAL ENVIRONMENT II Market Competitive Perspective, Five Forces Analysis, Final Determination of Opportunities and Threats.

aving understood something of the history of the organization you are

studying from the past through the present and something of the “guiding

stars” it is focused upon as it looks to the future, you then studied the

organization from the perspective of its internal system or environment. This should

have given you many insights about the organization that will inform your

identification of strategic options going forward, and at the least it should have given

you a sense of the organization’s primary strengths (resources, assets, capital,

capabilities) and weaknesses.

Next you began a study of the external systems outside of the organization so that you

could understand and evaluate the environment in which the organization seeks to

execute on its mission, by deploying strategies to achieve its long-term goals, in order

to progress towards its vision of the future. It is to this changing environment that the

organization must continually and successfully adapt, and perhaps it may even strive

to influence this environment.

The first part of your study of the external environment engaged a dynamic systems

perspective. You did a PESTEL Analysis to look at the macro environment to identify

some of the trends, dynamics, and forces affecting your organization now and in the

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L I V I N G C A S E S T U D Y

emerging future, i.e., you looked at the political, economic, sociocultural,

technological, environmental, and legal realities relevant to your organization. This

PESTEL Analysis gave you a tentative sense of some of the important opportunities

and threats facing the organization today and going forward.

The second part of your study of the external environment engages a market

competitive perspective. You will do a Five Forces Analysis to look at the industry or

market environment of your organization so you can identify the forces within this

arena that affect your organization and give you a more complete sense of some of

the important opportunities and threats facing the organization today and going

forward.

Research and Analysis Follow the steps below to describe, understand, and assess the structure and nature

of the industry or market environment in which the organization operates from the

market competitive perspective. When you have completed your Five Forces Analysis,

you should be able to use your findings, along with your finding from your PESTEL

Analysis to clearly describe the major opportunities and threats facing the

organization.

Be certain to provide an APA-format reference for each source you use to complete

the following steps. When you use information from one of the sources in your

responses to the questions below, be sure to include an APA-format in-text citation to

the source.

Step 1: The Market Competitive Perspective: Five Forces Analysis.

a) Who are your competitors? Your organization shares its environment with a

variety of other organizations that compete for similar resources and customers

(or the equivalent). Identify the most significant, direct competitors of your

organization. Characterize each competitor with respect to your organization, i.e.,

how does each competitor stack up against your organization in the competition

to serve common customers in this market or industry. Which of the organizations

are leaders and which are followers? Be comprehensive in your work here, as you

will draw on it in upcoming sessions.

b) How is your organization different? In 2009, Oliver Williamson won the Nobel

Prize in Economics because he discovered the answer to a fundamental question,

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which no one had been able to truly explain before, namely, “Why do

organizations exist? Why don’t we just have a global market and customers?” The

theory he put forward and validated was that organizations exist to mediate

between the global market and customers, particularly in terms of creating value

by minimizing the “transaction costs” (time, energy, trouble, money, etc.) involved

in meeting the needs of customers by the global market. (Think of Amazon.com

which made Jeff Bezos the richest man in the world for a time.)

Williamson’s theory drives us to search out and identify how it is that the

organization is different from other organizations in the way it creates value by

minimizing the transaction costs to customers. Using your research to this point,

describe what makes your organization different from each of its competitors in its

industry in these respects. Think hard. Try to be as detailed here as you can be.

Company studies, industry reports, and news articles may be helpful here.

c) What is the nature of the relationship between competitors, with suppliers,

and with customers? Complete the study of the position of your organization

within its industry using Porter’s Five Forces model.

(Review this material in your textbook if you need to do so. Use the index or table

of contents to find it. This website provides you with more “how to” guidance on

how to do a Five Forces Analysis as part of your external environment study, and

it provides a number of quality research resources to help you: How to Do a Five

Forces Analysis from Baruch College, City University of New York.)

Be explicit and detailed. Describe and discuss:

1) the threat of new entrants in the industry, i.e., potentially new competitors

as they may affect your organization;

2) the threat of substitute products or services, i.e., the other products and

services that can “perform the same function as the typical product or service

of the industry, as they may affect your organization;

3) the bargaining power of customers of this industry, as this affects your

organization;

4) the bargaining power of suppliers to the industry, as this affects your

organization;

https://guides.newman.baruch.cuny.edu/c.php?g=188285&p=1244097

L I V I N G C A S E S T U D Y

5) and the intensity of competitive rivalry, as this affects your organization.

(See Porter, 1980, p. 23).

Step 2: Drawing on your findings in the Five Forces Analysis tentatively identify and

describe 5-8 of the major opportunities facing the organization. Frame each

opportunity as something present or evolving outside of the organization.

Example: If you identified the current technological trend: the ever-increasing

popularity of social media, then a potential opportunity for your organization might be

described as: Current and emerging forms of social media offer avenues for forging

new and improved relationships with customers, prospective customers, and other

stakeholders.

Step 3: Drawing on your findings in the Five Forces Analysis tentatively identify and

describe 5-8 of the major threats facing the organization. Frame each threat as

something present in or emerging from outside of the organization.

Example: If you identified the current technological trend: the ever-increasing

popularity of social media, then a potential threat for your organization might be

described as: Current and emerging forms of social media offer increased risk for loss

of reputation via negative campaigns targeted at the company and its products,

employees, suppliers, and other associates.

Interview Suggestion

If you could interview one or more knowledgeable people in your organization who

would be open to conversations with you on your strategic case study, what would

you like to ask them to pertain to the topics and questions of this session?

An organization looks one way to insiders, but it looks quite another way from the view

of an outsider! The “insider” may be uniquely insightful, but to some extent the insider

might be myopic or share merely personal opinions relevant to that individual. Seek

out also the perspective of classmates or other outsiders and compare these.

This interview process may be a good step for you to take each week.

Case Write-Up Sift through the information obtained in your research and analysis. Analyze or

interpret what is significant from what is not, i.e., what are signals for your

L I V I N G C A S E S T U D Y

organization at this time in its experience versus what is simply noise that is not

significantly relevant to your organization.

Organize the information and your interpretation of its meaning or significance. Keep

asking and answering questions like these:

Why is this information relevant to my organization currently or in the

emerging future?

What potential impact will these five competitive forces have on my

organization?

Where are they likely to create opportunities?

Where are they likely to create threats?

Synthesis Step: Now, review the tentative opportunities and threats from the PESTEL

Analysis and the tentative opportunities and threats from the Five Forces Analysis.

Compare and contrast these, integrate or combine these where possible, and then

describe a final synthesized list of the 5-10 most important opportunities and threats

suggested by your study of the PESTEL forces and the competitive forces on your

organization stemming from your its external environment.

Write your own 2–3-page draft that illumines the dynamic external systems and the

competitive environment in which your target system or organization operates.

