BA Business Strategy
katrinananana
lecture__9_strategic_development_processes.pptExploring Business Strategy (247SAM)
Lecture 9 Strategy Development Processes
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Update
Where are we now?
Learning outcomes
- Understand what is meant by deliberated and emergent strategy development.
- Identify deliberated processes of strategy development in organisations.
- Identify processes that give rise to emergent strategy development.
- Be aware of different process of strategy development in different contexts.
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How do strategies actually develop?
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Deliberate strategy development
Level of strategy management:
- Senior management;
- Middle management;
- Operational management
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Deliberate strategy development
- Deliberated strategy involves intentional formulation or planning by managers.
- This may be the result of…
- Strategic leadership,
- Strategic planning systems, or
- The external imposition of strategy.
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Deliberate strategy development as the results of
Strategic leadership-Jigsaw Puzzle?
| Mark Zuckerberg | Face book | |
| Ingvar Kamprad | ||
| Richard Branson | Tata group | IKEA |
| Michael O’Leary | Ryanair airline | |
| Ratan Tata | Virgin Group | |
| Jack Ma | Alibaba.com |
Strategy may be the deliberate intention of a leader.
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How strategic leadership is demonstrated
Deliberate strategy development as the results of
Strategic planning systems
Strategic planning systems take the form of systematised, step-by-step, procedures to develop an organisation’s strategy, e.g.,
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Strategic planning systems
The role of strategic planning
Strategic planning may play several roles within an organisation:
Formulating strategy: a means by which managers can understand strategic issues.
Learning – a means of questioning and challenging the taken-for-granted.
Co-ordinating business-level strategies within an overall corporate strategy.
Communicating intended strategy and providing agreed objectives or strategic milestones.
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Potential benefits and dangers of strategic planning
Table 12.1 The potential benefits and dangers of strategic planning
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Deliberate strategy development as the results of
Externally imposition of strategy
Strategies may be imposed by powerful external stakeholders:
Government can determine strategy in public sector organisations (e.g. police).
Government can shape strategy in regulated industries (e.g. utilities of tel, of gas, of com)
Multinational companies may have elements of strategy imposed (e.g. forming local alliances).
Business units may have their strategy imposed by head office (e.g. part of a global strategy).
Venture capital firms may impose strategy on companies they buy into.
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Emergent strategy development
An emergent strategy comes about through a series of decisions - a pattern which becomes clear over time:
…not a ‘grand plan’, but a developing pattern in a stream of decisions.
The essence is not a controlled but learning process!!!
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Emergent strategy development
Figure 12.2 A continuum of emergent strategy development processes
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Emergent strategy development as the outcome of
Logical incrementalism (1)
Logical incrementalism is the development of strategy by experimentation and learning – from partial commitments rather than through formulations of total strategies.
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Logical incrementalism (2)
Four characteristics of logical incrementalism:
Environmental uncertainty – constant scanning of the environment and adapting to change.
General goals – avoiding too early commitment to specific goals.
Experimentation – ‘side bet’ ventures to test out new strategies.
Co-ordinating emergent strategies – drawing together an emerging pattern of strategy from subsystems.
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Learning organisation
Logical incrementalism emphasises on learning and it is a view of strategy development which corresponds to the learning organisation.
Learning organisation – an organisation that is capable of continual regeneration from the variety of knowledge, experience and skills within a culture that encourages questioning and challenge.
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Emergent strategy development as the outcome of
Political processes
- The political view of strategy development is, that strategies develop as the outcome of bargaining and negotiation among powerful interest groups (or stakeholders).
- It is bargaining and negotiation that give rise to strategy rather than careful analysis and deliberate intent
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Emergent strategy development as the outcome of
Continuity
- Strategies emerge as …
- Managed continuity
- Path-dependent strategy development
- Organisation culture and strategy development
Emergent strategy development as the product of
Organisational systems
- Strategy development as the outcome of managers making sense of and dealing with strategic issues by applying established ways of doing things.
- Strategy development is influenced by the systems and routines with which managers are familiar in their particular context.
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Challenges for managing strategy development
- Multiple strategy development processes – most organisations will develop strategy involving several approaches.
- There is no one right way to develop strategy but the context can be important.
- Organisational ambidexterity – exploiting existing capabilities while exploring new capabilities.
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Organisational context
Strategy development processes will differ according to context:
Organisational characteristics differ – in size, technology and diversity.
The nature of the environment differs – it may be stable or dynamic; simple or complex.
Life cycle effects – development processes will evolve and change over the life cycle.
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Strategy development contexts
Figure 12.5 Strategy development contexts
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Strategy development routes
Figure 12.6 Strategy development routes
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