Strategic Recommendations
amhs2000
strategy_modules.pdf
Strategy Planning
Module 1: Concepts of Strategy
Module Introduction
Readings
Required
Chapter 1 in Foundations of Strategy Chapter 1 PowerPoint slides in Foundations of Strategy (media/SEU_MGT510_PPT_CH01_module01.ppt) Bloodgood, J. (2014, January). Enhancing the resourcebased view of the firm: Increasing the role of awareness. Strategic Management Review, 8(1), 6175. Retrieved from http://www.strategicmanagementreview.com/doi/full/10.4128/193045608.1.61 (http://www.strategicmanagementreview.com/doi/full/10.4128/193045608.1.61) Dinwoodie, D. L., Quinn, L., & McGuire, J. B. (2014). Bridging the strategy/performance gap: How leadership strategy drives business results. Retrieved from http://insights.ccl.org/wp content/uploads/2015/04/BridgingTheStrategy.pdf (http://insights.ccl.org/wp content/uploads/2015/04/BridgingTheStrategy.pdf)
Recommended
Ansoff, H. I. (1991). Critique of Henry Mintzberg's 'The design school: Reconsidering the basic premises of strategic management.' (https://csuglobal.idm.oclc.org/login? auth=seu&url=https://searchebscohostcom.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=12571660&site=ehostlive) Strategic Management Journal, 12(6), 449461.
For Your Success
History shows us how concepts, terms, and principles have changed over time. By studying history, we learn to avoid using analytic or decisionmaking processes that have been proven faulty. We learn to embrace aspects that are relevant to our company or organization and to dismiss those that are irrelevant. In this module, students are advised to compare the definitions of terms that will be used throughout the course. Further, students should determine which definitions best fit for individual situations. There is no “one” use of a term that every scholar must embrace; think
individual situations. There is no “one” use of a term that every scholar must embrace; think critically and define terms that work for you.
As noted in the module overview, an important principle of this course is the emphasis on implementation of successful strategies. Therefore, students are advised to study each module thoroughly, with an eye toward how strategy implementation may be effected. Students should also note the textbook author’s attention to analysis, as necessary, to make informed strategy decisions.
Remember that participation in the discussion board and completion of the graded quizzes are required and due by 11:59 p.m. on Saturday night. Be sure to familiarize yourself with the schedule for Critical Thinking Assignments to note when they are due and in which modules. As part of that, examine the corresponding grading rubrics to ensure you understand exactly how you will be scored.
This week you will participate in an introductory discussion, complete a graded Discussion Board question, and read the required materials from your textbook and the accompanying PowerPoint slides. Remember, the primary graded Discussion Question must be posted by 11:59 p.m. KSA on Wednesday for full credit; the additional postings must be posted by 11:59 p.m. KSA on Saturday.
There will also be a Live Session this week. Your faculty will provide further details about this event.
Learning Outcomes
1. Explain the evolution of strategy and compare original and current theories and concepts. 2. Identify and diagram the various levels of strategy in a realworld situation. 3. Apply the basic framework for strategy analysis to a specific organization.
1. A Brief History of Strategy
Most often, students of management and leadership discuss strategy as it relates to business cases such as Southwest Airlines, Starbucks, IKEA, and Amazon; or, as it applies to notforprofit, examples such as the World Wildlife Fund, the American Red Cross, or UNICEF.
examples such as the World Wildlife Fund, the American Red Cross, or UNICEF.
Strategy is a term that can be traced back to the ancient Greeks, to whom stratēgos meant a chief magistrate or a military commanderinchief. However, the strategic management discipline, which draws from earlier thinking and texts on strategy, originated in the 1950s and 1960s. Prior to 1960, the term strategy was primarily used regarding war and politics, not business (Gavetti & Rivkin, 2007). Whether it’s on a battlefield or in boardroom discussions, there remains a strong thread in both language and purpose: Strategy is about success.
Origin of “Strategy”
In 1934, Professor G.F. Gause of Moscow University published the results of a set of experiments in which he put two very small animals (protozoans) of the same genus in a bottle with an adequate supply of food. If the animals were of different species, they could survive and coexist together. If they were of the same species, they could not. This observation led to Gause’s Principle of Competitive Exclusion: No two species can coexist that make their living in the identical way.
In his highly regarded article on the origin of strategy, Henderson (1989)—using Gause’s experiment as a backdrop—deduced that business and biological competition would follow the same pattern of competition and gradual evolutionary change except for one thing: Business strategists can use their imagination and ability to reason logically to accelerate the effects of competition and the rate of change. In other words, imagination and logic make strategy possible. Henderson (1989) also noted that strategy requires the ability to understand the complex web of natural competition.
In the next sections, we examine three key strategy concepts.
(Source: http://www.ggause.com/gausbio.htm) MGT510Table of Contents Tools
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In the next sections, we examine three key strategy concepts.
Strategy Concept I: A strategy is not a tactic and a tactic is not a strategy.
The way to think about the difference between these two essential elements is:
1. Strategies are overall plans or visions chosen to deploy resources in the right place at the right time. Strategy—when done right—eliminates the destruction of the entire, interdependent system. The word strategy is derived from the Greek term stratēgos and, as the illustration below depicts, it was not until the early part of the 19th century that the word strategy and the linkage to organizational success came into common use. You can see from the illustration that the origins of the word strategy reinforce its initial application to military events. The major underpinnings were planning, directing, controlling, and leading in the war environment. Leaders and warriors needed knowledge of topography, supply lines, and troop locations if strategy was to be effective.
2. Tactics (http://www.businessdictionary.com/definition/tactics.html) are specific activities or actions to be completed at specific points in time.
Strategy Concept II: Strategy is developed from the basic premise of environmental analysis.
Understanding the external and internal environments of an organization is thought to be central to choosing a strategy that can lead to success. There are differing opinions, however, as to whether the
(Source: Origin of the Word Strategy, adapted fro
m Google, n.d., para. 1)
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choosing a strategy that can lead to success. There are differing opinions, however, as to whether the external or the internal environmental factors are more important when developing a strategy.
Note: Grant and Jordan (2015), the authors of Foundations of Strategy, purport that a keen awareness of the competitive environment is essential to building an effective strategy. And further, the authors suggest that internal analysis is critical as well. There are numerous opportunities throughout this course to conduct analysis and consider its impact on strategy decision making.
To fully understand how the relevance of strategy has evolved in a highly complex, global economy, it is instructive to be familiar with a few scholars who have designed and tested theories over the last 60plus years. Below is a table displaying the currentera strategy schools of thought (McKiernan, 2006). Theorists are most often associated with one of these schools of thought.
CurrentEra Strategy Schools of Thought
Planning Learning
Positioning ResourceBased
Continuing Evolution
Click on the tabs below to learn more about the theories of each of these scholars.
H. I. Ansoff
Often referred to as the father of strategic management, Ansoff introduced a strategy matrix in the Harvard Business Review (HBR) that is still used throughout the world. Ansoff introduced new language and is credited with coining the term strategic management, as well as continuing work in environmental turbulence and realtime strategy adaptation for more than 50 years. Ansoff is considered part of the planning school of thought and is quoted as saying:
The key to strategy is recognizing that if a company is functioning, it is part of the environment… when a manager understands the environment and recognizing that the environment is constantly changing, then the manager can make the correct decisions in leading the organization into the future. (Strategic Change, 2002, p. 438)
K. Andrews
Andrews is another key contributor to the planning school of thought and to the development of strategy thinking. Known as the cofounder of corporate strategy (Wheelwright, 2005), Andrews helped to redesign the Harvard Business Review and served as its publisher from 1979 to 1985. Bringing theory and practical management together was a hallmark of Andrews, and HBR’s design was an example of that philosophy.
J. B. Quinn
As the environment became more turbulent through the 1970s, planning seemed to be more difficult and theorists lamented the unpredictability in a planning process (McKiernan, 2006). Questions about rational, analytic decision making increased. In the 1980s, J. B. Quinn, from Dartmouth, introduced the concept of taking an incremental approach to strategic change (Quinn, 1980). Quinn, thought of as representing the learning school, suggested that combining the analytical and behavioral aspects of strategy planning created a more practical and useful (and ultimately successful) approach to meeting corporate goals. Also, M. Hatch (1993) was a leader in describing how an environment gets interpreted and then impacts the internal culture of an organization.
H. Mintzberg
H. Mintzberg (1978) of Gill University, known as a management guru today, held the position that strategy is the development of a set of guidelines that shape future decision making. In the early 1990s, Mintzberg and Ansoff published opposing points of view regarding strategy thought that undoubtedly challenged many theorists to review their positions. Those articles, linked below and listed as recommended reading for this module, are worth reading for content and also to gain a better understanding of the scholars’ dedication to the field of strategy.
M. Porter
Porter, who is well known among graduate students and organizational leaders alike,
Porter, who is well known among graduate students and organizational leaders alike, contributed to the advancement of strategy formulation by developing a tool used in analyzing the external environment (McKiernan, 2006). Porter’s tool was widely accepted by managers and MBA programs because of its practicality and ease of use; the practical approach is a renewal of Andrew’s philosophy of bringing theory and practical management together. Porter is recognized as being of the positioning school of thought.
B. Wernerfelt
In the late 1990s and early 2000s, strategy scholars more intensely questioned why one firm is more successful than another given like strategies and environments (Madhok, 2002). Wernerfelt (1984) explained that a ResourcedBased View (RBV) of a firm is built on the analysis of available resources rather than products. RBV was discussed and debated by Priem and Butler (2001) and represented a considerable shift in thinking from emphasis on external factors to internal resources and capabilities. They also questioned whether RBV held enough substance, at that point in time, to be considered a theory.
Current contributors
Finally, the most current contributions to the advancement of strategy thinking are coming from scholars who advocate for more consumer influence on strategy, which is again a shift to include additional external components into strategy development and decision making (Priem, Butler, & Li, 2013). As in any field, many scholars and theorists contribute to a body of work and will continue to influence the quest for success.
Strategy Concept III: Strategy is a set of guidelines intended to be used to guide strategy decision making.
No matter which school of thought a strategist embraces, a commonality is that strategy is a set of guidelines intended to be used to guide strategy decision making. Within this concept is an assumption that shared strategy serves to coordinate activity within an organization toward a specific goal or target.
(Source: Grant & Jordan, 2015b, slide 8)
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Check Your Understanding
Drag and drop the items on the right to the correct name they modify on the left.
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2. “Roles” of Strategy
The evolution of strategy over the past century provides a better understanding of why and how strategy is used today. Figure 1.2 from the Grant and Jordan textbook illustrates that strategy has evolved from “strategy as a detailed plan” into “strategy as direction,” which is consistent with the history and theory discussion on Page I in this module. Review the graphic below to reinforce those influences that affected this evolution:
For purposes of this course, four “levels” of strategy are identified to provide structure and clarity to the discussion of strategy design and implementation. The four levels are:
Corporate Strategy Business Strategy Unit Strategy Functional Strategy
Differentiation between corporate and business strategy is important in that each is essential and each is typically determined by leaders at different levels within an organization. Review the graphic below that provides an illustration of the purpose of corporate and business strategy.
Review the purpose of corporate and business strategy, and the explanation of the strategy levels and how they are aligned within an organization. Below is the depiction of an organizational structure with attendant strategy levels. It is vital to comprehend the roles that each level plays in aligning and carrying out corporate strategy.
(Source: Grant & Jordan, 2015, p. 10.)
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(Source: Grant & Jordan, 2015, p. 12.)
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Point 1 Point 2
Generally, corporate strategy is determined by the senior executive team of a medium to large organization and is in alignment with the vision and mission of the firm. Business strategy, therefore, is most often decided upon by senior managers of divisional business units in alignment with corporate strategy.
Depending on the structure of an organization, the divisional business units might represent, for example, products or geographies. Subunits within the divisions have a responsibility to develop strategy that can be carried out within their realm of resources and authority.
For purposes of this discussion, the organizational structure graphic illustrates the crossfunctional view of Information Technology (IT), Human Resources (HR), and other strategies that impact the business. Senior teams in IT and HR may play a leadership role in developing strategies specific to their expertise, or they may play a support role and design strategies that simply support the business strategies. Sometimes, these functional experts play both roles—leadership and support— to best ensure effective strategy implementation.
From the graphic above, note two important points that are as follows:
All strategies are in alignment with the vision and mission of the organization and with strategy throughout the organization.
To further expand the thinking of corporate strategy and business strategy, view the following video. In the video, Donald Sull, London Business School professor, poses three questions to break down complex strategies into actionable steps: Simplify Your Strategy (https://hbr.org/2012/08/simplifyyourstrategy/).
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3. The Basic Framework for Strategy Analysis
To bring together concepts, history, language, and levels of strategy, a basic framework for strategy analysis is a helpful tool. See the framework below that is used throughout MGT510.
This framework illustrates the intersection between the organizational environment and the industry environment in the form of a chosen strategy. Grant and Jordan (2015) suggest that this framework depicts a strategic fit between the internal and external environments of an organization.