Save this 2–3-page draft by inserting it into the Strategic Living Case Study Template

under the appropriate heading. You should revise it from time to time as you continue

your study, encounter additional information on this session’s topic, and gain richer

understandings of the information you collected in this session. At the end of your

study, you will do a final revision of this material and integrate it seamlessly into your

final Strategic Living Case Study on this organization.

L I V I N G C A S E S T U D Y

CURRENT LONG-TERM GOALS AND STRATEGIES Identifying and Assessing the Current Long-Term Goals and Current Strategies to Achieve Them.

aving understood something of the historical development and guiding stars

of the organization you are studying, and having completed assessments of its

internal and external environments, you will seek next to understand and

evaluate the long-term goals or objectives of the organization and the strategies the

organization is currently using to execute on its mission, successively achieve its goals,

and move toward its future vision, in alignment with its values and purpose.

Sometimes these long-term goals and strategies are conscious, explicit, and publicly

stated. More often, however, the real long-term goals and strategies that drive daily

decisions and ongoing operations are not fully conscious, explicit, or publicly stated.

Indeed, sometimes the quasi-conscious, implicit, privately held long-term goals and

strategies of key individuals are more powerful and influential in their influence upon

the real direction of the organization. Identifying, evaluating, and revising the current

(actual or operable) long-term goals and strategies—whether they are de jure or de

facto, explicit or implicit—is an important step in the strategic management process.

Research Follow the steps below to identify and evaluate the current long-term goals and the

strategies currently being pursued by the organization.

Be certain to provide an APA-format reference for each source you use. When you

refer to a source in your responses to the questions below, or to information in the

source, be sure to include an APA-format in-text citation to the source.

Session

L I V I N G C A S E S T U D Y

Step 1: Identify long-term goals. David (2009) defines the long-term goals (or

objectives) of an organization as those “results expected from pursuing certain

strategies” that “should be quantitative, measurable, realistic, understandable,

challenging…” (p. 144).

Look for evidence of the long-term goals of your organization in any accessible

documents. These may be formally delineated in a readily accessible, publicly

available document, but more likely, you will need to comb through your previous

research, including the annual report, letters to shareholders, and transcripts from

shareholder meetings and updates.

If you are currently working for this organization, try to interview one or more leaders

and managers about the long-term goals of the organization. Describe your findings,

including as much detail as possible for each long-term goal.

Step 2: Evaluate the long-term goals.

Do these long-term goals explain or provide a rationale for all the activities of the

organization? In order words, what can you infer about the long-term goals of the

organization from its investments and actions? Do all the investments and actions of

the organization appear to be directed toward achievement of long-term goals?

Do you think some long-term goals are missing that should be identified for the

organization? Does the organization engage in legacy activities that are not related to

any of its current long-term goals?

Do the stated or apparent long-term goals seem to be effective in drawing the

organization towards its higher order guiding stars?

Review these resources on Goal Setting Theory and Expectancy Theory. Considering

these theories, how might the organization improve delineation of its long-term goals?

Step 3: Identify the current strategies.

There are various types of strategies organizations may pursue:

Strategies may be characterized broadly, as are Michael Porter’s (1980) generic

strategies of cost leadership, differentiation, and focus (cost or differentiation).

https://positivepsychology.com/goal-setting-theory/

https://www.managementstudyguide.com/expectancy-theory-motivation.htm

L I V I N G C A S E S T U D Y

Strategies may also be characterized more specifically. Your textbook also talks about

various business level and corporate level strategies organizations use. Illustratively,

David (2007) describes a few of these more specific strategies, as shown in Table 5.1.

Table 5.1 Specific Types of Strategy

Other course materials, such as that of Luecke and Collins (2005), in their chapter titled

Types of Strategy, describe other types of strategies, such as the customer relationship

strategy and the network effect strategy.

Does the organization formally describe anywhere the strategies it is currently using

to accomplish its long-term goals, as it executes on its mission and achieves its vision?

If so, state each strategy using terms like those presented above.

The more typical situation is that the organization will not clearly state its strategies.

You must then:

▪ Find out what analysts’ reports, industry reports, media stories, and other

reputable sources say about the organization and infer what its conscious or

quasi-conscious current strategies are. (Do NOT use papers, presentations, or

analyses that have been written by other students, or websites such as

fernfortuniversity.com or panmore.com, as sources of information. These are

not reputable sources, nor will they contain current information.)

L I V I N G C A S E S T U D Y

▪ Reflect on what you know about its purpose, values, vision, mission, and long-

term goals—remember that long-term goals are the results expected from

pursuing certain strategies—and infer what its strategies are.

▪ Look at the decision pattern of the organization. Mintzberg (1978) studied the

strategies of many organizations and concluded that in some of them, the

strategy is not made explicit, but rather emerges as a “pattern in a stream of

decisions.” When this is the case, try to infer what its strategies are based upon

the pattern in its stream of decisions.

Don’t give up until you get something! Remember: “Every firm competing in an

industry has a competitive strategy, whether implicit or explicit” (Porter, 1980, p.

xxi).

Be sure to use the appropriate terminology whenever possible in describing each

strategy, e.g. “Acme Corporation is pursuing a market development strategy by

expanding into India…” or “Acme Corporation recently launched a major retrenchment

strategy, cutting 4,000 full time employees and selling off its service operation…” If you

cannot express the activities of an organization using the terminology presented in this

section, those activities may be tactics, not strategies.

Step 4: Evaluate the effectiveness of the current strategies.

Why do you think the organization is using the strategies it thinks or says it is using?

What seem to be the results? Is the organization achieving its goals? Is it increasing its

profitability?

Is the organization increasing its internal strengths and capacities, and reducing

weaknesses, as a result of its strategies?

Do the strategies of the organization clearly utilize its core competencies, its

differentness in the market?

Are the strategies taking advantage of the organization’s opportunities? Are they

addressing the organization’s threats?

Are the strategies improving the competitive position of the organization in its industry

and in the marketplace?

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Step 5: Check for alignment.

Does there seem to be “alignment” between the organization’s purpose, values,

vision, mission, long-term goals, and strategies? Explain.

Does the organization consciously relate its long-term goals to its guiding stars, on the

one hand, and to its strategies, on the other hand?

If the organization does not articulate how its long-term goals and strategies relate to

its guiding stars, what can you infer from what you know? Describe how you

understand these relationships.

Case Write-Up Sift through the information obtained and interpret what is significant from what is

not, organize the information, and write your own 2–3-page draft, describing the

current long-term goals and strategies of the organization, and clearly describing how

you identified each (e.g., inferred from a long-term goal, inferred from a pattern of

decisions, etc.). Also present your assessment of each goal and its strategy, as well as

how well the strategies work together with the mission of the organization and toward

the vision, values, and purpose of the organization.

Conduct your evaluation and assessment considering your previous investigations. In

other words, be sure that you can explicitly and directly relate what you learned about

the organization’s strengths, weaknesses, opportunities, and threats to the details of

your evaluation and assessment of the long-term goals and current strategies of the

organization.

