Module 14: Trends in Strategic Management: Concluding Thoughts
Fmm2020
SEU_MGT510_Module14_PPT_Ch15.ppt*
CONTEMPORARY STRATEGY ANALYSIS
tenth edition
Robert M. Grant
John Wiley & Sons Ltd., 2019
Chapter 15
Current Trends in
Strategic Management
The New Environment of Business
New Directions in Strategic Thinking
Redesigning Organizations
The Changing Role of Managers
Current Trends in
Strategic Management
Copyright © 2019 John Wiley & Sons, Inc.
OUTLINE
The Turbulent 21st Century
2000: Collapse of “New Economy”
- Dot.com bubble bursts
- March 2000 NASDAQ
at all-time peak
Terrorism
- Attacks of September 11, 2001
- Invasion of Afghanistan
& Iraq
Volatile Markets
E.g. Brent crude June ’09 $148; Dec. ‘09 $38
Decline of US
world influence
--emergence of a
multi-polar world
Globalization reverses
The rise of economic nationalism
2008-9:
Financial crisis
The Third Industrial Revolution:
- Digital technologies
- Intelligent systems
- Disintermediation of human beings
Demands of society
- Social & environmental responsibility
- Ethics & fairness
- Quest for meaning
Natural Disasters
Hurricanes, earthquakes, fires
2011:
Arab Spring
THE NEW ENVIRONMENT OF BUSINESS
Copyright © 2019 John Wiley & Sons, Inc.
The New Politics
- The decline of liberalism
- The rise of demogogues
- The politics of identity
Digital Technology
- Destruction of industries: travel agencies, bookstores, broadcast TV
- Rise of new industries: e-commerce, ride-share services, audio & video streaming, shared ownership,
- Transformation of industries: financial services, communications, dating
Social Forces and the Crisis of Capitalism
- Twin pillars of Western civilization—liberal democracy & market capitalism—undermined by inequality, intolerance, decline of rationalism
Competition
- Rise of dominant firms: in mature sectors (A-B Inbev, Starbucks, Boeing, Walmart; in new industries (Alphabet, Apple, Alibaba, Amazon, Facebook, Tencent)
- New competitors from emerging markets (Huawei, Haier, Infosys, Embraer)
Systemic Risk
- In interconnected world,initiasl disturbances are amplified and transmitted: e.g. Financial crisis of 2008-9, Arab Spring, Islamic State
Forces Shaping the Business Environment
THE NEW ENVIRONMENT OF BUSINESS
Copyright © 2019 John Wiley & Sons, Inc.
Ratio of average CEO compensation to
that of the average worker, USA 1965-2016
THE NEW ENVIRONMENT OF BUSINESS
Chart1
| 1965 |
| 1970 |
| 1975 |
| 1980 |
| 1985 |
| 1990 |
| 1995 |
| 2000 |
| 2005 |
| 2010 |
| 2015 |
| 2016 |
Sheet1
| Ratio of CEO pay to that of average worker | |
| 1965 | 20 |
| 1970 | 22 |
| 1975 | 25 |
| 1980 | 32 |
| 1985 | 51 |
| 1990 | 62 |
| 1995 | 123 |
| 2000 | 384 |
| 2005 | 335 |
| 2010 | 278 |
| 2015 | 286 |
| 2016 | 271 |
NEW DIRECTIONS IN STRATEGIC THINKING
Managing Options
- Turbulence increases option values
- Strategies to create options: lower
financial leverage, experimentation,
exploratory R&D, alliances,
product platforms
Seeking
More Complex Sources
of Competitive Advantage
- Multiple layers of competitive advantage
- Exploiting cross-business linkages
- Emphasis on innovation and new
business development
Understanding
Strategic Fit
- Complementarity of management
practices
- The implications of complexity
- Contextuality of linkages
Reorienting
Corporate Objectives
- Emphasis on stakeholder goals
and societal role of firms
- Focus on profit drivers rather
than stock market valuation
Rethinking Strategy
© 2019 Robert M. Grant
www.contemporarystrategyanalysis.com
Strategy
in a Digital World
- See next slide
4
4
The strategic characteristics of digital industries
Industry
structure
Importance of
complementary products
Network externalities
Complex industry
Structures (“ecosystems”)
Potential for complex and innovative business models
Competitive
advantage
Fast cycle innovation and product development
Swift erosion of competitive advantage (unless supported by network dominance)—hence need for speed
Ease of imitation of successful strategies
Critical importance of timing: strategic windows of short duration
Platform competition and winner-take-all markets)
Strategic characteristics
Strategy implications
Fungibility of IT resources
Ease of diversification between technology-based industries
NEW DIRECTIONS IN STRATEGIC THINKING
Copyright © 2019 John Wiley & Sons, Inc.
The New Environment of Business
Multidimensional
structures
Informal
organization
REDESIGNING ORGANIZATIONS
The Emerging Shape of the Business Enterprise
New Directions in Strategic Thinking
Self-
organization
Permeable
Boundaries
Copyright © 2019 John Wiley & Sons, Inc.
4
4
THE REQUIRED
COMPETENCIES OF
BUSINESS LEADERS
- motivating colleagues
- cultivating sense of purpose
- cross-cultural flexibility
- self-awareness
- resolve
- proactivity
- problem-solving
- relationship building
- vision
THE LEADERSHIP
NEEDS OF
ORGANIZATIONS
The ability to:
build confidence
build enthusiasm
cooperate
deliver results
form networks
influence others
use information
New Models of Leadership
Copyright © 2019 John Wiley & Sons, Inc.
THE CHANGING ROLEOF MANAGERS