(Source: Grant & Jordan, 2015, p. 27)
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Check Your Understanding
References
Ansoff, H. I. (1957). Strategies for diversification. Harvard Business Review, 25(5), 113125.
Hatch, M. (1993). The dynamics of organizational culture. Academy of Management Review,
18(4), 657693.
Gavetti, G., & Rivkin, J. W. (2007). On the origin of strategy: Action and cognition over time.
Organization Science, 18(3), 420439.
Google. (n.d.). Strat*e*gy. Retrieved from
https://www.google.com/#q=origin+of+the+word+strategy
Grant, R. M. & Jordan J. (2015). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley &
Sons.
Henderson, B. D. (1989). The origin of strategy. Harvard Business Review, 67(6), 139143.
Igor Ansoff, the father of strategic management. (2002). Strategic Change, 11(8), 437438.
Madhok, A. (2002). Reassessing the fundamentals and beyond: Ronald Coase, the transaction
cost and resourcebased theories of the firm and the institutional structure of production.
Strategic Management Journal, 23(6), 535.
McKiernan, P. (2006). Exploring environmental context within the history of strategic
management. International Studies Of Management & Organization, 36(3), 721.
Mintzberg, H. (1978). Patterns in strategy formation. Management Science, 24(9), 934948.
Priem, R. L., & Butler, J. E. (2001). Is the resourcebased “view” a useful perspective for strategic
management research? Academy of Management Review, 26(1), 2240.
Priem, R. L., Butler, J. E., & LI, S. (2013). Toward reimagining strategy research: Retrospection
and prospection on the 2011 AMR Decade Award article. Academy of Management
Review, 38(4), 471489.
Quinn, J. B. (1980). An incremental approach to strategic change. McKinsey Quarterly, (1), 34
52.
Wernerfelt, B. (1984). A resourcebased view of the firm. Strategic Management Journal, 5(2),
171180.
Wheelwright, S. C. (2005, November). Kenneth R. Andrews (19162005). Harvard Business
Review, 83(11), 160.
Strategy Planning
Module 2: Industry Analysis and Strategy, Part 1
Module Introduction
Readings
Required
Chapter 2 in Foundations of Strategy Chapter 2 PowerPoint slides (media/SEU_MGT510_PPT_CH02_module02.ppt) in Foundations of Strategy Krzyzanowska, M., & Tkaczyk, J. (2012). Competitive landscape of the educational market: A managerial perspective (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=89544287&site=ehostlive). International Journal of Management Cases, 14(4), 238251. Porter, M. (2008). The five competitive forces that shape strategy. Retrieved from https://hbr.org/2008/01/thefivecompetitiveforcesthatshapestrategy (https://hbr.org/2008/01/thefivecompetitiveforcesthatshapestrategy)
Recommended
Chatain, O., & Zemsky, P. (2015). Discovering value in buyersupplier relationships. Strategic Management Journal, 32(1), 76102. doi:10.1002/smj.864. Retrieved from https://apps.olin.wustl.edu/Conf/CRES/Strategy/files/pdf/2015/ST2015_57.pdf (https://apps.olin.wustl.edu/Conf/CRES/Strategy/files/pdf/2015/ST2015_57.pdf)
For Your Success
Industry analysis is the dynamic place where strategy planning begins. The multitude of environmental factors makes industry analysis very complex. You are encouraged to look for the many facets and then determine their interdependencies. In strategy planning, it is necessary to make assumptions based on a solid set of factual data. Be prepared to develop assumptions when interpreting and forecasting. Remember that assumptions are not opinions, but are thoughtful conclusions based on the available facts. Assumptions are not formulaic, and if you find yourself doubting what to do next, that is the time to consider whether making an assumption will allow you
doubting what to do next, that is the time to consider whether making an assumption will allow you to move forward!
This week, you must participate in the Discussion Board, join the Live Session hosted by your instructor, and complete the graded quiz. Be sure to finish all readings and view the PowerPoint slides that accompany the textbook. You are heartily encouraged to take advantage of the recommended readings as these will provide you with a deeper analysis and understanding of the theories and material.
Learning Outcomes
1. Discuss and summarize the importance of industry analysis. 2. Analyze an industry in relation to profit, competitive advantage, and attractiveness using a real
world example. 3. Compare frameworks used to analyze an organization’s external environment as it relates to
industry competition and profitability. 4. Assess the strength and practicality of industry analytic frameworks.
1. Industry Analysis: The Premise and Process
Industry analysis is built on the premise that some industries are more profitable than others. Industry profits, as explained by Grant and Jordan (2015a), are determined by three factors:
The value of the product to customers The intensity of competition The bargaining power of the producers relative to their suppliers
The table below provides examples of the profitability of a few industries as calculated by Return On Equity (ROE):
(Source: Grant & Jordan, 2015b, chap. 2, slide 3)
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Keep in mind that not all firms within a more profitable industry are highly successful, and some firms within industries having lower profitability may be highly profitable. An organization’s strategy can be more of a determinant to success than the industry itself. Thus, it is critical for companies to determine the industry’s potential for profit and then understand the external elements that may be key success factors in a firm’s ability to position and sustain itself over time.
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2. Industry Analysis: Tools and Models, Part 1
For companies to determine the potential for profit and understand those external elements requires extended analysis and calculation of data related to the competition, the customer, buyers, suppliers, and industry trends, according to Michael Porter’s Five Forces Model, which is also represented in the chart below.
Porter’s Five Forces Framework is one example of the many models and tools that have been developed to structure the study of an industry and competitive landscape. Watch the following interview with Michael Porter and make special note of descriptions as to how the model may be applied:
(Source: Grant & Jordan, 2015b, chap. 2, slide 13)
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(Source: https://www.youtube.com/watch?v=mYF2_FBCvXw )
The Five Competitive Forces That Shape Strategy
One important first step in industry analysis is defining the industry; however, students will note that there is no one definition for what an industry is. There is a tendency to “lump” organizations into an industry label, but defining an industry is much more multifaceted. Read the following scenario and consider the ramifications.
An interview with Michael E. Porter, Professor, Harvard University. Porter's five competitive forces framework is the basis for much of modern business strategy. Understand the framework and how to put it into practice.
Musab works for a fitness company in Jeddah, KSA. He has been asked by senior leadership to initiate an industry analysis to be used as part of a strategy planning process. It is apparent that there are some members of the senior leadership team who think about the industry in terms of state oftheart facilities, equipment, and fitness training, and do not consider older fitness clubs as competitors (for example, those that have been in existence for many years and may have older equipment and basic workout and shower areas). There are other senior leaders who group all fitness facilities under the health club industry label and consider new and old clubs to be competitors within the same market. In addition, some of the more luxurious hotels in town have opened up their exercise and spa facilities and services by offering club memberships.
To think more about Musab’s task, ponder the following questions:
Perhaps you know of, or have experienced, one or all of these types of
According to many academic and business leaders today, the idea that a strategy could be determined without calculating the competitive environment nearly ensures defeat. From small businesses to large conglomerates, from publicly held companies to small entrepreneurial organizations, the need for industry and external analysis is clear (Banham, 2010; Kimberlin, Schwartz, & Austin, 2011).
To be successful, an organization must understand the competition and the industry’s characteristics, and position the organization against rivals and the threats of new entrants, in association with suppliers and buyers. The most effective analysis uses numerical data rather than vague descriptions. Percentages, numerical comparisons, ratios, and numerical results are of high importance to objectively analyze the industry and market.
fitness facilities. Is the industry definition crystalclear to you as you compare and contrast your experiences? How should Musab go about defining the industry before proceeding to plan for the level and types of data to collect? Does the senior leadership team need to be aligned as to industry definition first, or might the industry analysis results help to create a common understanding among the team members?
Click on your answer below to see if you are correct.
Answer
There is not one right answer to each of the questions above.
If the answers to the questions seem unwieldy, then analysts make assumptions to ensure that the process can move forward. Once the boundaries of an industry and market are defined, we turn to the next steps of industry analysis.
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References
Banham, H. C. (2010). External environmental analysis for small and medium enterprises
(SMEs). Journal of Business & Economics Research, 8(10), 1926.
Grant, R. M., & Jordan J. (2015a). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley
& Sons.
Grant, R. M., & Jordan J. (2015b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ:
John Wiley & Sons.
Kimberlin, S. E., Schwartz, S. L., & Austin, M. J. (2011). Growth and resilience of pioneering
nonprofit human service organizations: A crosscase analysis of organizational histories.
Journal of EvidenceBased Social Work, 8(1/2), 428.
Strategy Planning
Module 3: Industry Analysis and Strategy, Part 2
Module Introduction
Readings
Required
Chapter 2 in Foundations of Strategy Chapter 2 PowerPoint slides (media/SEU_MGT510_PPT_CH02_module02.ppt) in Foundations of Strategy Yoffie, D. (2009, April 16). Cola wars continue: Coke and Pepsi in 2006. Retrieved from http://cvonline.uaeh.edu.mx/Cursos/Lic_virt/Mercadotecnia/DMKT008/Unidad%203/36_lec_Cola_Wars_Continue_coke_and_Pepsi_2006.pdf (http://cvonline.uaeh.edu.mx/Cursos/Lic_virt/Mercadotecnia/DMKT008/Unidad%203/36_lec_Cola_Wars_Continue_coke_and_Pepsi_2006.pdf)
For Your Success
Again, industry analysis is the dynamic place where strategy planning begins. Although the tools used in Modules 2 and 3 are simplistic, the interpretation of information is very complex. You will gain the best understanding of industry analysis by concentrating on applying the content to realworld situations. Think deeply and enjoy the discoveries!
Your first Critical Thinking Assignment is due this week. Review the assignment early in the week and contact your instructor if you have any questions or concerns.
Learning Outcomes
1. Discuss and summarize the importance of industry analysis. 2. Analyze an industry in relation to profit, competitive advantage, and attractiveness using a realworld example. 3. Compare frameworks used to analyze an organization’s external environment as it relates to industry competition and profitability. 4. Assess the strength and practicality of industry analytic frameworks.
1. Industry Analysis: Tools and Models, Part 2
One of the major challenges in conducting an external or industry analysis is the complexity of the environment and the vast amounts of data to consider. Environmental scanning tools (http://www.cpshr.us/WorkforcePlanning/documents/toolkitEnvScanSWOT.pdf)use an ordered approach to categorize data. For example, one analytical tool promotes the understanding of Political, Economic, Social, and Technological (PEST) factors. See the PEST example below and note especially the limited number of factors in each category:
Reducing the data to a small number of factors is reliant on identifying and prioritizing factors based on those most important to the industry and its future.
Another tool that strategists have found to be useful for summarizing and evaluating external information is the External Factor Evaluation (EFE) Matrix (media/SEU_MGT510_Mod03_ExternalFactorEvaluation.docx).
The EFE goes beyond the PEST factors of political, economic, social, and technological, and expands to include cultural, governmental, technological, environmental, and competitive information. Examine each of the elements below to see what you have to complete to use the EFE effectively.
(Source: Grant & Jordan, 2015b, chap. 2, slide 6)
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List of External Factors
A list of 15 to 20 external factors is given with percentages, statistics, ratios, and other numerical comparisons, as much as possible. The numbers of opportunities and threats do not need to be the same.
Weight
A “weight” based on the factor’s importance of being successful in the industry is assigned. Each weight is assigned from 0.0 (not important) to 1.0 (very important).
Note: The analyst is interpreting whether one opportunity is greater than another and whether a threat is more severe than any opportunity—the combinations are endless. The sum “weight” of all external factors is equal to 1.0. The weights are industrybased.
Rating
Each external factor is then assigned a rating between 1 and 4. The rating is based on how effectively the organization’s current strategy is responding to the opportunity or threat, or its potential to respond. Again, interpretation is highly subjective and necessary. Any factor may be given a 1, 2, 3, or 4.
Note: The ratings are companybased.
Weighted Score
By multiplying the weight and rate, a weighted score is determined. The highest weighted score would be 4.0, and the average weighted score would be 2.5.
Below is an example of an EFE matrix for a local 10theater cinema complex:
By studying the table above, the weighted score of 2.58 can be interpreted as better than the industry average. That is an indication of the theater complex’s position in the industry. Note that the most important factor according to the weighted score is #8, which is the threat of a trend toward healthy eating eroding concession sales (.048 weighted score).
(Source: David, 2012, p. 81)
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2. Apply EFE Matrix
Look closely at the EFE Matrix on Page 1 to see if you can interpret the information to answer the following questions.
Click on each question for the answer:
Which factor indicates that the company has capitalized well on the opportunity?
The answer is #2: TDB University is expanding 6% annually. This is indicated by a .08 weighting (industry) and 4 rating (effectiveness of the strategy).
Which factor, although a major threat, is being wellmanaged?
The answer is #8: Trend toward healthy eating eroding concession sales. This is indicated by a 0.12 weighting (industry) and 4 rating (effectiveness to handle the threat).
What strong opportunity is not being aggressively acted upon?
The answer is #5: Two new neighborhoods being developed within 3 miles. This is indicated by a. 09 weighting (industry) and a 1 rating (response to the opportunity).