Save this 2–3-page draft into the Strategic Living Case Study Template under the

appropriate heading. You will revise it from time to time as you continue your study,

encounter additional information on this session’s topic, and gain richer

understandings of the information you collected in this session. At the end of your

study, you will do a final revision of this material and integrate it seamlessly into your

final Strategic Living Case Study on this organization.

L I V I N G C A S E S T U D Y

STRATEGY ANALYSIS AND CHOICE Strategy Analysis and Choice.

hus far, you have come to understand the history of the organization, the

mission, vision, and other possible guiding stars of the organization, completed

an internal and external environment assessment, and identified and evaluated

the long-term goals and current strategies of the organization.

It would be convenient if strategy was a

“once and done” task, but that is not the

case. Organizations that last over time must

constantly adapt to the changes occurring

within and without. They must constantly

reinvent themselves and their strategies to

survive. The strategies used yesterday or

being used today are not necessarily the

ones that an organization should continue

to use going forward.

In this session you will think about what the

next adaptation might be for your

organization so it can continue its success story and enhance its competitiveness.

You will review and possibly revise long-term goals and identify the potential

strategies available to your organization at this point in time to reach them,

recognizing that long-term goals or objectives are the “results expected from pursuing

certain strategies” (David, 2009). (As you do this stage of your study, remember that

Session

T For an excellent example of how

an organization has continued to

adapt its strategies to its external

environment over time, read

about Nokia, who has been doing

so successfully since 1865. You

can read about its varied history

at the Nokia web site. Look under

the About Nokia page for Who

We Are. Explore the Our History

section of this page.

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long-term goals are a type of guiding star, which themselves are derivative of higher

order guiding stars, viz., purpose values, vision, and mission.)

You will evaluate potential strategies against revised long-term goals, and you will then

choose the strategies you believe the organization should implement going forward.

Exploring Strategic Alternatives Follow the steps below to help you review and possibly revise the long-term goals or

objectives of the organization and to generate a list of strategies from which you can

select one or more that are suited to take your organization forward toward its vision

of the future, as aligned with its values and purpose. Choose the strategy or strategies

you will recommend the organization embrace to reach its revised long-term goals or

objectives and give a rationale for why you made the choices you made.

You will likely not conduct any new research or information gathering for this work.

You will rely on your findings thus far and your own thinking about them. Do not seek

out sources that make strategic recommendations for your organization. Determining

the path forward for your organization is to be your own work.

Step 1: Organize, review, update, revise and reflect upon all your work-to-date. (You

do not need to write-up anything here. Rather, you need to refill your thinking with

what you have learned thus far, so you can use it to engage in imaginative, creative,

innovative new thinking.)

What stands out to you that is potentially of strategic relevance? (Ideally, good

strategy uses leverage in systems to achieve big and long-term results from small and

short-term actions.)

What insights do you gain from reflecting on the history of the organization, i.e., its

journey from the past to the present? What path dependencies, timeless traits,

momentum, or important trajectories inform your thoughts about the best path to a

brighter future?

What are the current guiding stars (purpose, values, vision, mission) of the

organization and what recommendations will you be making to clarify, enrich, and

empower these to create a “Pygmalion effect” that pulls the organization into a

brighter future?

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What are the current long-term goals or objectives of your organization, and how must

these be revised so that they will serve as effective mileposts to help your organization

progress on its journey, toward its current guiding stars, or the guiding stars you will

be recommending?

What did your internal system (or environment) study reveal to you about the

organization’s current and potential resources, assets, strengths, and dynamic

capabilities? What are your organization’s weaknesses?

Think in particular about how your organization is, or can be, or should be

different within its target markets. How will being (more) different in this way

potentially create competitive advantages for the organization?

How can the organization use its current internal resources, strengths, or

capabilities—especially the ones that are valuable, rare, inimitable, non-

substitutable, and organizationally supported (VRIN/VRIO)—to adapt to

changes in the external environment in ways that create an increased

competitive advantage for the organization?

Which of your organization’s weaknesses can be ignored or sidelined? What

weaknesses have strategic implications for the future and must be addressed,

so that you purposefully transform these weaknesses into neutral factors or

potentially even to new strengths or dynamic capabilities?

What did your external systems (or environment) study reveal to you about the most

important forces of change, trends, and potential changes in the external environment

that will affect your organization?

Which of these changes in the external environment will present to your

organization new opportunities? How?

Which of these changes in the external environment will present to your

organization new threats? How?

What are your initial thoughts about how your organization will use its

strengths (assets, resources, capital, capabilities) to take advantage of

emerging opportunities and to side-step, reduce, or eliminate emerging

threats?

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What will your organization need to learn to adapt most effectively to the

changes you’ve identified in the external environment? What new strengths

and dynamic capabilities can (must) your organization acquire or develop in

order to adapt in ways that will enable it to survive? What must it learn, what

strengths or capabilities must it develop, in order to adapt in ways that will

enable it to thrive?

The external systems are always changing, and they are changing ever more rapidly,

i.e., the velocity of change is increasing. The internal system (organization) must

change at an equal or greater pace in a manner that fits or adapts to external systems

of which it is a part. As you think about the changes your organization needs to make,

what is necessary? Are the needed changes a matter of completely reinventing the

organization at this time or only of enabling it to evolve from what it is today to

something better? What are the implications of this?

Step 2: You have already identified and assessed your organization’s current long-term

goals or objectives. These are the results you must achieve going forward; they are

the mileposts along the journey from the present, following your organization’s

guiding stars, toward your organization’s desired future. Your strategies are the ways

you will accomplish these results.

If your organization keeps its current long-term goals or objectives, and makes no

changes, and achieves them all, what will it become as a result? Will it have progressed

effectively towards the guiding stars you recommend it should have? Will it have

adapted successfully (survive or thrive) to the changes occurring in the external

environment?

If one of your findings is that the current long-term goals or objectives need to be

revised, what will you recommend that they be? Explicate and delineate the revised

long-term goals or objectives as you believe they should be to achieve the results

needed for a better future.

Now, keep these revised long-term goals or objectives (results) in mind as you conduct

a SWOT analysis, which will lead to identifying potential strategies to achieve these

results, which will lead to choosing from alternative potential strategies those

strategies that you will recommend the organization begin to implement.

Step 3: Using the results of your internal and external assessments, perform a SWOT

analysis to generate a list of strategic options from which you could make choices.

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Think of the strengths, weaknesses, opportunities, and threats as the different colored

sides in a Rubik’s Cube. You want to get all of them matched up in such a way that

each affects the other positively.

Figure 10.1: Example of a Partial SWOT Analysis

Brainstorm and list strategies that might best match strengths to opportunities in ways

that could also eliminate, deflect, or diminish weaknesses and threats. Figure 6.1

shows a partial SWOT analysis, in a format that is easy to follow and facilitates the

matching process. The strengths and weaknesses, and opportunities and threats that

you have already identified are placed in the top row and left column, respectively.

