strategic management case study

· Deliberate and emergent strategy development

· Deliberate strategy

Deliberate strategy involves intentional formulation or planning.

Deliberate strategy can come about through:

· Strategic leaders

· Strategic planning mechanisms

· External imposition

· Strategic planning systems

Strategic planning takes the form of systematic analysis and exploration to develop an organisation’s strategy.

But is it this straight forward?

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· Stages of strategic planning

· The role of strategic planning

Strategic planning may play several roles:

· Formulating strategy : a means by which managers can understand strategic issues and decide future strategy

· Learning : a means of questioning and challenging current strategy and future strategic options

· Integration : co-ordinating business-level strategies within an overall corporate strategy

· Communicating intended strategy and providing strategic milestones.

· Externally imposed strategy

Strategies may be imposed by powerful external stakeholder:

· Government - public sector (e.g. schools).

· Government - regulated industries (e.g. public utilities).

· Multinational companies - host governments

· Business units may have their strategy imposed by head office (e.g. part of a global strategy).

· Venture capital firms may impose strategy on companies they buy into.

· Emergent strategy

An emergent strategy : Strategy is not a ‘grand plan’ but a developing pattern in a stream of decisions.

Top managers draw together emerging themes of strategy from lower down the organisation rather than direct strategy from the top.

· Emergent strategy development processes

· Logical incrementalism

Logical incrementalism - the development of strategy by:

· experimentation and learning

· partial commitments rather than through global formulations of total strategies

· Strategic direction from prior decisions

· Implications for managing strategy development

· Multiple strategy development processes –

· There is no one right way!

· The context can be important

· Need to adopt flexibility

· Understand dynamics at different organizational levels

· Organisational configurations

· Structures and systems

· Structures give people formally defined roles, responsibilities and lines of reporting. The structure is like the skeleton of an organisation and creates its basic framework.

· Systems support and control people as they carry out structurally defined roles and responsibilities. Systems are like the muscles of an organisation that provide movement and coherence.

· Structural types

· The functional structure

The functional structure divides responsibilities according to the organisation’s primary specialist roles such as production, research and sales.

· Functional structure

Advantages

· Chief executive in touch with all operations

· Reduces/simplifies control mechanisms

· Clear definition of responsibilities

· Specialists at senior and middle management levels.

Disadvantages

· Senior managers overburdened with routine matters

· Senior managers neglect strategic issues

· Difficult to cope with diversity

· Coordination between functions is difficult

· Failure to adapt

· Multidivisional structure

The multidivisional structure is built up of separate divisions on the basis of products, services or geographical areas.

· Multidivisional structure

· The matrix structure

The matrix structure combines different structural dimensions simultaneously, for example product divisions and geographical territories or product divisions and functional specialisms.

· Matrix structures

Advantages

· Integrated knowledge

· Flexible

· Allows for dual dimensions

Disadvantages

· Length of time to take decisions

· Unclear job and task responsibilities

· Unclear cost and profit responsibilities

· High degrees of conflict

· Transnational structures

The transnational structure combines local responsiveness with high global coordination.

Key advantages include:

· Knowledge-sharing

· Specialisation

· Network management.

· Project-based structures

A project-based structure is one where teams are created, undertake the work (e.g. internal or external contracts) and are then dissolved.