As previously stated, there are many models and tools available to help structure the industry analysis. Analytic tools such as the Five Forces Model, PEST, or EFE matrix are helpful, but critics worry that they may also promote the notion that the activity is uncomplicated. As noted throughout, critical thinking and interpretation are required if the data are to be useful, no matter what tool or structure is used.
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Check Your Understanding
References
David, F. (2012). Strategic management: A competitive advantage approach (14th ed.). New York, NY: Prentice Hall.
Grant, R. M., & Jordan J. (2015a). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley & Sons.
Grant, R. M., & Jordan J. (2015b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ: John Wiley & Sons.
Strategy Planning
Module 4: Organizational Analysis and Strategy: Resources and Capabilities, Part 1
Module Introduction
Readings
Required
Chapter 3 in Foundations of Strategy Chapter 3 PowerPoint slides (media/SEU_MGT510_PPT_CH03_module04.ppt) in Foundations of Strategy Barney, J.B. (1995). Looking inside for competitive advantage (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx?direct=true&db=bth&AN=9512032192&site=ehost live). Academy of Management Executive, 9(4), 4961. Zhouying, J., & Ying, B. (2011). Sustainable development and longterm strategic management. World Future Review, 2(2) 4969. Retrieved from http://graduateinstitute.ch/files/live/sites/iheid/files/sites/cies/shared/UNEP%20CIES%20WS/ ARTICLE_Jin_Sustainable_Dev_to%20Rick%20%2025Aug11.pdf (http://graduateinstitute.ch/files/live/sites/iheid/files/sites/cies/shared/UNEP%20CIES%20WS/ARTICLE_Jin_Sustainable_Dev_to%20Rick%20%2025Aug11.pdf)
Recommended
Parke, C. (2012). Preparation meets strategic planning (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=70046454&site=ehostlive). Industrial Engineer, 44(1), 4448.
For Your Success
Before launching into this week’s content, you are encouraged to review what was covered in the first three weeks of the course. Then—as this week’s reading, discussion, Live Session, and writing unfold—the integration of previous information with Module 4 content will be an excellent way to absorb this material.
This week, you must also participate in the Live Session hosted by your instructor, participate in the Discussion Board, and complete the graded quiz by 11:59 p.m. KSA on Saturday night.
Learning Outcomes
1. Identify and appraise the resources and capabilities of an organization. 2. Formulate strategies based on data from the analysis of a firm’s resources and capabilities. 3. Characterize an organization’s internal environment, and assess how the organization may exploit internal strengths and contend with
internal weaknesses. 4. Identify ways in which an organization may ensure alignment of internal resources and capabilities with its corporate strategy.
1. A ResourceBased View of Strategy
Reflect on the history and evolution of strategy covered in Module 1. Recall that schools of thought emerged over time, and one of those schools is the ResourceBased View (RBV) of strategy. Grant and Jordan (2015a) suggest that the ResourceBased View, placing emphasis on internal resources and capabilities, is a powerful approach to designing competitive strategies that are unique to a specific firm. Other experts go further to propose that internal resources are more important to sustaining competitive advantage than external factors. In truth, the external and internal environments are so interdependent that it is difficult to confirm if one has greater impact than the other.
1 2 3
To fully comprehend the scope of resources and capabilities within a firm, it is essential to define the related terms.
Grant and Jordan (2015a) use the categories of tangible resources, intangible resources, and human resources as a way to dissect the organization’s resources into manageable sets of data.
Now that the terms are defined and the concepts reviewed, examples and explanations of how internal capabilities and resources are tied to competitive advantage can be helpful. As you watch the following video, begin to formulate a list of terms or concepts that you will want to better understand at the end of this module and course. Refer to the list after watching the video, and then again at the end of the week to discover what you have learned and what remains to be studied:
Whether the internal or external environment is more critical to business success is debatable. As studied in Module 2, the external environment is examined to identify avenues of profitability. Studying the internal environment of a firm helps to create strategies to position resources and capabilities in pursuit of making profits. The figure below illustrates how these two elements—the external forces and internal resources and capabilities—come together so that decision makers can make wise strategy choices:
(Source: http://www.youtube.com/watch?v=KN81_oYl1s)
ResourceBased View of the Firm, originally put forward by Edith Penrose, but popularized and incorporated into Strategic Management literature by scholars like Rumelt, Hamel, and Prahalad and Jay Barney.
ResourceBased View of the Firm, by Jay Barney
(Source: Grant & Jordan, 2015b, chap. 3, slide 4)
Click to Enlarge
2. Internal Analysis: An Important Element and a Practical Tool, Part 1
Identifying an organization’s capabilities and resources is a fundamental step for conducting an internal analysis. In the framework displayed below, observe that recognizing and categorizing resources and capabilities serves as a baseline from which to build and interpret opportunities.
Take another look at the framework and notice how the steps toward full analysis move upward from #1 to #4. Much like the process used in analyzing the external environment, appraising both the industry and company in light of the base information is essential.
Check Your Understanding
Study the graphic above carefully and review what you have learned in previous modules. Then assess whether you understand the construct and depth of the model by answering the following questions.
What is the starting point of the external analysis?
Answer: The starting point of the external analysis is to identify the industry that you are in by knowing the customers, suppliers, and competitors.
What is included in the industry environment versus the general environment?
Answer: The industry environment includes customers, competitors, and suppliers. The general environment is diffuse, and the only areas of consequence are those that impact the industry environment.
What three factors determine the level of profit in an industry?
Answer: The level of profit in an industry is determined by the following three factors: the value of products to customers, the intensity of competition, and the relative bargaining power of producers and suppliers.
In a contestable market, does there always need to be actual competition to keep prices relatively low?
Answer: No, just the threat of competitors entering the market can affect pricing.
What are the differences between the terms resources and capabilities?
Answer: Resources are a firm’s productive assets; capabilities are what a firm can do.
What part of the model speaks to complex organizational capabilities that are difficult for a competitor to replicate?
Answer: The structure and systems of the organization are difficult for a competitor to replicate.
Why is it important to appraise a firm’s resources and capabilities?
Answer: It’s important to appraise a firm’s resources and capabilities to compare them with the competitor’s resources and capabilities.
(Source: Grant & Jordan, 2015b, chap. 3, slide 15)
Click to Enlarge
capabilities.
How are a firm’s values manifested?
Answer: A firm’s values are manifested through the culture of the organization.
How do resources impact the creation of capability?
Answer: Combining several resources may create capabilities that deliver superior profitability.
References
Barney, J.B. (1995). Looking inside for competitive advantage. Academy of Management Executive, 9(4), 4961.
Barney, J. B., & Clark, D. N. (2007). Resourcebased theory: Creating and sustaining competitive advantage. Oxford, UK: Oxford
University Press.
David, F. (2012). Strategic management: A competitive advantage approach (14th ed.). New York, NY: Prentice Hall.
Grant, R. M., & Jordan J. (2015a). Foundations of strategy. Hoboken, NJ: John Wiley & Sons.
Grant, R. M., & Jordan J. (2015b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ: John Wiley & Sons.
Strategy Planning
Module 5: Organizational Analysis and Strategy: Resources and Capabilities, Part 2
Module Introduction
Readings
Required
Chapter 3 in Foundations of Strategy Chapter 3 PowerPoint slides (media/SEU_MGT510_PPT_CH03_module04.ppt) in Foundations of Strategy Coman, A., & Ronen, B. (2009). Focused SWOT: diagnosing critical strengths and weaknesses (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx?direct=true&db=bth&AN=43429948&site=ehost live). International Journal of Production Research, 47(20), 56775689. Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysiswhere are we now? A review of academic research from the last decade. Journal of Strategy and Management, 3(3), 215251. Retrieved from http://www.researchgate.net/publication/247630801_ Exploring_SWOT_analysis__where_are_we_now__A_review_of_academic_research_from_the_last_decade (http://www.researchgate.net/publication/247630801_Exploring_SWOT_analysis__where_are_we_now__A_review_of_academic_research_from_the_last_decade)
Recommended
Abdi, M. R., & Awartani, A. (2013). Business strategy and corporate identity using balanced scorecards (https://csuglobal.idm.oclc.org/login?url=http://search.proquest.com.csuglobal.idm.oclc.org/docview/1626693094? accountid=38569). Journal of Current Issues in Finance, Business and Economics, 6(2/3), 213235. Kim, W. C., & Mauborgne, R. (2009). How strategy shapes structure. Harvard Business Review, 87(9), 7280. Go to a full listing of Harvard Business Review (http://eds.b.ebscohost.com.csuglobal.idm.oclc.org/ehost/command/detail?sid=3e98b6a2535949eabad5 de0bccce228a%40sessionmgr115&crlhashurl=login.aspx%253fdirect%253dtrue%2526db%253dbth%2526jid%253dHBR%2526site%253dehost live&hid=126&vid=0&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#jid=HBR&db=bth) publications Backtrack your citation by selecting the year, volume and issue number (right hand side of the screen) Scroll through the articles until you find the article: How Strategy Shapes Structure
For Your Success
Before launching into this week’s content, you are encouraged to review what was covered in the first four weeks of the course. Then, as this week’s reading, discussion, and writing unfold, the integration of previous information with Module 5 content will be an excellent way to absorb this material.
This week you have a Critical Thinking Assignment due. Review it and the corresponding grading rubric early in the week. Be sure to participate in the Live Session hosted by your instructor.
This week demonstrates graduatelevel work that is not formulaic, but requires interpretation and assessment. Have fun. Investigate. Develop assumptions.
Learning Outcomes
1. Identify and appraise the resources and capabilities of an organization. 2. Formulate strategies based on data from the analysis of a firm’s resources and capabilities. 3. Characterize an organization’s internal environment, and assess how the organization may exploit internal strengths and contend with
internal weaknesses. 4. Identify ways in which an organization may ensure alignment of internal resources and capabilities with its corporate strategy.
1. Internal Analysis: An Important Element and a Practical Tool, Part 2
In order to understand the sources of competitive advantage, firms are using many tools to analyze their internal resources. One such tool is VRIO. The tool was developed by J.B. Barney in 1995, in his work Looking Inside for Competitive Advantage. VRIO stands for four questions that ask if a resource is:
Download Transcript (media/SEU_MGT510_Interactive_Mod05_P1.docx)
A resource or capability that meets all four of the above requirements can provide a sustained competitive advantage for the company.
(Source: Adopted from Rothaermel’s, 2013, Strate
gic Management, p. 91)
2. Understanding a Tool: Value Chain Analysis
A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The idea of the value chain is based on the process view of organizations; the idea of seeing a manufacturing (or service) organization as a system, made up of subsystems each with inputs, transformation processes, and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources—money, labor, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and how they affect profits.
Value Chain Analysis (VCA) is a strategy tool used to analyze internal firm activities. Its goal is to recognize which activities are the most valuable to the firm and which ones could be improved to provide competitive advantage (http://www.strategicmanagementinsight.com/topics/competitiveadvantage.html). In other words, by looking into internal activities, the analysis reveals where a firm’s competitive advantages or disadvantages are. The firm that competes through differentiation advantage will try to perform its activities better than competitors would do. If it competes through cost advantage, it will try to perform internal activities at lower costs than competitors would. When a company is capable of producing goods at lower costs than the market price or providing superior products, it earns profits.
A firm’s primary activities add value directly to the production process; however, they are not necessarily more important than support activities. Nowadays, competitive advantage mainly derives from technological improvements or innovations in business models or processes. Therefore, such support activities as information systems, R&D, or general management are usually the most important source of differentiation advantage. On the other hand, primary activities are usually the source of cost advantage, where costs can be easily identified for each activity and properly managed. A firm’s value chain is a part of a larger industry value chain, and the more activities a company undertakes compared to industry value chain, the more vertically integrated (http://www.strategicmanagementinsight.com/topics/verticalintegration.html) it is.
(Source: Grant & Jordan, 2015b, chap. 4, slide 11)
Click to Enlarge
Click Here to Begin
Check Your Understanding
References
Grant, R. M., & Jordan J. (2015a). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley & Sons.
Grant, R. M., & Jordan J. (2015b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ: John Wiley & Sons.
Jurevicius, O. (2013, April). Vertical integration. Retrieved from http://www.strategicmanagementinsight.com/topics/vertical
integration.html
Porter, M. E. (1985). Competitive strategy: Creating and sustaining superior performance. New York, NY: Free Press.