Try to match each possible combination of strength, weakness, opportunity, and

threat to see which strategy or strategies are suggested by the combination. This is a

very creative process, and discussion and dialogue with others can help you to

generate, evaluate, and test your various options.

Is there a strategy or combination of strategies that could enable you to deal with all

of the SWOT elements you have identified, and do so in the most impactful way?

Step 4: Choose the strategy or strategies that the organization should seek to

implement going forward and give a strong rationale for your choice. Your strategies

may be selected from the strategies that you have just identified in your SWOT analysis

or from those strategies the company is currently pursuing, as illustrated in Figure 6.2.

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Be very clear by stating both the strategies (new and current strategies) the company

should implement going forward and those current strategies the company should

discontinue, giving the reasons for each.

Figure 10.2: Choosing the Strategies to Recommend

Step 5: Pause to reflect methodically and deeply on how your choice of strategies will

affect the organization as a synergistic system within the environment of larger

systems of which it is a part.

Important:

a) Review the short discussion of leverage in Peter Senge’s book, The Fifth

Discipline, from the bottom of p. 63 to the top of p. 65. This brief section is

entitled “Small changes can produce big results—but the areas of highest

leverage are often the least obvious” (Senge, 2006, p. 63). Discuss how your

strategic choices will utilize leverage to help your organization to gain and

sustain competitive advantage with respect to its competitors. Describe this

is some detail.

b) Explain how your chosen strategy or strategies will affect the prospects of

the organization within its industry and markets using Porter’s Five Forces

Model. Describe this in some detail.

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Step 6: Describe how this strategy or strategies will increase the resources, assets,

strengths, dynamic capabilities, competencies, and capacities of the organization over

time as it engages in strategy implementation.

How will your chosen strategy or strategies utilize the differentness of the

organization? How will your chosen strategy or strategies use the strengths

(capabilities) of the organization? How will the chosen strategy or strategies develop

the strengths (capabilities) of the organization going forward?

How does your chosen strategy or strategies acknowledge and embrace trade-offs

effectively? Are there any trade-offs that should be made that the strategy or

strategies does not force? If so, then ask “What’s wrong? Why are trade-offs not

forced?”

Read Senge’s, The Fifth Discipline, pp. 79-81, on the types of feedback processes found

in systems. The job of the strategist is to try to create positive, reinforcing feedback

processes of success. Explain how the strategy or strategies you are choosing to

recommend could create positive reinforcing feedback processes of success, that is,

how and why it should propel the organization forward on a trajectory of increasing

success.

Case Write-Up Sift through the information collected, collated, and reflected upon above. Focus upon

your answers to all the questions asked. Write your 3–4-page draft that a) briefly

presents the organization’s current or revised long-term goals or objectives as the

results it must achieve going forward, b) discusses the various strategic alternatives

you have considered, and c) argues for the strategy or strategies you will be

recommending. Discuss your level of confidence with respect to your alternatives and

final choices.

Save this 3–4-page draft into the Strategic Living Case Study Template under the

appropriate headings. You will revise it from time to time as you continue your study,

encounter additional information on this session’s topic, and gain richer

understandings of the information you collected in this session. Each step of the

strategic thinking process helps to illumine and potentially revise previous steps as well

as prepare for succeeding steps.

At the end of your study, you will do a final revision of this material and integrate it

seamlessly and coherently into your final Strategic Living Case Study on this

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organization. (Remember that all the elements of your strategic case study must be

logical and coherent from beginning to end.)

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STRATEGY IMPLEMENTATION I Implementing Strategies: Seeking Alignment.

here are three commonly understood stages of strategic management: 1)

strategy formulation, you assess the current situation, seek out various ways

forward, and decide on any strategic changes you will make; 2) strategy

implementation, you execute your strategies, i.e., put them into action; and 3)

strategy evaluation, in which you monitor the progress of your strategies and look for

ways to improve your strategy or its execution. Thus far, you have taken the steps that

have led you through the strategy formulation stage.

Now, it is time to act on or execute or implement your strategy. This stage has two

broad phases: 1) seeking alignment, and 2) developing and executing action plans. This

week you will work on the alignment phase.

Research: Thinking about Alignment One of the most famous business books ever is Alfred Chandler’s Strategy and

Structure: Chapters in the History of the American Industrial Enterprise. Some people

consider this the first important book in modern business strategy.

The main argument of this book is an enduring one: strategy drives structure, or as it

is commonly expressed, “structure follows strategy.” Chandler’s study demonstrated

how the structures of some of the largest and most successful US corporations evolved

over time to enable them to implement new strategies successfully.

As thought leaders have continued to reflect on this topic through the years, it has

become clear that the converse is also true. Structure has an influence upon strategy

too. Hall and Saias (1980) argued this point in an oft cited article. If you have not read

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this short but thoughtful article, you can find it via an online library database. A full

reference is provided at the end of this Guide.

So, for a time, some thought leaders in strategy argued that “strategy drove structure”

(or “structure follows strategy”) and some argued that “structure influences strategy”

(or “strategy follows structure”). Reading these arguments, and using some common

sense, one would tend to think that strategy should drive structure but that in the real-

world structure often greatly affects strategy too.

Henry Mintzberg (1990) eventually made the argument that strategy and structure are

reciprocal, or dialectical, and that they work together to help the organization move

forward like the left foot and the right foot move a person forward.

The key takeaway for your strategic living case study project is this: The strategy or

strategies that you choose may require some adjustments in the structure of the

organization to be successful. (Structure is how the entity is “organized,” and in

economic terminology it is the same as “structural capital.”)

Following the steps below, develop a list of all the adjustments that may need to be

made across the organization for alignment to exist between any new strategies and

the entity’s organizational structure.

Note: Again, the term “structure” in these considerations, stemming originally from

Chandler’s work in the 1960s, is a somewhat technical term. It does not refer only to

the organizational chart of the organization, or even to the overall organizational

design. Rather, it refers more broadly to all the things included in the term “structural

capital of the organization,” which has come into use in recent years, and therefore

includes many of the things included in the term “intangible assets.” It would be

helpful to review what is involved in the structural capital and intangible assets of an

organization before doing this next part of your strategic living case study.

Review Steps

Occasionally, this Guide may ask you to revisit a step from a previous session. This is

helpful for two reasons. First, perhaps you did not get the step quite right the first time

around, so this allows you another opportunity to improve or refine it. Since steps and

sessions build upon one another, getting certain steps “right” is critical to moving

forward successfully. Second, a review step will provide a context for the steps that

follow, giving you a solid starting point for the work they will have you do.

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Sometimes, this Guide is not so much asking you to review a previous step but to use

some work you did earlier in this study to go further, i.e., to build upon previous work

to expand your understandings for the purpose of this stage of your study.

Be careful that you do not simply view these reviews or revisits-then-build efforts as

repetitions of what you have done before but as means to move further in your study.

Step 1 (Review Step): Briefly and clearly state the current strategy of the organization

and the strategy or strategies you selected for the organization to pursue from this

point on.