Rothaermel, F. T. (2012). Strategic Management: Concepts and Cases. McGrawHill/Irwin, p. 91
Strategy Planning
Module 6: The Nature of Competitive Advantage: Innovation and Global Reach
Module Introduction
Readings
Required
Chapters 4, 6 (Introduction and objectives section through Competing for standards section), & 8 (Introduction and objectives section through Analyzing competitive advantage in an international context section) in Foundations of Strategy Chapter 4 PowerPoint slides (media/SEU_MGT510_PPT_CH04_module06.ppt) in Foundations of Strategy Contractor, F. J., Kumar, V., Kundu, S. K., & Pedersen, T. (2010). Reconceptualizing the firm in a world of outsourcing and offshoring: The organizational and geographical relocation of high‐value company functions (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx?direct=true&db=bth&AN=54591903&site=ehost live). Journal of Management Studies, 47(8), 14171433. Heracleous, L., & Wirtz, J. (2010, July–August). Singapore Airlines’ balancing act. Harvard Business Review, 145–149. Go to a full listing of Harvard Business Review (http://eds.b.ebscohost.com.csuglobal.idm.oclc.org/ehost/command/detail?sid=3e98b6a2535949eabad5 de0bccce228a%40sessionmgr115&crlhashurl=login.aspx%253fdirect%253dtrue%2526db%253dbth%2526jid%253dHBR%2526site%253dehost live&hid=126&vid=0&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#jid=HBR&db=bth) publications Backtrack your citation by selecting the year, volume and issue number (right hand side of the screen) Scroll through the articles until you find the article: Singapore Airlines' Balancing Act
Recommended
Liesch, P. W., Buckley, P. J., Simonin, B.L., & Knight, G. (2012). Organizing the modern firm in the worldwide market for market transactions (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=71107557&site=ehostlive). Management International Review, 52(1), 321
For Your Success
Students are encouraged to coalesce their thinking this week around the contemplation and personal definition of competitive advantage. Resist using the term in a general way to ensure that strategy choices are thoroughly understood and appropriate for the situation. Innovation and internationalization should then be studied within that same context.
You are required this week to participate in the discussion board and to complete the graded quiz.
Learning Outcomes
1. Define competitiveadvantage and demonstrate an understanding of the term by applying the concept to a realworld situation. 2. Discuss the two general types of competitive advantage and differentiate each within an innovative environment. 3. Assess a competitive advantage strategy specific to a global context. 4. Dissect strategy opportunities in the technology industry and identify the risks and rewards associated with each.
1. Competitive Advantage Concepts, Terms, and Types
The term competitive advantage became widely used within strategy concept discourse in the late 1990s and early 2000s. According to Rumelt (2003), value creation was often discussed in conjunction with competitive advantage. However, there is no agreedupon definition of competitive advantage. So business and academic leaders define and interpret the term according to their own understandings. The table below is a summary of different views and thoughts by a variety of scholars, and provides a sense of the breadth of approaches to competitive advantage.
As you read through the list of approaches and definitions below, compare what you see here to the stance taken by Grant and Jordan in your textbook.
Various Definitions of Competitive Advantage
Scholar Definition or Approach
Barney Economic profit is the difference between expected value and actual value; performance metrics are tied to generating greaterthanexpected value.
Besanko, Dranove, and Shanley A firm earns a higher economic profit than the average of competing firms and thus has a competitive advantage; economic profit is defined as the difference between profits garnered from investing in one activity versus investing the same resources in another activity.
Brandenberger and Stuart This is an industry view approach with multiple “agents,” including buyers, suppliers, and producers, who may increase total value by their presence.
Dierickx and Cool Privileged product market position may be nonsustainable if scarce assets are used to achieve the market position; opportunity costs of assets must be considered.
Ghemawat and Rivkin Superior financial returns for a long period of time are considered to have an advantage over competitors.
Kay Distinctive capabilities (those capabilities that others lack) are sustainable and can be transferred.
Peteraf Using resources specialized to the firm that produce and sustain higher than normal returns creates competitive advantage.
Porter Low costs, differentiation, or focus strategy success signal high performance and lead to competitive advantage; creating value for customers that is higher than the cost of creating it.
Saloner, Shepard, and Podolny An organization’s service or product is valued more by customers than the competitors’ services or products, or the cost to produce is lower than that of competitors; sustainable competitive value is needed to capture value.
Various Some strategy consulting firms purport to measure competitive advantage in shareholder returns.
Your textbook authors: Grant and Jordan A firm earns, or has the potential to earn, a persistently higher rate of profit over rivals.
(Source: Adapted from Rumelt, 2003)
Using the table above, consider your current thinking about an appropriate way to define or approach competitive advantage. Note that some of these approaches may be related to each other or consistent with a singular approach.
When you are satisfied with what you have chosen, click on this sentence for feedback.
There is no right or wrong answer here. The value in making the choices that you did is in understanding the concepts and thinking about the ones that most resonate with your analysis and experiences. In your organization, be sure that you understand how and why the term is used. When speaking about competitive advantage more generally, do not assume that your definition is consistent with others’ viewpoints.
Internal and External Changes and Competitive Advantage
Competitive advantage may be gained when a firm responds to changes in the environment by taking advantage of new ways to profit or by innovating and disrupting the industry to its advantage. The two approaches are not necessarily mutually exclusive, but each requires specialized strategies. The figure below provides an overview of how external and internal sources of change impact competitive advantage:
In the diagram above, observe the external sources of change and the two avenues that firms may take to remain competitive. Also note internal sources of change and discover how the path to innovation becomes clearer.
Types of Competitive Advantage
There are many ways to achieve competitive advantage, but there are usually two basic types of competitive advantage: cost or differentiation advantage. A company that is able to achieve superiority in cost or differentiation is able to offer consumers the products at lower costs or with a higher degree of differentiation and most importantly, is able to compete with its rivals. The figure below illustrates these types of competitive advantage.
(Source: Grant & Jordan, 2015b, chap. 4, slide 3)
Click to Enlarge
(Source: Grant & Jordan, 2015b, chap. 4, slide 6)
Factor 1 Factor 2 Factor 3 Factor 4
2. Technologies and Innovation: Risk and Reward
The demand to gain and sustain competitive advantage is particularly keen in the field of technology. According to Grant and Jordan (2015a), innovation is the main reason that one competitor may dominate others. Companies innovate:
by developing a new product or service, by marketing a product in a new way, or by using a new method to manufacture or distribute a product.
Whether a company is in the technology industry or simply relies on advanced technologies to conduct business, there are factors that demand increased innovation. Four factors that influence the need for innovation include:
Responding to technological changes
After absorbing the contents from the table above, test your understanding in the following exercise:
(Source: Grant & Jordan, 2015b, chap. 6, slide 6)
Click to Enlarge
Click Here to Begin
Check Your Understanding
3. Internationalization, Globalization, and Differentiation
The world economy grows just as trade and markets interconnect at every level. Not every industry can approach internationalization in the same way. To embark on a discussion of how to assess competitive advantage in an international setting, it is important to categorize industries for purposes of understanding commonalities and differences as well as opportunities and constraints. The graphic below depicts four industry segments based on the segmentation by international trade and foreign direct investment.
To further comprehend the segmentation, study the following definitions for each piece of the above matrix:
Copyright 2015 CSUGlobal Campus
Strategies associated with internationalization are described further in the following video:
(Source: Grant & Jordan, 2015b, chap. 8, slide 3)
Click to Enlarge
Trading Industries
Trade primarily through imports and exports and, if the product is easily transferable, distribution from a central location is most
effective. Examples: Defense equipment, commercial aircraft
Global Industries
Investment and trade are both highly important to these industries, which are primarily largescale manufacturing.
Examples: Consumer electronics, cars
Sheltered Industries
Primarily fragmented services industries, smallscale manufacturing, and perishable products; they do not compete with imports, or they are impacted by trade agreements or barriers.
Examples: Funeral services, local construction, fresh milk
Multidomestic Industries
Direct investment is used when trade is not feasible due to regulation or logistics, or when national differentiation exists.
Examples: Hotels, banking, consulting
Building strategies to gain or maintain competitive advantage in an international context requires the usual assessment of internal resources and capabilities, as well as industry characteristics. The graphic below illustrates the three assessment areas that contribute to strategy planning in an international context:
(Source: http://www.youtube.com/watch?v=9M5wWSA5vQQ&noredirect=1)
Short film introducing the topic of global strategy: What is it? Why is it important?
International Global Business Strategy, Sept. 2009
(Source: Grant & Jordan, 2015b, chap. 8, slide 4)
Click to Enlarge
Click Here to Begin
Check Your Understanding
References
Grant, R. M., & Jordan J. (2015a). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley & Sons.
Grant, R. M., & Jordan J. (2015b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ: John Wiley & Sons.
Hojnik, B., & Rebernik, M. (2012). Outsourcing of R&D and innovation activities in SMEs: Evident from Slovenia. Economic Review:
Hojnik, B., & Rebernik, M. (2012). Outsourcing of R&D and innovation activities in SMEs: Evident from Slovenia. Economic Review:
Journal Of Economics & Business / Ekonomska Revija: Casopis Za Ekonomiju I Biznis, 10(2), 311.
Rumelt, R. (2003). What in the world is competitive advantage? Retrieved from
http://www.anderson.ucla.edu/faculty/dick.rumelt/Docs/Papers/WhatisCA_03.pdf
Strategy Planning
Module 7: Business Strategies and Corporate Strategies, Part 1
Module Introduction
Readings
Required
Chapters 5 & 7 in Foundations of Strategy Chapter 5 PowerPoint slides (media/SEU_MGT510_PPT_CH05_module07.ppt) in Foundations of Strategy Chapter 7 PowerPoint slides (media/SEU_MGT510_PPT_CH07_module07.ppt) in Foundations of Strategy D'Aveni, R. A., Dagnino, G. B. & Smith, K. G. (2010). The age of temporary advantage (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=54637557&site=ehostlive). Strategic Management Journal, 31(13), 1371–1385. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=12493427&site=ehostlive). Strategic Management Journal, 18(7), 509533.
Recommended
Dibrell, C. Craig, J. & Hansen, E. (2011). Natural environment, market orientation, and firm innovativeness: An organizational life cycle perspective (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=61817041&site=ehostlive). Journal of Small Business Management, 49(3), 467489. O’Reilly III, C. A., & Tushman, M. L. (2013). Organizational ambidexterity: Past, present and future (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=93403905&site=ehostlive). Academy of Management Perspectives, 27(4), 324–38.
For Your Success
This week, you have a Critical Thinking Assignment to complete. In order to adequately plan your time, review the assignment early in the week as well as the corresponding grading rubric. Remember that this week you will also participate in the Live Session hosted by your instructor.
Look ahead to the following weeks to see what will be due and when. You have three more Critical Thinking Assignments (in Modules 10, 11, and 14) and three more graded quizzes (modules 10, 12, and 14).
Learning Outcomes
1. Analyze a specific industry’s development and determine strategies that are appropriate for each development stage.
2. Identify the different stages of a notforprofit organization’s development. 3. Assess an organization’s strategy to identify key stakeholders and analyze for interest and power.
1. Managing Strategic Change
With emerging technologies and expanding global marketplaces, it is imperative that organizations become highly proficient in driving their change agenda. Whether diversifying, downsizing, merging, reorienting business, or developing new management structures, organizations must be able to effectively carry out change initiatives to remain productive and competitive.
Industry and Product Life Cycles
Life cycles are not just a phenomenon of the life sciences. Industries, too, experience a similar cycle of life. Just as a person is born, grows, matures, and eventually experiences decline and, ultimately, death, so do industries, notforprofits, and product lines. While the stages are the same for all industries, not every industry or notforprofit will experience these stages in the same way; for some, the stages will last longer and for others they will pass quickly. Even within the same industry, various firms may be at different stages in their life cycle.
Another important step in this process is the identification of the organization’s stakeholders. Stakeholders are generally said to be those with an interest in an organization; they can affect or be affected by any action taken by the organization. While some stakeholders are internal to the organization, like employees, others are external, like customers and competitors.
A firm’s strategic plan is likely to be greatly influenced by the stage in the life cycle at which the firm finds itself. Some companies or even industries find new uses for declining products, thus extending their life cycle.
First, let’s watch a video about product life cycle and then we will view the figure, below, on industry life cycle.
The two drivers of industry maturation are demand from the market and knowledge gained
(Source: http://www.youtube.com/watch?v=9YyPEPgsRFU)
This video describes the various stages of a product life cycle.
Product Life Cycle
The two drivers of industry maturation are demand from the market and knowledge gained (particularly, what consumers come to know about the product and its use). Over time, consumers are better able to judge the value of a product and can assess what they are willing to pay for it.
In Module 6 we discussed innovative products as a factor of success. In addition to that, a new product that begins to mature often creates profits through incremental product innovation. Incremental product innovation follows a typical path of moving from design, to manufacturing innovation, to process innovation. The figure below illustrates the intersection points of a product’s maturity and process innovation:
(Source: Grant & Jordan, 2015b, chap. 5, slide 3)
Click to Enlarge
Research and review the industry maturity cycle and the drivers, and then consider the following question: Where do you consider the personal computer (PC) on the industry life cycle model?
(Source: Grant & Jordan, 2012b, chap. 5, slide 4)
Click to Enlarge
Reflect on your answer to the question above about personal computers and consider the following questions in that context:
Question #1
When did PC manufacturing begin to assert a competitive advantage?
Question #2
What did that competitive advantage look like?
Question #3
What does process innovation look like in the PC industry?
To adequately grasp the force of industry life cycles, it helps to have a breakdown of the various factors associated with each stage to provide a framework for assessing a specific industry, as shown in the following table:
Test your understanding of how you might apply the information from the table above to choose effective strategies by completing the following Check Your Understanding exercise.