Step 2: The human capital of the organization is critical to the successful

implementation of your strategy. In his book Good to Great, Jim Collins says that you

must have the “right people on the bus” if you are going to have great success as an

organization. (A brief article that provides an excellent summary of the key points of

the book may be found at Jim Collins’ web site (www.jimcollins.com). Select the

Articles tab, then click into the Good to Great article itself.) Be sure to at least read the

short section, Disciplined People: ‘Who’ before ‘What’. Reflect upon whether a

change in strategy will bring about a change in the fit or alignment of the people in the

organization with the new strategy.

Does the organization have the right people, with the right attitudes, with the right

training, the right incentives, and the necessary resources to execute the new

strategy? Look into each of these considerations. Be certain to consider the leaders of

the organization in your analysis, especially regarding how their strengths are being

utilized by the organization. (Some additional research may be helpful here.

Biographies of the executives and board members may provide you with insights. Be

certain to include references for any new database contributions. Note: Merely

providing a list of executives and board members is not useful here; what is useful is a

comparison of the characteristics of the current human capital with those needed to

execute the new strategy.)

If there are gaps in the human resources, then identify them and generate a short-list

of adjustments that will need to be made to create (or re-create) alignment, if the new

strategy is to be implemented successfully.

Step 3: Reflect again upon the culture of the organization and determine if and how

it needs to be adjusted to be aligned with the new strategy or strategies.

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Identify and inventory the culture, values, and unique qualities of your organization.

This item is important; real culture is not always visible or easily discernible, but every

organization has a different culture, and its culture is quite determinative of its capacity

to implement a given strategy and perform successfully. Not every organizational

culture can implement every possible strategy equally well.

Do the leaders appear able to lead a change in the culture so that it can be aligned with

the new strategy or strategies?

Is the gap between the current culture and the ideal culture for the new strategy

manageable, or is it too great?

When you consider how difficult it is to change the culture of an organization, does it

seem possible to align the culture with the chosen strategy or strategies?

If so, then how can this be done? If not, then what adjustments need to be made to

the chosen strategy or strategies?

Step 4: Review the organizational structure (i.e., organizational chart) for your

organization and determine if and how it needs to be adjusted to be aligned with the

new strategy or strategies.

(If you need to refresh your knowledge of the very broad, general approaches to how

organizations have typically been structured in the 20th century, have a look at any

introductory management textbook. The online textbook Principles of Management,

by Bauer, Erdogan, Short, and Carpenter (Chapter 7: Organizational Structure and

Change), for example, is available through flatworldknowledge.com.)

What is the current organizational structure? How would you label or describe it?

What are the strengths and weaknesses of this type of structure?

How do the strengths and weaknesses of this structure align with the new strategy or

strategies?

Does the current organizational structure serve the new strategy? If so, how could it

be improved to align even better?

Does the current organizational structure not serve the new strategy? If so, how should

it be changed?

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Step 5: Review the current organizational systems, management information

systems, policies, procedures, operational activities, functional activities, and

supportive activities. Explain how they need to be adjusted to create (or re-create)

alignment if the new strategy or strategies are implemented.

How rational, coherent, efficient, and effective is the organization as a system of

systems? Are there legacy sub-systems, policies, procedures, or programs that should

be “exnovated” (cleaned out, removed) from the organization? (Organizations are

constantly adding new sub-systems, policies, procedures, programs, activities, etc.,

but like hoarders, they are bad about not removing structural elements that are no

longer optimal or even helpful.)

Is the management information system functioning efficiently and effectively as the

“nervous system” of the organization?

Do any policies or SOPs need to be revisited and revised?

How will the new strategy or strategies affect each of the functional areas of the

organization like Marketing, Finance, Accounting, R&D, IT or MIS, HR, Customer

Service, etc.?

Will the current operational or supportive activities complement and reinforce one

another as a system of interdependent parts in a synergistic manner, if the new

strategy is implemented?

Or, will the new strategy require that the operations, as a system, need to be

reengineered to align effectively with the new strategy?

Step 6: Considering your work in Steps 1-5, and all your understanding of the

organization to this point, discuss whether you believe the organization can perform

the required alignment to implement the new strategy or strategies.

Does the organization have time to make these changes, i.e., will the strategy or

strategies still be relevant by the time the alignment is complete to the degree

necessary?

Does it have the financial and other resources it needs to perform the alignment?

Must the restructuring occur before strategies are executed or can the realignment

proceed in parallel with execution of action plans to implement the new strategies?

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Case Write-Up Sift through the information you have obtained and the observations you have made

during this part of your study and think about how your recommended strategies align

or do not align with the structure of your organization.

Write your own 2–3-page draft that argues for the adjustments to the organization

that will need to be made for it to be aligned with the new strategy or strategies.

Include in your draft a concise plan for how the organization could or should be

changed for alignment to exist.

Save this 2–3-page draft into the Strategic Living Case Study Template under the

appropriate heading. You will revise it from time to time as you continue your study,

encounter additional information on this session’s topic, and gain richer

understandings of the information you collected in this session. At the end of your

study, you will do a final revision of this material and integrate it seamlessly into your

final Strategic Living Case Study on this organization.

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STRATEGY IMPLEMENTATION II Implementing Strategies: Action Plans.

here are three commonly understood stages of strategic management: 1)

strategy formulation, 2) strategy implementation, and 3) strategy evaluation.

Thus far, you have taken steps that have led you through the strategy

formulation stage, and you have begun to do some planning and preparation for the

strategy implementation stage: you have identified and planned some adjustments in

the structure of the organization so that it will be in alignment with your

recommended revisions to the strategy or strategies of the organization.

This week you will work on preparing to develop a high-level action plan that

establishes the strategic management process and major goals that will be

accomplished as the strategy is executed. You will also develop a basic timeline for

achieving those goals. Due to limitations in our timeframe and the scope of this study,

you will only begin this process, so you can understand the process, but you can

continue it in your real-time, real-world experience if you are working for this

organization.

Developing Action Plans Follow the steps below to articulate what you are seeking to accomplish through your

selected strategy over the next three to five years, and then translate this ambition

into high-level but specific, measurable, achievable, relevant, and time-bound

strategic goals.

Step 1 (Review Step): Clearly state the current strategy of the organization and the

strategy or strategies you have decided to recommend for the organization from this

point forward.

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Step 2: Strategic Goals. For each strategy you are recommending, create a list of

organization-level strategic goals that the strategy should achieve, as in Figure 12.1.

Figure 12.1: Strategic Goals for the Recommended Strategies for Snack Food

Manufacturer

Check your work and revise your goals based on your answers to the following

questions. (You do not need to include your answers to these questions in your work,

but your goals should reflect that you have considered each of the questions.)

Are the goals specific enough?

Are the goals measurable?

Are the goals achievable?

Is the number of goals natural or merely arbitrary?

Are the goals compatible with one another? Do they coherently fit together?

Do they work together systemically and therefore synergistically?

Are the goals relevant to the strategy? That is, do the goals fit the strategy? Do

the goals, collectively, accomplish the strategy?

Are the goals time-specific, i.e., is the date of their achievement indicated?

Step 3: Planning Timeline. Create a basic visual figure or guide showing how your

goals will be accomplished over time. Figure 12.2 provides a very brief and simple

example for illustrative purposes. You will likely want to go into greater detail.

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Figure 8.2: Timeline for Strategic Goals for Snack Food Manufacturer

Step 4: Drawing on your previous research concerning the organizational design or

structure of your organization (e.g., functional, divisional, matrix, hybrid), describe

each major unit in the top level of the structure and state the purpose of each.

Given the unique purpose of each unit, i.e., the reason why it is a separate unit,

deconstruct each of the organization-wide strategic goals from Step 1 into unit goals.

Each should have its own “clear targets and performance measures” (Luecke & Collins,

“Action Plans,” 2005). Put another way, (a) break down your organizational-wide goals

into major unit sub goals, and (b) assign the sub goals to the appropriate organization

unit.

Check your work:

If all these units met all their goals, would the organization-wide strategic goals be

accomplished?

Would the strategy be proven effective?

Would the mission of the organization be accomplished?

Would the organization advance towards its organizational long-term goals and

ultimately toward its vision?

Are the sub goals for each major unit truly measurable, so that you will know if you

successfully achieve them?

Are the sub goals measurable in a way that is appropriate for the unit?

Are the metrics of measurement that will be used for each unit clearly stated?

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Are the objectives clear?

Are the measures and goals for each unit appropriately time-bound?

Step 5: Luecke and Collins (“Action Plans,” 2005) note: “Once specific, measurable,

achievable, realistic, and time-bound goals have been assigned at the unit level, the

question is: How will we achieve these goals? The answer is through action steps.

Action steps are the ‘who,’ ‘what,’ and ‘when’ of carrying out a strategic initiative and

achieving assigned goals. The sum of these steps should complete the job.”

Select one of the top-level units of the organization, a top-level unit for which at least

one of its unit goals is most strategic, i.e., a unit goal that would make the most

difference when it is executed successfully or select the unit you work in as the unit

where you will develop action steps.

Develop action steps to implement this one-unit goal to two levels.

Step 6: Moving from organization-wide strategies to unit goals to action steps is a

logical managerial progression, but it all remains in the “planning” phase, and nothing

of value is accomplished, unless the strategic management process empowers and

encourages employees to DO the action plans.

What steps should the organization take to train employees how to use the PDSA cycle

to DO the action plans it has made that expect them to act?

How will managers coach and guide employees so that they are engaged in the plan,

do, study, and act steps of PDSA?

What adjustments or changes need to be made in the organization’s management

practices so that the work of units and individuals is turned into an opportunity to

learn-by-doing? How will these changes be made?

Step 8: Action plans will be executed either by project management activities or

operational or systems activities.

If the execution of your action plans requires a new (unique), one-time, relatively

short-term initiative to put your action plan into practice, then you will need to create

a project management team with a trained, skilled project management leader to

initiate, plan, execute, and close this project to create a new reality in the organization.

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Few employees are adequately trained in project management skills to do the work of

contemporary organizations. For assistance go to https://www.pmotraining.com/.

If the execution of your action plans requires some degree of redesign and

improvement to your long-term, ongoing operational systems, policies, procedures,

processes, then use the skills of operations management to help you make the

necessary changes to the ongoing operations of the organization, which are how

strategic directions are turned into current activities and results.

If your action plans require significant revisions to your organizational systems and

normal operations management activities, then you may need to use a project

management team to engage in a new project initiative to make this significant

change.

Step 8: It is important to identify what new resources and collaborative arrangements

the organization needs to implement action plans and achieve goals.

What new or special resources (people, technology, support, time, money, facilities,

partners, training, etc.) will the organization and/or units need to achieve their goals?

How can these resources be acquired?

What new collaborative skills, arrangements, or activities need to be established

successfully within and without the organization to achieve the goals? How will these

interlocks happen? Who will lead and/or ensure that they are successful?

Case Write-Up Write your own 2–3-page draft that summarizes the high level Action Plan that you

will include in your strategic case paper that is focused upon the top-level unit you

select or the unit where you work.

Save this 2–3-page draft into the Strategic Living Case Study Template under the

appropriate heading. You will revise it from time to time as you continue your study,

encounter additional information to add to the topic of this session, and gain richer

understandings of the information you collected in this session. At the end of your

study, you will do a final revision of this material and integrate it seamlessly into your

final Strategic Living Case Study on this organization.

https://www.pmotraining.com/

L I V I N G C A S E S T U D Y

STRATEGY EVALUATION I Using Feedback from Learning-By-Doing Experiences and Transitioning into the Next Iteration.

Thus far, you have taken a number of stages and steps that have led you through the

strategy formulation and implementation activities of the strategic management

process. Now you are ready to learn about the activities pertaining to the ongoing

review and evaluation of the organization’s strategic leadership and management of

its journey.

These activities may also include some planning, some restructuring, and the

execution of a continuous evaluation process that includes the ongoing adaptation of

strategy to the ever-changing internal and external context.

Designing Organizational Feedback Systems and Dashboards

Like the strategy formulation and implementation stages, strategy evaluation should

be built into the systems and processes of the organization, so that as it does its work—

whether on a daily, quarterly, or yearly basis—it engages in activities that systemically

feed into the overall strategic management process.

Thinking of strategic leaders not as Industrial Age “bosses” but as Knowledge Age

designers of the organization as a living, working, learning, adapting, autopoietic

system should lead us to consider the great importance of this stage of the strategic

management process.

Strategic leaders should consciously design the systems and processes of the

organization so that they function as reinforcing feedback systems that power iterative

cycles of strategic progress in the organization. The feedback loops that leaders and

managers design into the organization’s systems and processes will drive the learning-

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by-doing experience of the organization, which will drive the continuous emergence of

a timely, apt, and increasingly competitive strategy.

It is easy to see how strategy evaluation should be built into the systems and processes

of the organization because strategy evaluation should naturally be wedded to the

control processes of management.

However, it is equally valid that the standing systems and processes of the organization

should be designed so that they feed information and insight into the formulation and

implementation stages.

Designing the systems and processes of the organization this way is necessary so that

evaluation can drive individual and organizational learning and so that organizational

learning can become the means by which continuous strategy formulation,

implementation, and evaluation can occur.

Ideally, strategy evaluation should be built into the systems of the organization in a

manner that cascades down from the larger units to smaller departments and teams

and even to individuals. The Management Information System of the organization can

be a primary tool for doing this. Ideally, it should create some real-time dashboards for

units, functions, and jobs that are interconnected to the organization’s Enterprise

Resource Planning System (ERP).

In a picture, think of the operational systems, processes, and activities of the

organization as smaller cogwheels that are connected to the larger cogwheels of

strategic management and turn the larger wheels as they turn.