Match the industry position on the left with the related effective strategy on the right by dragging items in the righthand column to correctly match items in the lefthand column.
(Source: Grant & Jordan, 2012b, chap. 5, slide 6)
Click to Enlarge
Check Your Understanding
Click Here to Begin
2. Tools of Strategic Change Management
Change management is the means used to evaluate current processes, to assess needed improvements, and to implement sound solutions. Good changemanagement tools help to ensure that the entire effort goes smoothly. Inherent in change management is that word that many people dread: “change.”
Although change is inevitable, it is often not welcome. For effective change management, a good set of tools and theories must be in place to ensure that everyone understands and supports the effort— the organization, its customers, and employees.
Examples of change management tools and models
Flow charting
This visual method depicts the order of processes, or their “flow.” Generally, a flow chart is a logical illustration with minimal text. Click here (http://asq.org/learnabout quality/processanalysistools/overview/flowchart.html) to see an example.
The McKinsey 7S Model
This model by McKinsey & Company is “a framework introduced to address the critical role of coordination, rather than structure, in organizational effectiveness” (Enduring Ideas, 2008, para. 1). Click here (http://www.mckinsey.com/insights/strategy/enduring_ideas_the_7 s_framework) for an example.
Metrics and data collection
These two measures are often confused. Metrics is one sort or type of thing whereas data may comprise multiple forms. Click here (https://hbr.org/2013/03/knowthedifference betweenyo/) for an example.
Project planning
No management activity takes place without proper planning. Click here (http://www.techopedia.com/definition/14005/projectplanning) to learn more.
Kotter’s 8Step Model
Visit Kotter International (http://www.kotterinternational.com/the8step processforleadingchange/) to download a free ebook and to view the model in entirety.
In the next module, Module 8, we continue our examination of Business Strategies and Corporate Strategies.
References
Enduring Ideas. (2008, March). Retrieved from
http://www.mckinsey.com/insights/strategy/enduring_ideas_the_7s_framework
Grant, R. M., & Jordan J. (2015a). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley
& Sons.
Grant, R. M., & Jordan J. (2015b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ:
John Wiley & Sons.
Strategy Planning
Module 8: Business Strategies and Corporate Strategies, Part 2
Module Introduction
Readings
Required
Chapters 5 & 7 in Foundations of Strategy Chapter 5 PowerPoint slides (media/SEU_MGT510_PPT_CH05_module07.ppt) in Foundations of Strategy Chapter 7 PowerPoint slides (media/SEU_MGT510_PPT_CH07_module07.ppt) in Foundations of Strategy Dibrell, C. Craig, J. & Hansen, E. (2011). Natural environment, market orientation, and firm innovativeness: An organizational life cycle perspective (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=buh&AN=61817041&site=ehostlive). Journal of Small Business Management, 49(3), 467489.
Recommended
Nagji, B., & Tuff, G. (2012). Managing your innovation portfolio. Harvard Business Review, 90(5), 6674. Go to a full listing of Harvard Business Review (http://eds.b.ebscohost.com.csuglobal.idm.oclc.org/ehost/command/detail?sid=3e98b6a2535949eabad5 de0bccce228a%40sessionmgr115&crlhashurl=login.aspx%253fdirect%253dtrue%2526db%253dbth%2526jid%253dHBR%2526site%253dehost live&hid=126&vid=0&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#jid=HBR&db=bth) publications Backtrack your citation by selecting the year, volume and issue number (right hand side of the screen) Scroll through the articles until you find the article: Managing Your Innovation Portfolio
For Your Success
As always, it is important to thoroughly grasp the principles and concepts in this module before the end of this week. Reviewing Modules 1 through 7 is also encouraged to better understand how the content is integrated throughout. Remember that this week you must participate in the Discussion Board and join the Live Session hosted by your instructor.
Learning Outcomes
1. Analyze a specific industry’s development and determine strategies that are appropriate for each development stage. 2. Identify the different stages of a notforprofit organization’s development. 3. Assess an organization’s strategy to identify key stakeholders and analyze for interest and power.
1. Industry and Organization Types and Strategy
The study of product and industry life cycles and appropriate strategies for both is not exclusive to forprofit companies. Many not forprofits (http://www.idealist.org/info/Nonprofits/Basics1) and publicsector organizations offer products and services that are critical to advancing the global economy and addressing social issues. Within the general labels of nonprofit and public sector are types of organizations that have different models, purposes, and stakeholders. Let’s look at some different organizational types.
NotforProfit
Public Sector
Government
Again, this label might entail more than you think it does. Let’s look at how the U.S. Internal Revenue Service defines this. http://www.irs.gov/GovernmentEntities/Federal,State&LocalGovernments/IsMyEntityaGovernment Entity%3F (http://www.irs.gov/GovernmentEntities/Federal,State&LocalGovernments/IsMyEntitya GovernmentEntity%3F)
NonGovernmental Organizations (NGO)
"The diversity of NGOs strains any simple definition,” according to the World Bank (n.d., para. 1). NonGovernmental Organizations (http://www.ngo.org/ngoinfo/define.html) can be funded by a variety of sources including governmental ones.
According to Grant and Jordan (2015), public sector and notforprofit organizations differ from profitcentered firms in the absence of market factors. However, in most cases, strategies require the involvement of multiple organizations that may have different goals that are targeted to reach the same outcome. Take, for example, the fight against malaria. Nongovernmental organizations, governments, notfor profits, and even privatesector firms have convened to tackle this imposing threat. At the heart of efforts such as malaria control is the need to acquire adequate funding and to engage large numbers of volunteers.
In the short video that follows, note the logos of different organizations displayed behind the dais. Consider what each speaker is asking for and the intricacy of the web of organizations involved:
Strategy planners know that effective strategies must be developed within the context of the external and internal environments of an organization. Scholars and business leaders often adapt welltested tools and models for use in unique situations. For example, Porter’s Five Forces of Competition model that you studied in earlier modules has been adapted for use in nonprofit organizations with some success. One such adaptation is illustrated below in Oster’s Six Forces model, which is geared specifically to the nonprofit world:
To selfassess your understanding of Oster’s model, read the following statements and determine the corresponding place on the model above for each statement. Roll over each statement to confirm your understanding of its corresponding place on the model:
Publicsector firms differ from privatesector firms in that publicsector firms are wholly or partly government funded.
(Source: http://www.youtube.com/watch?v=oqSoDBzINxs)
Malaria still remains a major challenge despite the discovery of new drugs. Some patients have developed resistance to some known antimalarial drugs and experts attribute this to what they call self medication. As NTV's Loise Wangui reports, one family Uasin Gishu is living proof that gains made in the fight against malaria could easily be reversed.
Experts call for change in antimalaria strategy
(Source: Grant & Jordan, 2012b, chap. 5, slide 11)
Click to Enlarge
In some cases, publicsector organizations provide services that cannot be provided by the private sector.
Publicsector organizations have stakeholders, some of whom are obliged by law to act in the national or public interest.
Notforprofit organizations often do make profits (called a surplus), but these are reinvested in the organization.
A characteristic of notforprofit organizations is a large number of stakeholders that require special management strategies.
Stakeholders
Stakeholders are powerful forces within a publicsector or notforprofit organization. Stakeholder groups require careful management, as each has different goals and objectives that may or may not be specifically aligned with the organization’s mission and goals. Managing the competing priorities of stakeholder groups requires the publicsector or nonprofit organization to assess, understand, and plan for each stakeholder group’s power and interest. The illustration below provides an overview of how realizing stakeholder power and interest is useful in managing these groups:
(Source: Grant & Jordan, 2012b, chap. 5, slide 13)
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2. Corporate Structure and Strategy: Scope and Diversification
Business strategy and corporate strategy, as discussed in Module 1, are different in that the decision makers for each may be different. Business strategy deals primarily with where business will be done, while corporate strategy, as determined by senior executives in the firm, is geared toward how business will be done. Corporate strategy, in general, deals with the following.
Scope
Scope refers to that of products and geographies. Senior executives deal with decisions about product scope (the range of products that the organization will supply), vertical scope (what vertically linked activities are appropriate), and geographic scope (whether the organization competes locally or globally). The following diagram depicts examples of how product, vertical, and geographic scope may be intertwined to create an appropriate structure around which to build implementation strategies:
(Source: Grant & Jordan, 2015b, chap. 7, slide 5)
Click to Enlarge
Diversification
This addresses the constructs around how much diversification in product and business the corporation needs. Senior leaders have the responsibility to assess the benefits and costs of diversifying product lines or geographic reach. The core concepts around these decisions are based on how a firm needs to grow to seize and maintain competitive advantage, how to mitigate risk to the organization, and how to exploit the linkages between businesses to create greater value.
Creation of shareholder value in forprofit organizations is evident; however, in the public sector or notforprofits, the notion of value creation is also relevant. Organizations working together may, for example, create economies of scale and lower transaction costs, or increase efficiency.
One aspect of diversification is whether a company focuses on horizontal diversification (moving within the same production areas) or vertical diversification (expanding along the chain of production). The answer lies in the types of products or services, the geographic scope, and the way the company interfaces with the customer or client.
Integration
This concerns how much a firm controls its supply chain.
In this module, we considered how to determine an organization’s strategy. We also looked at the impact of corporate structure on strategy. The takeaway for this module is that corporate structure and strategy need to be aligned at all levels such that the responsible parties in an organization understand the corporate and businesslevel decisions. A convenient way of thinking about the various levels of strategy is that corporatelevel strategy defines an organization’s market while businesslevel strategy refers to how the organization navigates the market. Functionallevel strategy is the foundation that supports both corporate and businesslevel strategies.
(Source: Grant & Jordan, 2012b, chap. 7, slide 7)
Click to Enlarge
References
Grant, R. M., & Jordan J. (2015a). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley & Sons.
Grant, R. M., & Jordan J. (2015b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ: John Wiley & Sons.
Stakeholder. (n.d.). Businessdictionary.com. Retrieved from
http://www.businessdictionary.com/definition/stakeholder.html#ixzz3h87UAvod
World Bank. (n.d.). Definitions of an NGO. Retrieved from http://www.gdrc.org/ngo/wbdefine.html
Strategy Planning
Module 9: Realizing Strategy, Part 1
Module Introduction
Readings
Required
Chapter 9 in Foundations of Strategy Chapter 9 PowerPoint slides (media/SEU_MGT510_PPT_CH09_module10.ppt) in Foundations of Strategy Higgins, J.M. (2005). The eight ‘S’s of successful strategy execution (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=16968322&site=ehostlive). Journal of Change Management, 5(1), 313.
Recommended
Sirmon, D. G., Hitt, M. A., Ireland, R. D., & Gilbert, B. A. (2011). Resource orchestration to create competitive advantage breadth, depth, and life cycle effects. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1994489 (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1994489)
For Your Success
Modules 9 12 cover strategy implementation in a way that brings realworld examples to the concepts and theories. Previous course content showed how environmental assessment, quantification, and implementation are critical to successful strategy planning. At this point in the course, your attention is drawn to implementation, with the assumption that wise business and corporate strategies have already been developed.
This week you have a Discussion Question to respond to. Review the Discussion Board early in the week and plan for your thorough response that requires you to do research and analytical thinking.
Learning Outcomes
1. Describe the linkage between strategy formulation and implementation, and ascertain the factors that influence whether a specific strategy may be realized.
2. Explain an organization’s operational barriers and mitigation choices that might impact a specific strategy and its likelihood of successful implementation.
3. Analyze an organizational strategy, and design an organizational structure and management system that may support the effectiveness of a strategy.
4. Illustrate the importance of organizational culture to strategy implementation in a realworld example.
1. The Strategic Planning System: Linking Strategy to Action
Realistically, a strategy cannot be realized until it is fully functioning. That is why strategy implementation is so critical to business success. For strategy to be realized, all elements of an organization must be aligned and working toward the same goal. If alignment is to be achieved, the constant changes in an industry and general environment mean that strategies must be changed and organizations must respond to new directions and regain alignment.
Many organizations are functionally oriented, meaning that management structures follow the lines of function, for example: finance, marketing, operations, information technology, and human resources. Alignment within the functional area is important for cost efficiency, specialization, and quality. However, organizational performance is also contingent on crossfunctional factors such as:
systems, processes, and shared values.
The key here is that alignment is multidirectional.
Peters and Waterman’s 1982 publication of the McKinsey 7S Model introduced a cross functional way of approaching strategy execution (Higgins, 2005). The authors suggested that every
functional way of approaching strategy execution (Higgins, 2005). The authors suggested that every factor that impacts organizational performance is encompassed in one of the “S’s.” Higgins (2005) suggested that the 8S model is used in strategy planning, such that when the implementation plan is under development, there are some agreedupon principles that were already identified in strategy sessions.
There are numerous reasons why organizations have difficulty in gaining alignment. There are times when a particular strategy cannot be implemented quickly because of the number of systems, processes, and policies that have to be designed, and the time needed to train employees and shift the values of the organization. Attempting to move the organization too quickly or too soon is a high risk to successful strategy implementation. Thus, leaders must remain cognizant of the organization’s ability to adapt, to manage the process and, perhaps most importantly, to lead the change effort.
Visit this week’s Higgins reading (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=16968322&site=ehostlive) now to examine the flowchart images in the article.
2. Organizational Design: The Fundamentals of Organizing
Functional operations are impacted by the entire realm of crossfunctional factors discussed in the 8S model detailed on the previous lecture page. One way that companies control the functions is through lines of authority and decision making. Another mechanism closely tied to control is the way that formal communication is distributed. Organizational design must include some control mechanisms; however, depending on the corporate strategies, the structures also promote or reduce
the probability of interaction, coordination, or cooperation.
Study the figure below to view two structures with different interaction requirements:
The (a) structure in the diagram above is one of selfdesigning teams. The team must interact to agree upon and establish the operating principles, because there is no established leader, decisionmaking process, or communication channels. Zappos—a Las Vegasbased, online clothing and shoe store—is one organization that has been described as practicing a form of selfdesigning team concept called holacracy (http://www.holacracy.org/howitworks/). The outcome may be successful and the number of interactions is noted (in this example as 10 interactions). In structure (b) above, the lines of reporting, communication, and decision making are clear and four interactions are noted.
Note: The fewer the number of interactions, the lower the cost to transact business.
In mature organizations, bureaucracy and hierarchy are common and necessary to maintain control and meet legal and regulatory requirements. Hierarchies are also quite efficient, making the design a lowcost alternative to some other structures. A functional hierarchical structure is displayed in the following figure:
(Source: Grant & Jordan, 2015b, chap. 9, slide 6)
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(Source: Grant & Jordan, 2015b, chap. 9, slide 8)
Click to Enlarge
In a functionalstructured organization, there are often limitations to interaction and coordination among units. For example, a design that puts a lot of control in the hands of senior management leaves more junior employees with little flexibility or decisionmaking power. However, these structures are efficient and costeffective, and develop a strong common language and culture.
Another organizational design is very common when organizations have diversified, either by adding products or by extending geographic reach. Shown below is the 2008 General Electric multidivisional structure that promoted alignment through the common use of tools coming from corporate headquarters into all business units:
The third type of organizational design, shown below, is the matrix structure. Note the added complexity of reporting and controls to meet the necessity of coordinating across the organization:
Now, return to the core of this course and strategy planning. Place organizational design and operations in the context of strategy planning as you watch the following video. Look for elements that may help guide your assessment for this week’s Critical Thinking Assignment:
Click to Enlarge
(Source: Grant & Jordan, 2015b, chap. 9, slide 9)
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(Source: Grant & Jordan, 2015b, chap. 9, slide 10)
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that may help guide your assessment for this week’s Critical Thinking Assignment:
(Source: http://www.youtube.com/watch?v=LvyXVTb3f1Y)
This is a 4.5minute video clip on Organization Design.
Michael Glenn Overview Organization Design
Click Here to Begin
Check Your Understanding
References
Grant, R. M., & Jordan J. (2015). Foundations of strategy [PowerPoint slides]. Hoboken, NJ:
John Wiley & Sons.
Higgins, J. (2005). The eight ‘S’s of successful strategy execution. Journal of Change
Management, 5(1), 313.
Management, 5(1), 313.
Velcu, O. (2010). Strategic alignment of ERP implementation stages: An empirical investigation.
Information & Management, 47(3), 158166.
Strategy Planning
Module 10: Realizing Strategy, Part 2
Module Introduction
Readings
Required
Chapter 9 in Foundations of Strategy Chapter 9 PowerPoint slides (media/SEU_MGT510_PPT_CH09_module10.ppt) in Foundations of Strategy Chu, V., Girdhar, A., & Sood, R. (2013). Couching tiger tames the dragon (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=89368473&site=ehostlive). Business Today, 22(15), 9296. Radomska, J. (2014). Model of successful strategy execution: Revising the concept (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=buh&AN=100424255&site=ehostlive). Problems of Management in the 21st Century, 9(3), 213222.
Recommended
Kaushik, M. (2012). Conditions apply (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=84345716&site=ehostlive). Business Today, 21, 20. Norton, M., Mochon, D., & Ariely, D. (2011). The IKEA effect: When labor leads to love. Retrieved from http://www.hbs.edu/faculty/Publication%20Files/11091.pdf (http://www.hbs.edu/faculty/Publication Files/11091.pdf)
For Your Success
Remember, Modules 912 cover strategy implementation in a way that brings life to the concepts and theories. Be sure to think about all of the course content in order to fully comprehend the importance of dealing with each step of the planning process.
This is a busy week. You have a Critical Thinking Assignment due as well as a graded quiz. Review the writing assignment early in the week and contact your instructor if you have any questions or
the writing assignment early in the week and contact your instructor if you have any questions or concerns. You will also participate in a Live Classroom session hosted by your instructor this week.
Learning Outcomes
1. Describe the linkage between strategy formulation and implementation, and ascertain the factors that influence whether a specific strategy may be realized.
2. Explain an organization’s operational barriers and mitigation choices that might impact a specific strategy and its likelihood of successful implementation.
3. Analyze an organizational strategy, and design an organizational structure and management system that may support the effectiveness of a strategy.
4. Illustrate the importance of organizational culture to strategy implementation in a realworld example.
Strategy planning Budgeting Financial systems Information systems Human resources
1. Management Systems and Strategy Implementation
There are multiple systems that are impacted by new strategies. These systems—Strategy Planning, Budgeting, Financials, Information Technology, and Human Resources—are needed to contain and maintain the support for new strategy.
Strategy planning along with budgeting, below, are two of the core systems that must adapt to new strategies, in that they create a process for alignment and the distribution of resources to support the strategy.
An emphasis on implementation rather than support, maintenance, and monitoring, relies on change management principles. For purposes of this course, seven processes and systems are identified as “change levers.” This means that if the seven are aligned around the new strategy, then the risk of a failed implementation is greatly reduced.
The change levers include the following:
Leadership and sponsorship Governance and reporting Communication Performance management Incentives and rewards Learning and training Recruiting and hiring
Recall Higgins’ 8S model discussed earlier in this lecture. Do you find any correlation to the S’s and these change levers?
(Source: https://youtu.be/DViVtgD0xwE)
You need strategy for your organization – Prof. Michael Porter
Professor Michael Porter of Harvard University's School of Business discusses competitive strategy and the role it can play in solving the world's challenges.
Click Here to Begin
Check Your Understanding
2. Strategy Implementation is not Strategy Execution
Over time, most students of strategic management, and even managers, have used the words implementation and execution interchangeably, but these words have distinct meanings, particularly when it comes to business and organizational management. In a recent article in the Harvard Business Review, Favaro (2015) drew attention to these words, articulating the difference between them, and how the confusion could be affecting outcomes. Favaro (2015) noted that “ignoring or blurring the differences contributes to sloppy thinking, decision making, and action at all levels of an organization” (para. 2).
Let’s look more closely at these two terms.
Implementation
Based on Favaro’s definition, it appears it’s all but impossible for strategy to ever be fully implemented. This is because the assumptions that an organization assumes about customers, technology, regulation, and competitors when formulating the strategy are in a constant state of flux. For these reasons, it is imperative that managers treat strategies as in constant evolution, that is, that they are continuously updating their strategies. There will always be a gap between where a company is and what its strategies call for. “Implementation” is what happens when we close the gap between where a company is and what the strategy calls for. Thus, strategy and implementation are almost always running in parallel rather than in sequence.
Execution
Favaro (2015) defined execution as “the decisions and activities a company undertakes in order to turn an implemented strategy into commercial success” (para. 8 ). It is his position that to achieve “execution excellence” is to realize the best possible results a strategy and its implementation will allow (Favaro, 2015, para. 9).
What is clear from Favaro’s article is that when business leaders confuse strategy, implementation, and execution, they usually end up just running a company—doing things such as setting goals and
For Example: Imagine that SABIC decided to enter the water desalination business and to exit the fertilizer business. Once SABIC is in water desalination and out of the fertilizer business, that “strategy” (or that part of its strategy) is implemented. Now, the firm must set goals and plans for the water desalination business, establish the right incentives for employees, and create a mission statement that is to the point in the context of the goals and that will motivate and inspire followers. Certainly that is not the end of what these leaders will need to do to get the results they seek—in the context of an “implemented strategy” these are key actions, however.
targets; making plans and initiatives; and establishing mission, vision, and purpose statements—but they achieve very little actual strategy, implementation, or execution (Favaro, 2015).
We’ll close this module with the following video.
The term Blue Ocean Strategy is derived from the bestselling book by W. Chan Kim and Renee Mauborgne. In the book, they described how companies traditionally compete in red ocean conditions, where businesses viciously fight against each other for a share of the marketplace. Instead, according to the blue ocean strategy, organizations should find a way to work in a marketplace that is free of competitors. In essence, the authors are suggesting that competition will be irrelevant if leading companies systematically create blue oceans of uncontested market space ripe for growth, instead of battling the competition.
(Source: https://youtu.be/clpIMpuwaQ)
How to recreate the structure of your industry.
Renée Mauborgne: Blue Ocean Strategy, Create New Markets and Leave the Competition Behind
ripe for growth, instead of battling the competition.
References
Favaro, K. (2015, March 31). Defining Strategy, Implementation, and Execution. Retrieved July
21, 2015, from https://hbr.org/2015/03/definingstrategyimplementationandexecution
Grant, R. M., & Jordan J. (2012). Foundations of strategy [PowerPoint slides]. Hoboken, NJ:
John Wiley & Sons.
Higgins, J. (2005) The eight ‘S’s of successful strategy execution. Journal of Change
Management, 5(1), 313.
Kim, W. C., & Mauborgne, R. (2015). Blue Ocean Strategy, Expanded Edition: How to Create
Uncontested Market Space and Make the Competition Irrelevant. Boston, MA: Harvard
Business Review Press.
Strategy Planning
Module 11: Realizing Strategy, Part 3
Module Introduction
Readings
Required
Chapter 6 (Implementing technology strategies: Creating the conditions for innovation through the end of the chapter) & 8 (The international location of production section through the end of the chapter) in Foundations of Strategy Chapter 6 PowerPoint slides (media/SEU_MGT510_PPT_CH06_module11.ppt) in Foundations of Strategy Chapter 8 PowerPoint slides (media/SEU_MGT510_PPT_CH08_module11.ppt) in Foundations of Strategy Martin, R. L. (2010). The execution trap. Harvard Business Review, 88(7/8), 6471. Go to a full listing of Harvard Business Review (http://eds.b.ebscohost.com.csuglobal.idm.oclc.org/ehost/command/detail?sid=3e98b6a2535949eabad5 de0bccce228a%40sessionmgr115&crlhashurl=login.aspx%253fdirect%253dtrue%2526db%253dbth%2526jid%253dHBR%2526site%253dehost live&hid=126&vid=0&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#jid=HBR&db=bth) publications Backtrack your citation by selecting the year, volume and issue number (right hand side of the screen) Scroll through the articles until you find the article: The Execution Trap Yu, D., & Hang, C. C. (2010). A reflective review of disruptive innovation theory (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx?direct=true&db=bth&AN=55022200&site=ehost live). International Journal of Management Reviews, 12(4), 435452.
Recommended
Ning, H. (2012). How to maintain sustainable competitive advantages: Case study on the evolution of organizational strategic management (https://csuglobal.idm.oclc.org/login? url=http://search.proquest.com.csuglobal.idm.oclc.org/docview/1040853356?accountid=38569). International Journal of Business Administration, 3(5), 4551.
For Your Success
This week’s module focuses on the importance of culture to strategy implementation. Critical thinking related to organizational culture and managing strategy change can be invigorating, because it certainly is complex and challenging.
You have a Critical Thinking Assignment due this week. You will also participate in a Live Session hosted by your instructor.
Learning Outcomes
1. Describe the role that organizational culture plays in realizing strategy and assess a realworld organization’s strategy and culture fit. 2. Identify the organizational conditions necessary to successfully implement strategies in an innovative environment and apply them to a
realworld example. 3. Identify the organizational conditions necessary to successfully implement strategies in globally diverse environments and apply them to a
realworld example. 4. Evaluate the success of a specific strategy and make recommendations for improvement.
1. Just How Important Is Culture to Realizing Strategy?
In Modules 9 and 10, the emphasis for realizing strategy was on operations, organizational design, and management systems. Review Higgins’ 8S model and the correlation to management systems and processes. This now brings the implementation discussion to the culture of the organization and its relationship to strategy success.
Organizational culture is fundamentally about the way individuals behave in an organization to get work done. Corporate culture, as defined by Grant and Jordan (2015a), most often refers to the values that senior management wants to encourage in the organization.
as defined by Grant and Jordan (2015a), most often refers to the values that senior management wants to encourage in the organization. It’s difficult to define organizational or corporate cultures, but read the elements of each in the statements below. As you see, the culture might focus on teaming, cooperation, bureaucracy, frontline decision making, or open and direct performance management. The culture essentially drives how work gets done and how strategies are successfully achieved.
Read the following statements. What can you learn about an organization’s culture through each?