Evaluation Using Affirmative Inquiry and Creating Pygmalion Effects

A good strategy evaluation process in an organization operates in the spirit of

Appreciative Inquiry, a cutting-edge leadership and management theory that

emphasizes the positive rather than the negative, that focuses upon what is going right

instead of what is going wrong, that focuses upon leveraging strengths and assets

more than raising up weaknesses identified through benchmarking, and so on. Take a

few minutes to study these few pages from the AI Commons website: Introduction to

Appreciative Inquiry - The Appreciative Inquiry Commons (champlain.edu) and

Appreciative Inquiry Commons - The Appreciative Inquiry Commons (champlain.edu).

As you build the use of Appreciative Inquiry into the strategy evaluation process, you can

build upon its use to help you create Pygmalion Effects in individuals, teams,

departments, units, and whole companies. Pygmalion Effects see the best in people and

https://aicommons.champlain.edu/learn/appreciative-inquiry-introduction/

https://aicommons.champlain.edu/

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particularly focus upon what they can become, i.e., Pygmalion Effects develop into people

and organizations a positive, powerful vision of their future that has a gravity impact that

pulls the individual or organization up into that positive, powerful vision. For some brief

insights into the use of Pygmalion Effects in leadership and management, see this Harvard

Business Review article, Pygmalion in Management.

Measuring Performance by Using the Balanced Scorecard

Evaluating the performance of an organization’s strategy, and its implementation,

involves measuring predetermined metrics of various types.

Poorly lead and manage organizations only “look in the rearview mirror” regarding their

past performance on financial metrics indicated by their financial statements. Accounting

tells us what has happened financially, i.e., it keeps score regarding the money made or

lost.

There are other metrics that are important to measure as well, and for these metrics we

need the balanced scorecard approach. This approach keeps score on 1) how the

organization is doing financially, but it also keeps score on 2) how the organization is doing

in its effort to improve its business processes and productivity, 3) how the organization is

meeting the needs of its customers and stakeholders, and 4) how the organization is

developing its individual and organizational learning skills so that it is growing its human

and structural capital over time. For a brief description of this approach, watch this short

video by David Kaplan on the balanced scorecard.

Cultivating a Learning Organization

Amy Edmonson of Harvard Business School argues that the bleeding edge of

competition in the knowledge economy is “who can learn better and faster than their

competition.”

Not surprisingly, the best led and managed organizations today strive to create a

“learning organization” where individuals and the organization as a systemic whole are

increasing their learning-by-doing skills and their ability to adapt dynamically and

successfully to the constant changes occurring in their external environment

(systems). Individuals and organizations that are continually developing their ability to

adapt through learning to external changes will naturally increase their competitive

advantages.

https://hbr.org/2003/01/pygmalion-in-management

https://youtu.be/4xXwFwQmRIM

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Reflection: Managing the Strategy After studying and integrating in your thinking the materials presented to you on

strategy evaluation in the lectures and assigned readings, you will design and propose

a strategy evaluation approach for your organization by following the steps below.

You should design the evaluation approach so that it measures the results you would

expect for the strategy to achieve from a balanced scorecard perspective.

Step 1: As your organization is implementing its strategy, how will it review the

progress being made against the plan?

What kind of periodic progress reviews should take place? What should be reviewed?

Who should be involved in the review(s), and how?

Describe the philosophy and objectives of the review process. How does it fit in with

the Acquire, Interpret, and Apply (using PDSA) approach to learning—focusing

specifically on the PDSA process?

Step 2: As your organization is implementing its strategy, how will it evaluate what is

occurring so that the root causes of the gaps between the plan and the actions and

results are identified?

Bossidy and Charan (2002) note: “The strategy by itself is not often the cause [of

failure]. Strategies most often fail because they aren’t executed well” (p. 15). If things

are not going well, how will you determine if the root cause lies with the execution or

with the strategy itself? What criteria would be used to guide you in this evaluation?

What structures, policies, personnel, and processes should be put in place to

anticipate, prevent, or fix early some of the common causes of strategy

implementation failure? Try to be as specific as you can about which common causes

you will anticipate and the approach you will take to prevent or quickly fix them.

Step 3: As your organization is implementing its strategy, what management controls

will be needed, and how will they be executed, so that necessary adjustments are

made to move the organization closer to the strategy?

Step 4: As your organization is implementing its strategy, some things are bound to go

wrong. Strategy implementation may fail because of any of a myriad of external and

internal changes that were not foreseen.

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What might be some of the problems your strategy implementation could face?

Briefly describe a contingency plan for some of these.

Step 5: The key to strategy implementation often comes down to the mental models,

attitudes, feelings, and behaviors of the people in your organization. The mental

models of both individuals, and entire groups within the organization, matter.

How will you go about getting the people and critical groups in your organization

committed to successful implementation?

What will you do to minimize or eliminate the resistance to the change that the new

strategy will bring?

How will you employ the philosophy and management approaches of “appreciative

inquiry” in your evaluation of your people and their performance? How will you

consciously and purposefully use appreciative inquiry to create Pygmalion effects in

the organization?

What new enabling structures, organizational culture traits, and communication

habits should be developed to ensure successful implementation of the new strategy?

Be specific in your list and description of these. Try to give a brief explanation for how

you would put these things in place within the organization.

Step 6: Does your organization use the balanced scorecard approach to measure and

evaluate its strategy and its implementation?

If not, how could a balanced scorecard approach be adopted in this organization?

Step 7: Can your organization legitimately be called a “learning organization”? What

are some indicators that it is a learning organization?

If not, how can it begin the journey of focusing upon developing individual and

organizational learning-by-doing skills?

Case Write-Up Sift through the observations you made, the information you obtained, the notes you

made. However basic your ideas here, or simple the process you are contemplating,

make sure that it is centered on feedback loops that comprise reinforcing feedback

systems of review, control, and reformulation and implementation.

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Write your 2–3-page draft that summarizes the plan you believe your organization

should use to review, evaluate, and control the strategies you are recommending.

Save this 2–3-page draft into the Strategic Living Case Study Template under the

appropriate heading. You will revise it from time to time as you continue your study,

encounter additional information on this session’s topic, and gain richer

understandings of the information you collected in this session. At the end of your

study, you will do a final revision of this material and integrate it seamlessly into your

final Strategic Living Case Study on this organization.

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STRATEGY EVALUATION II Management Control Systems, Corporate Governance, Ethics and Forms of CSR, and Organizational Change.

One of the keys to long-term organizational success is the attention given to designing

and maintaining effective management control systems so that the deliberate or

intended strategies of an organization are implemented successfully and so that

valuable emergent strategies are facilitated by innovating management systems. The

management control systems “keep score” on how well the organization is

performing, where the organization can build upon successes, and where it can make

improvements when efforts are less successful than expected.

Management Control Systems

Last week, you looked at some of the management control systems your organization

uses to measure and improve its implementation of its strategies, e.g., 1) the

organization’s design and use of real-time dashboards and other organizational

feedback systems, 2) its commitment to the philosophy and practice of affirmative

inquiry and its efforts to create individual and organization Pygmalion Effects, 3) its

effective use of the balanced scorecard approach to measuring performance, and 4)

its success in cultivating a “learning organization” culture.

Peter Scholtes (1998) argues that the 21st Century manager should be less the “boss”

giving orders and more the architect who designs and manages the systems (structure)

in which employees work and in which they self-lead and self-manage themselves. This

should include the management control systems (evaluation systems) that employees

use to get frequent, and perhaps even real-time, feedback on their individual

performance and that of their teams, departments, units, companies, divisions, etc.,

and that executives use for strategy evaluation purposes.

Lawrence Hrebiniak (2013) says that many top executives unwisely focus their

attention on strategy formulation and ineffectively delegate strategy implementation

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and its ongoing evaluation to middle managers. He argues that top executives should

focus equally upon all three stages of strategic management and ensure that strategy

implementation and strategy evaluation are effective. Top executives are responsible

for the management control systems that evaluate how successfully strategies are

implemented and the degree to which their intended effects are realized or not.

Corporate Governance

Most organizations are governed by a board of directors, a board of members or

partners, a board of trustees, etc. This entity has a different function than the leaders

and managers of the organization. Their role is to represent the shareholders (and to

some extent other stakeholders) of the organization and to look after their interests.

They hold the executives of the organization, indeed all the leaders and managers,

accountable for the results of the organization.

In doing this, they must seek to minimize the agency problems that arise with leaders

and managers. The agency problem arises when leaders and managers act in their own

interest instead of the best interest of the organization. Many examples can be given

of legal, ethical, and financial disasters caused by leaders and managers pursuing

selfish interests. In the 1990s a number of corporate scandals of this type caused the

U.S. Government to pass the Sarbanes-Oxley Act in 2002 that dramatically reformed

the rules and responsibilities under which public corporations’ boards and executives

must operate.

Corporate Ethics and Social Responsibility

In recent decades, many activist individuals and organizations representing a wide

range of philosophies and political, social, and economic agendas have worked to

pressure businesses to adopt strategic goals beyond making profits for their owners or

shareholders. Corporate Social Responsibility (CSR) has been a been an umbrella term

for these calls to change.

The benign form of CSR simply sought for businesses to be good citizens of society, just

as individuals should be expected to be, and to strive to “do well by doing good,” i.e.,

to do well in business in ways that also involved doing good or changing the world for

the better. The malignant form of CSR sometimes sought to co-opt businesses to serve

the political, economic, social, and environmental agendas of various activists.

The eminent University of Chicago economist, Milton Friedman, argued strongly

against CSR. He said that the “in a free society, and have said that in such a society,

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‘there is one and only one social responsibility of business—to use its resources and

engage in activities designed to increase its profits so long as it stays within the rules

of the game, which is to say, engages in open and free competition without deception

or fraud.’” See a short version of his famous NYT article: A Friedman doctrine‐- The

Social Responsibility of Business Is to Increase Its Profits - The New York Times

(nytimes.com).

In recent years, other approaches to corporations’ contributions to society have

been proposed. For example, the Harvard Business School strategic management

thought leader, Michael Porter, developed a contrasting concept, CSV (Creating

Shared Value) to CSR (Corporate Social Responsibility). He believes this approach

is more consistent with free market capitalism than CSR. See Creating Shared Value.

Another approach that has come to dominate many organizations is DEI (Diversity,

Equity, and Inclusion). This approach can be positive or negative depending upon how

the terms are defined and how the approach is practiced. The Supreme Court has

begun to issue rulings against components of DEI practice like affirmative action.

Corporations and other types of organizations too are beginning to think beyond DEI

to better ways to lead and manage people and organizations. See 7 Ways Your DEI

Initiatives Are Harming Your Company and How To Resolve It. | LinkedIn

Yet another approach that has come to drive many organizations through the

influence of large institutional investors on corporations is ESG (Environment, Social,

and Governance). This approach can be positive or negative depending upon how the

terms are defined and how the approach is practiced. ESG practices have created some

serious critiques and highly visible controversies for corporations recently. Note the

Bud Light commercial controversy that devastated the beer brand. An insightful short

article on the negative impact of ESG practices on companies can be found here: Happy

birthday, Adam Smith: The invisible hand just slapped Disney | The Hill. For a positive

view of ESG see this article for a supportive argument for the approach: ESG is

essential for companies to maintain their social license | McKinsey.

Organizational Change

Using the tools of good management control systems and good corporate governance

practices, the organization should evaluate the quality of its strategies and how well

they are implemented so the organization can learn, improve, and change for the

better. This highlights the ultimate goal of strategy evaluation, i.e., to lead and manage

positive and continuous individual and organizational change.

https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html

https://youtu.be/xuG-1wYHOjY?si=8-WGNcLQlH1DKaNv

https://www.linkedin.com/pulse/7-ways-dei-harming-your-company-how-resolve-brian-dapelo/

https://thehill.com/opinion/finance/4326247-happy-birthday-adam-smith-the-invisible-hand-just-slapped-disney/

https://www.mckinsey.com/capabilities/sustainability/our-insights/does-esg-really-matter-and-why

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When we consider the teleology and trajectory of continuous organizational change,

we should consider the individual and organizational ethics that guide our journey.

Fastidious legal and regulatory compliance, sound ethical commitments, and

consistent moral actions of integrity reduce our troubles and losses today, but more

importantly, they guide us on a better, more successful path into the future. There is

a moral order or government to the universe whether we acknowledge it or not. Those

individuals and organizations that live and work in accordance with this moral order

will prosper in most every way more than those who do not.

Reflection: Managing the Strategy After studying the materials presented to you on strategy evaluation in the lectures

and assigned readings in the course, consider further how well your case study

organization is using good management control systems, corporate governance, and

organizational ethics in its strategy evaluation process.

Step 1: Review your study of your organization thus far. What management control

systems seem to be in place to evaluate the effectiveness of strategies and their

implementation?

To what extent do the management control systems seem to foster employee self-

leadership and self-management in real time?

Do the management control systems appear to foster the philosophy of appreciative

inquiry, or do they focus upon identifying and solving problems?

Step 2: What kind of governing board does your organization have? Is it mostly

comprised of inside directors or outside directors? What other stakeholders are

represented on the board? Is the CEO also the Chairman or is this role split.

From news articles and analyst reports about the corporation, do you perceive that

the board is highly responsible in corporate governance or less so?

Step 3: What is your organization’s record on corporate or financial scandals, legal

problems, lawsuits, compliance issues, negative news reports on ethical or corporate

social issues?

What is the organization’s reputation as a good “corporate citizen”?

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Step 4: What objective evidence do you have about the philosophies and practices the

organization has adopted regarding its relations with external systems, viz., its

approach to CSR, CSV, DEI, ESG, etc.

Step 5: Give some examples of how your organization has used good management

control systems and corporate governance to bring about positive organizational

learning and change over time.