Example #1
When I am completing a clientapplication form, I know that pulling the data from the information system at a later point in time is difficult. So, I keep a copy and that way I always know where to access the information. We’re not supposed to do that, but it saves so much time down the road.
Example #2
I know that if I make a decision that ensures one of our customers walks away with a correct answer, my manager will support me. Even if the company policy isn’t clear, I always know that the customer comes first.
Example #3
When I have a performance review, I know my manager is going to tell me about two things that I do well and two areas where I need improvement. It’s the same every time.
Example #4
There are times when the salespeople get to trump my decisions; revenue is “king” in this organization.
Example #5
A group of us from different departments gets together for lunch one day a week. It’s a great way to talk about the projects in which we’re involved. It’s the only time we really get to hear about what’s going on in other units. I don’t think management knows this, but without this group, these projects would keep getting stuck.
Example #6
My manager and I sit down once a quarter over coffee. I talk about things I want to learn and also what holds me back from completing some current assignments. My manager tells me about the direction of the unit and upcoming opportunities. The thing that I really like is that my manager knows what my strengths are and tells me how I am making a contribution.
Example #7
I found out the hard way that making a bad decision can wreck a career in my company. I simply will not make a decision until I know that it will be approved; it just isn’t worth the risk.
What’s the importance of this thing called “culture”? See what one expert has to say about it.
(Source: https://youtu.be/nDStFRcXhJQ)
Adam Bryant: The Importance of Culture in the Workplace
As you can see, culture is deepseated and comprises multiple levels.
Click items in the left column to add them in order on the right. Click items on the right to remove them and try again.
Adam Bryant discusses the amorphous nature but extreme importance of healthy company culture. Bryant writes the feature Corner Office for The New York Times. His latest book is Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation (http://goo.gl/V2azMD (http://goo.gl/V2azMD)).
(Source: Grant & Jordan, 2015b, chap. 9, slide 14)
Click to Enlarge
Click Here to Begin
Check Your Understanding
2. Global Organizations and Strategy Implementation
A firm that is geographically dispersed such as a multinational enterprise (MNE) is particularly challenged in the implementation of new strategies. The 7S model, also referred to as the McKinsey 7S, is a framework that represents:
Developed by Tom Peters and Robert Waterman, two consultants working for McKinsey in the 1980s, the framework helps align all the internal aspects of an organization to make it more effective, whether the organization is geographically widespread or operates in one location. If something within the organization is not working, it is quite possible that there are inconsistencies in or among some of the seven elements. Once these inconsistencies are revealed, the organization can then work to align the elements to ensure each is contributing to the shared goals and values.
In particular, leaders diagnosing and assessing the ability to implement strategies must consider that geographic distribution, in itself, impacts the organizational culture and subcultures. Below is a list of questions that leaders might ask in planning for strategy implementation and change in an MNE:
What are the norms?
What are the different languages, ethnicities, religions, and social norms exhibited in the workforce and among customers, suppliers, buyers, strategic partners, and other stakeholders? How specifically do these differences in norms impact the product or service?
What are the politics?
Click to Enlarge
What different political forces exist and what are their relationships with the firm and various locations?
What about currency?
What monetary differences exist?
What is the strength of related organizations?
How weak or strong are financial institutions and legal organizations?
How about getting products or services to market?
Do transportation links exist?
How will distance affect us?
Are some parts of the organization geographically remote from others?
What communication modes and technologies exist?
What communication links are accessible and what are the preferred communication modes?
Are the economies different?
Are the economics of consumers the same or different across the geographic locations?
What can we count on?
What resources are available in each location?
How do we share knowledge?
How is knowledge shared across company lines?
What cultural issues exist?
What is it about our products or services that may be relevant to a particular culture or country?
Overall strategy implementation planning is essential, but it is evident that managing change may be particular to the various locations and ventures, as you will see in the video below.
(Source: https://youtu.be/3oTLyPPrZE4)
Globalization
Unlike those firms doing business domestically, MNEs have a slew of additional factors that are affected by engaging in business overseas. These companies must consider such things as the culture of the host country and its religion, politics, and economy (including marketing, finance, and accounting), to name a few. To be successful internationally, MNEs must preempt some of the difficulties of doing business outside the “home” by developing a welldesigned business strategy. For example, McDonald's has managed to succeed in Saudi Arabia by offering various culturally and religiously appropriate specialties. Not only does the fastfood giant respect Ramadan by restricting service during fasting periods during the holy month, it also offers special menus at night. The chain adheres to local laws by segregating male and female diners.
We’ve seen in this week’s readings and module that globalization, while expanding options and opportunities, in many ways requires careful consideration, analysis, and realignment of strategies and tactics in order to remain successful.
The world is becoming more and more interconnected. Globalization changes how people consume, work, and live almost everywhere in the world. Today, many economic, political, cultural, or ecological relationships are not explainable from a national perspective. At the same time, a controversial debate about the consequences of globalization has begun. But what are the main causes for globalization? In what areas is it most prominent? And who are the winners and losers of globalization?
References
Grant, R. M., & Jordan J. (2015a). Foundations of strategy (2nd ed.). Hoboken, NJ: John Wiley & Sons.
Grant, R. M., & Jordan J. (2012b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ: John Wiley & Sons.
Organizational Culture. (n.d.). BusinessDictionary.com. Retrieved from
http://www.businessdictionary.com/definition/organizationalculture.html
Strategy Planning
Module 12: Realizing Strategy, Part 4
Module Introduction
Readings
Required
Chapter 6 (Implementing technology strategies: Creating the conditions for innovation through the end of the chapter) & 8 (The international location of production section through the end of the chapter) in Foundations of Strategy Chapter 6 PowerPoint slides (media/SEU_MGT510_PPT_CH06_module11.ppt) in Foundations of Strategy Chapter 8 PowerPoint slides (media/SEU_MGT510_PPT_CH08_module11.ppt) in Foundations of Strategy Martin, R. L. (2010). The execution trap. Harvard Business Review, 88(7/8), 6471. Go to a full listing of Harvard Business Review (http://eds.b.ebscohost.com.csuglobal.idm.oclc.org/ehost/command/detail?sid=3e98b6a2535949eabad5 de0bccce228a%40sessionmgr115&crlhashurl=login.aspx%253fdirect%253dtrue%2526db%253dbth%2526jid%253dHBR%2526site%253dehost live&hid=126&vid=0&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#jid=HBR&db=bth) publications Backtrack your citation by selecting the year, volume and issue number (right hand side of the screen) Scroll through the articles until you find the article: The Execution Trap
Recommended
Ning, H. (2012). How to maintain sustainable competitive advantages: Case study on the evolution of organizational strategic management (https://csuglobal.idm.oclc.org/login? url=http://search.proquest.com.csuglobal.idm.oclc.org/docview/1040853356?accountid=38569). International Journal of Business Administration, 3(5), 4551. Capozzi, M. (2012). Leadership and Innovation. World Bank Organization. Retrieved from http://wbi.worldbank.org/wbi/devoutreach/article/365/leadershipandinnovation (http://wbi.worldbank.org/wbi/devoutreach/article/365/leadershipandinnovation)
For Your Success
This week’s module continues the exploration of strategy implementation. You are encouraged to review previous module content to clearly understand how the various levels of strategy are interconnected.
This week you are required to participate in the Discussion Board and take the graded quiz. Refer to both your syllabus and the Discussion Board rubric.
Learning Outcomes
1. Describe the role that organizational culture plays in realizing strategy and assess a realworld organization’s strategy and culture fit. 2. Identify the organizational conditions necessary to successfully implement strategies in an innovative environment and apply them to a
realworld example. 3. Identify the organizational conditions necessary to successfully implement strategies in globally diverse environments and apply them to a
realworld example. 4. Evaluate the success of a specific strategy and make recommendations for improvement.
1. Innovative Organizations and Strategy Implementation
Earlier in this course, we studied competitive advantage and the role of innovation. In a study by Ning (2012), findings indicate that sustaining competitive advantage requires innovation and continuous improvement. To innovate means that companies must be flexible and creative, and, for that to occur, the firm’s environment must be conducive to stimulating and developing new ideas. Interaction among various operatives such as information technology specialists and business units is essential. Strategy with relation to
Interaction among various operatives such as information technology specialists and business units is essential. Strategy with relation to innovation is challenging—the culture of the organization plays an important role in the quest for successful implementation. The demands on structure, processes, reward systems, and people are particularly important in innovative organizations.
Study the comparison in the table below between operating and innovating organizations to get a sense of just how different implementation may be in each of these organizations:
Ning (2012) points out that one of the greatest challenges for leaders is to be able to assess, diagnose, and plan for organizational change in an innovationheavy environment. Recall the necessity to align systems and processes to manage change and realize strategy.
(Source: Grant & Jordan, 2015b, chap. 6, slide 14)
Click to Enlarge
2. Knowing Success When You See It: Evaluation and Adjustment
Strategy planning is never complete without evaluating whether the strategy was successful. We have studied the importance of sound strategy implementation to realizing strategy. Implementing a bad strategy, however, often means failure.
The following video tells the story of a wrongheaded strategy implementation:
Strategy evaluation is based on the firm’s metrics (http://www.klipfolio.com/resources/articles/whatarebusiness metrics)to determine if goals have been met. Let’s look at some of the factors to consider:
Revenues
(Source: http://www.youtube.com/watch?v=lmLZMLhqN4k)
JC Penney's recent strategy to eliminate coupons so they can compete with Target and Walmart is a miserable failure.
JC Penney Fires President after Failed Strategy, June 2012
Revenues
Financial reports: The formal record of an organization’s financial activities. Revenue: The amount of money that a company receives for goods and services during a specific period.
Profits
The financial gain to a company, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
Customer Satisfaction
A measure of how satisfied customers are with the products or services of a company.
Supplier Satisfaction
Supplier satisfaction is essential in managing buyersupplier relationships. Satisfaction of the supplier can enhance information exchange between the buyer and the supplier.
Industry Position
The ranking of a product or company relative to competitors in the same industry.
In all instances, the data collected may be the catalyst to initiate another round of strategy planning. The process of conducting an external industry analysis and internal resource and capability assessment (http://trinitywebworks.com/blog/internalanalysisyourcompetitiveadvantage.html) is a first step toward recognizing what and how to adapt strategy. Reviewing business and corporate strategies in alignment with the organization’s vision and mission is imperative. Finally, assessing the strength of implementation and the flexibility and adaptability of the firm is a solid step toward continuous improvement in the quest for competitive advantage.
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Check Your Understanding
References
Grant, R. M., & Jordan J. (2012a). Foundations of strategy. Hoboken, NJ: John Wiley & Sons.
Grant, R. M., & Jordan J. (2012b). Foundations of strategy [PowerPoint slides]. Hoboken, NJ: John Wiley & Sons.
Ning, H. (2012). How to maintain sustainable competitive advantages: Case study on the evolution of organizational strategic
management. International Journal of Business Administration, 3(5), 4551.
Strategy Planning
Module 13: Trends and Issues in Strategic Management
Module Introduction
Readings
Required
Chapter 10 in Foundations of Strategy Chapter 10 PowerPoint slides (media/SEU_MGT510_PPT_CH10_module13.ppt) in Foundations of Strategy Elms, H., Brammer, S., Harris, J. D., & Phillips, R. A. (2010). New directions in strategic management and business ethics (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=52533907&site=ehostlive). Business Ethics Quarterly, 20(3), 401425. Mandurah, S., Khatib, J., & AlSabaan, S. (2012). Corporate social responsibility among Saudi Arabian firms: An empirical investigation (https://csuglobal.idm.oclc.org/login? url=http://search.proquest.com.csuglobal.idm.oclc.org/docview/1048224499? accountid=38569). Journal of Applied Business Research, 28(5), 10491058. Rae, S. (2013, February 13). Business. Ministry. Life. Retrieved July 23, 2015, from http://crowell.biola.edu/blog/2013/feb/13/whyethicsclassesrae/ (http://crowell.biola.edu/blog/2013/feb/13/whyethicsclassesrae/)
Recommended
Luchs, M. G., Naylor, R. W., Irwin, J. R., & Raghunathan, R. (2010). The sustainability liability: Potential negative effects of ethicality on product preference (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=bth&AN=52902827&site=ehostlive). Journal of Marketing, 74(5), 1831.
For Your Success
Strategy planning has so many components that students often feel overwhelmed by the amount of content. At this point in the course, we have placed an emphasis on designed and tested theories
content. At this point in the course, we have placed an emphasis on designed and tested theories and current ways of doing business, with an eye to the future of the field. That will serve you well as you develop your interests and career goals.
Remember that there are resources available to consult when developing strategy choices, making decisions, and planning for implementation. The critical things to remember are:
Gather and use data; calculate and analyze. Know the industry and be laserfocused on the vision and mission of the organization. Use the resources and capabilities of the firm for optimal results; don’t let internal weaknesses eat up all your resources and time. Use welltested theories and principles. Plan for change to implement strategies. Evaluate and adapt; plan to improve.
This week you are required to participate in the Discussion Board (by 11:59 p.m. on Saturday night). You will also participate in a Live Session hosted by your instructor.
Learning Outcomes
1. Identify the responsibilities of ethics and social programs in the context of internationalization. 2. Describe the concept of management of organizational fashion and potential perils. 3. Assess the impacts of macro trends (economic, environmental, technology, social, political,
demographic) on strategy thinking.
1. The Changing Role of the Manager
Nothing is constant but change—have you ever heard that adage? It’s true, especially in the business and organizationalmanagement worlds. Everyone is talking about change, and is interested in what
and organizationalmanagement worlds. Everyone is talking about change, and is interested in what change brings, because it likely affects what we do in our organizations and how we do it. Change is hard on people. We resist. So, to minimize disruptions, managers must develop new skills or at least update their skills as well as gauge what training and skills development is going to be necessary in their staff.
In a 2006 report (https://www.bcg.com/documents/file14724.pdf) prepared by the Boston Consulting Group (BCG) for a skills agency in Australia, Nicholson and Nairn identified the economic rise of China and India and the consequent growth in offshoring as some of the factors that are changing the executive landscape. The world economy, especially those economies of developed countries, has shifted from a production economy to a service economy. Another change in the world economy is the greater focus on people performance rather than on the performance of assets. Too, innovations in technology have affected not only systems, circuits, and hardware, but also how individuals and groups communicate and perform activities of daily living.
Consider the other factors found by Nicholson and Nairn as having dramatic impacts on the way managers think and act:
Labor
The workforce is aging and being affected strongly by Baby Boomers’ retirements. It is estimated that by 2025, Millennials will make up 75% of the global workforce. Being the most educated, diverse, and connected generation in history, they are going completely against normal work protocol. This is the generation of workers most likely to use social networks such as Facebook and Twitter to communicate with coworkers. To be competitive in this new age, companies should embrace social networks because these technologies not only help Millennials learn about what is going on in the industry, but also appeal to them as means of communication.
Value
The rise of shareholder value as the primary measure of a company’s performance and the growing influence of the corporate governance movement are strong factors impacting management.
There has also been an increase in shareholder activism; shareholders are demanding more say in matters like corporate governance, board membership, and overall company strategy. There have been instances of activist shareholders demanding the removal of company CEOs, and sometimes sacking the entire management of companies. To respond to this changing landscape, companies must become sophisticated in preparing for and in dealing with activists. Companies must periodically review their businesses and strategies with an eye to understanding the platforms that activist investors would pursue.
Nicholson and Nairn concluded that the mindset of managers in the 21st century will undergo a transformation in the way they think about their role, interact with colleagues, consider the basis of leadership, and address their broader attitude to life. Below are some of the skills they have identified in successful managers through 2020 and beyond:
Maximize opportunities in a changing world
To do this, a “new” manager will be a continual learner who has an international perspective and is able to confidently move among global markets and cultures. She or he must be able to reflect the needs of the aging Baby Boomers and the Millennials that make up the bulk of the workforce (Blatstein, 2012).
Manage diversity in a changing workplace
Manage diversity in a changing workplace
To be able to do this, a manager must be able to manage three generations of workers and gain insight into how to motivate a diverse workforce (Blatstein, 2012).
Master staff performance measures based on outputs rather than inputs
To do this, a manager will need to focus not only on managing outcomes, but also on managing outputs. In the past, the advice to managers was generally not to measure inputs, processes, and outputs and rather only measure outcomes (Cox et al., 2012).
Respond to changing times with a changing mindset
To do this, a manager should be able to encourage teams and individuals to be creative. The new era is one of “hyperspecialization” where managers strive to develop specialist skills and encourage individuals to develop those special skills (Blatstein, 2012).
2. Strategic Thinking and Ethics: Today and Tomorrow
Leading organizations into the future is exhilarating, terrifying, and stimulating, and it is startling when we realize the infinite number of opportunities and threats that not only exist now but also may exist in the future. Watch the following video and reflect on what you have learned about strategy planning throughout this course:
Management and Organizational Fashion: Today and Tomorrow
Based on what you heard in the video, is it any wonder that decision makers are looking for tools, frameworks, structures, and models to support strategy planning? Also, have you ever wondered about new management or organizational practices that crop up and are quickly adopted throughout the business world? These new practices may be adopted by leaders as a way to move forward quickly and to stay in balance with competitors that also have adopted the new practice.
At issue, however, is whether “going along with fashion” is valuable or risky for organizations and leaders. Lang and Ohana (2012) reported on an experiment conducted in 2006 by two French engineering students. The student researchers contacted more than 100 corporate executives, scientists, and consultants to gather impressions about a new fashion that had been introduced by eminent professors from the Harvard Business School. The new practice was entitled Strategic Alignment (http://www.advancebusinessconsulting.com/advance!/strategic alignment.aspx) (SA). As part of the experiment, the SA concept had been concocted by the engineering students to investigate just how management fashions evolve.
(Source: http://www.youtube.com/watch?v=ujlfePzD77E)
Futurist Peter Schwartz and a group of thought leaders talk about the consumerization of the enterprise and how social, mobile, and local technologies are accelerating this transformation. This video includes insights from Chris Anderson, WIRED Magazine EditorinChief; Koa Shen, G.O.A.L.S. Haiti Founder; Jennifer Pahlk, from Code for America; and Peter Schwartz, Founder of the Global Business Network.
Business is Social → A Glimpse into the Future
engineering students to investigate just how management fashions evolve.
Internationalization, Social Responsibility, and Ethics: Today and Tomorrow
Earlier in this course, we explored internationalization and competitive advantage. Global competition is assured for the foreseeable future just as the trend toward social responsibility (http://www.wbcsd.org/workprogram/businessrole/previouswork/corporate socialresponsibility.aspx) is evident. Godiwalla (2012) explained that an organization has the responsibility to build upon levels of philanthropic, ethical, legal, and economic responsibility. The premise is that the basis of each of these foundational elements needs to be established first, followed by the incremental building and improvement of each. For instance, philanthropy cannot be the main priority until a certain level of economic stability and growth is seen.
In reference to the responsibilities described above, there are those who believe that “strategic management must start with a strong moral, ethical, and socially responsible core” (Godiwalla, 2012, p. 3). Special demands arise for companies deploying an internationalization strategy. Multinational enterprises (MNEs) deal with implementing business ethics and social responsibility strategies in different parts of the world. The basic premise is that the MNE must address the establishment of a common global social responsibility policy and, at the same time, tailor the policy and program to each country’s culture and social expectations.
Let’s watch the following TEDx video on Corporate Social Responsibility (CSR):
(Source: https://www.youtube.com/watch?v=jga4s0Ei7Zs)
Rethinking corporate social responsibility: Andy Le Seelluer at TEDxStHelier
As recently as a decade ago, business ethics were viewed only in the context of administrative compliance with legal standards and adherence to government rules and regulations. Today— especially since the 2001 collapse of Enron, a major organization in United States—the situation is different; attention to business ethics is on the rise across the world, and many companies are starting to realize that in order to succeed, they must earn the respect and confidence of their customers. Like never before, customers, governments, and stakeholders are demanding that corporations improve their business practices to emphasize legal and ethical behavior. Also, as demand has continued to grow for higher standards of corporate social responsibility, companies, professional firms, and individuals are being held accountable for their actions.
Andy was recently awarded an MBE for his charity work, yet he has some unusual and controversial views on Corporate Social Responsibility.
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Check Your Understanding
References
Blatstein, I.M. (2012). Strategic Planning: Predicting or Shaping the Future? Organization
Development Journal, 30(2), 32.
Cox, M. Z., Daspit, J., McLaughlin, E. and Jones III, R.J. (2012). Strat.Mgmt.: Is It an Academic
Discipline? Journal of Business Strategies, 29(1), 2728.
Godiwalla, Y. H. (2012). Business ethics and social responsibility strategies for foreign
subsidiaries. Journal of Diversity Management, 7(1), 110.
Lang, G., & Ohana, M. (2012). Are management fashions dangerous for organizations?
International Journal of Business & Management, 7(20), 8189.
Nicholson, J., & Nairn, A. (2006). 2020 vision: The manager of the 21st century. Retrieved from:
https://www.bcg.com/documents/file14724.pdf
Offshoring. (n.d.). InvestorWords.com. Retrieved from
http://www.investorwords.com/6600/offshoring.html
Strategy Planning
Module 14: Strategic Planning – Concluding Thoughts
Module Introduction
Readings
Required
Ali, A. J., & Al‐Aali, A. (2012). Corporate social responsibility in Saudi Arabia (http://search.ebscohost.com.csuglobal.idm.oclc.org/login.aspx? direct=true&db=aph&AN=84187694&site=ehostlive). Middle East Policy, 19(4), 4053.
Recommended
Ahmad, A. E. M. K. (2012). Macroenvironment Influences on Health Service Strategy in Saudi Private Sector Hospitals: An Empirical Investigation (https://csuglobal.idm.oclc.org/login? url=http://search.proquest.com.csuglobal.idm.oclc.org/docview/1039099693? accountid=38569). International Business Research, 5(5), 49.
For Your Success
This week you have your final Critical Thinking Assignment and graded quiz due. You will also participate in a Live Session hosted by your instructor.
We have identified in previous modules that the strategic management process has four basic steps: Environmental Scanning, Strategy Formulation, Strategy Implementation, and Evaluation. More importantly, strategy planning is a process by which managers decide on a set of strategies that will enable their organizations to compete while meeting stakeholders’ needs. At this point in the course, we place emphasis on designed and tested theories, models, and best practices while also looking to the future of the field.
Remember that there are resources available to consult when developing strategy choices, making decisions, and planning for implementation. The critical things to remember are:
Understand the strategicmanagement issues that are specific to organizations in the industry in
Understand the strategicmanagement issues that are specific to organizations in the industry in which your organization competes. Evaluate the external and internal factors of your organization. Demonstrate an ability to create an appropriate strategy based on an organizational assessment of your organization. Demonstrate comprehension of strategic issues surrounding modernday organizations, including your own organization.
Learning Outcomes
1. Identify the responsibilities of ethics and social programs in the context of internationalization. 2. Describe the concept of management of organizational fashion and potential perils. 3. Assess the impacts of macro trends (economic, environmental, technology, social, political,
demographic) on strategy thinking.
1. In Conclusion
As leaders and managers choose and manage strategies today, the world continues to change, forcing organizations to adapt or die. This is true in forprofit, notforprofit, and publicsector organizations. The same challenge is found in large corporations, as well as in midsized or small businesses. Wise leaders think carefully about strategy planning, its history and evolution, and proven current practices. Insightful managers rely on the basic tools of strategy analysis—resource, capability, and industry analysis—that have been proven reliable and valid. Prudent leaders emphasize data analysis and effective implementation.
(Source: https://youtu.be/slK1RbPPGqY)
The Future of Work 2.0
Tom Malone, professor at the MIT Sloan School of Management and author of the HBR article "The Age of Hyperspecialization," explains why breaking jobs into tiny pieces yields better, faster, cheaper work—and greater flexibility for employees.
1 2 3 4
2. The Future of Strategic Management
In Module 13, we looked at the changing role of managers in the 21st century. Our primary goal here is to encourage students to recognize current trends while also looking ahead, because their organization’s business environment is constantly changing and new circumstances require new strategies, including critical thinking and analyses by its managers at all levels.
Bain & Company, one of the world’s foremost management consulting companies, identified four trends driving strategic management. In the firm’s 2015 Management Tools & Trends survey of company executives, and in the subsequent report (compiled by Rigby & Bilodeau, 2015), those trends were identified as:
understanding customers.
These four trends must be placed high on the priority scale in order for organizations to compete globally. By paying attention and being proactive in addressing these four trends, leaders can strategically manage their organization for future growth and sustainability of the organization.
In Conclusion
Watch the final video featuring a leading strategist:
Click to Enlarge
(Source: https://youtu.be/7hBjdVGDIs8 )
Gary Hamel: Renowned Business Strategy and Management Thought Leader
The course has covered topics of vision, mission, goals, strategy formulation, strategy implementation, and strategy evaluation. It also covered techniques that included industry analysis, vertical and horizontal integration, and analysis of the competitive environment. Being able to understand and apply these concepts will allow you to be a better leader in your organization.
The Wall Street Journal ranked Gary Hamel as the "world's most influential business thinker" and Fortune magazine has called him "the world's leading expert on business strategy." For three consecutive years, Gary Hamel has also topped Executive Excellence magazine's annual ranking of the most sought after management speakers. Gary Hamel's landmark books, Leading the Revolution and Competing for the Future, have appeared on every management bestseller list and have been translated into more than 20 languages. His book, The Future of Management, was published by the Harvard Business School Press and was selected by Amazon.com as the "best business book of the year."
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Check Your Understanding
References
Michael Porter. (n.d.). BrainyQuote.com. Retrieved from
http://www.brainyquote.com/quotes/quotes/m/michaelpor381636.html
Rigby, D., & Bilodeau, B. (2015, June 10). Management Tools & Trends 2015. Retrieved July 28,
2015, from http://www.bain.com/publications/articles/managementtoolsandtrends
2015.aspx
