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Summary of the examination substance for Strategic Management 2021/2022
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A summary of Bob de Wit's book 'Strategy', 7th edition. Includes notes of knowledge clips and additional literature
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ContentsKnowledge clip – Strategy & Strategic Management .................................................................................................. 2
Knowledge clip – Dimensions of Strategy & Strategizing ........................................................................................... 4
Knowledge clip – Missioning and Visioning ............................................................................................................... 5
Knowledge clip – Strategic Innovation ........................................................................................................................ 7
Knowledge clip – The Organizational Context .......................................................................................................... 10
Knowledge clip – Business-level strategy .................................................................................................................. 13
Knowledge clip – Network Level Strategy ................................................................................................................ 16
Chapter 1 – Introduction............................................................................................................................................. 19
Reading 1.1 – Complexity: The nature of real-world problems ............................................................................. 21
Reading 1.2 – Managing strategic contradictions .................................................................................................. 23
Chapter 2 – Strategizing ............................................................................................................................................. 25
Reading 2.1 – Explicating dynamic capabilities – The nature and micro foundations of (sustainable) enterprise
performance ........................................................................................................................................................... 26
Reading 2.2 – Exploring intuition and its role in managerial decision making ..................................................... 26
Reading 2.3 – Psychological foundations of dynamic capabilities: Reflexion and reflection in strategic
management ........................................................................................................................................................... 28
Chapter 3 – Missioning and visioning ........................................................................................................................ 29
Reading 3.1 – The social responsibility of business is to increase its profits ......................................................... 31
Reading 3.2 – Stockholders and stakeholders: A new perspective on corporate governance ................................ 31
Reading 3.3 – Creating shared value: How to reinvent capitalism and unleash a wave of innovation and growth31
Chapter 4 – Business level strategy ............................................................................................................................ 32
Reading 4.1 – Strategy from the outside in ............................................................................................................ 34
Reading 4.2 – Firm resources and sustained competitive advantage ..................................................................... 35
Reading 4.3 – Dynamic capabilities: An exploration of how firms renew their resource base .............................. 36
Chapter 6 – Network level strategy ............................................................................................................................ 37
Reading 6.1 – Collaborate with your competitors – and win ................................................................................. 40
Reading 6.2 – Creating a strategic center to manage a web of partners ................................................................. 40
Chapter 9 – Strategic innovation ................................................................................................................................ 41
Reading 9.2 – The innovator’s dilemma ................................................................................................................ 44
Chapter 11 – The organizational context .................................................................................................................... 45
Reading 11.1 – Strategy as order emerging from chaos ......................................................................................... 47
Reading 11.2 – Structured networks: Towards the well-designed matrix .............................................................. 47
Mintzberg – Strategy Safari, chapter 1 ....................................................................................................................... 48
Hamel and Prahalad – Strategy as Stretch and Leverage ........................................................................................... 49
Kim and Mauborgne – Value Innovation: The Strategic Logic of High Growth ....................................................... 50
1
,Knowledge clip – Strategy & Strategic Management
What is strategy?
- Chandler: the determination of the long-run goals and objectives of an enterprise and the
adoption of courses of action and the allocation of resources necessary for carrying out these
goals.
- Porter: competitive strategy is about being different. It means deliberately choosing a different
set of activities to deliver a unique mix of value.
- Drucker: a firm’s theory about how to gain competitive advantages.
- Mintzberg: a pattern in a stream of decisions.
Strategy is the direction and scope of an organization over the long term which achieves advantage for
the organization through its configuration of resources and capabilities within a changing environment to
meet the needs of markets and to fulfill stakeholder expectations.
Ten schools of strategy:
1. A design: design, a process of conception.
2. A plan: planning, a formal process.
3. A position: positioning, an analytical process.
4. A vision: entrepreneurial, a visionary process.
5. A perception: cognitive, a judgmental process.
6. A pattern: learning, an emergent process.
7. An agenda: power/political, a process of negotiation.
8. A belief: cultural, a collective process.
9. A response: environmental, a reactive process.
10. A stage: configuration, a process of transformation.
Strategy as a plan:
- Specify future choices.
- Made in advance of action.
- Calculated towards achieving objectives.
- Conscious and purposeful.
Strategy as a pattern:
- Without preconception.
- Driven by actions; not design.
- Consistency in behavior (whether or not intended).
Strategy as a position:
- A match between organization and context.
- A unique place in the environment: a niche.
- Beat competition or avoid direct competition.
Strategy as a perspective:
- Collective concept.
- A world view.
- Intensely shared.
- The ‘character’ of an organization.
2
,Deliberate strategizing: the ability of acting intentionally; so, thinking before acting.
Strategy emergence: the ability of thinking and acting at the same time and letting strategy emerge.
Advantages of deliberate strategizing:
- Direction: without plans and objectives organizations would be adrift.
- Commitment: plans enable early commitment to a course of action.
- Coordination: plans have the benefit of coordinating all strategic initiatives within a firm to a
cohesive pattern.
- Optimization: plans facilitate optimal resource allocation.
- Programming: plans are a means for programming all organizational activities in advance.
Advantages of strategy emergence:
- Opportunism: organizations must keep an open mind to grab unforeseen opportunities.
- Flexibility: organizations must keep their options open and not commit themselves too early.
- Learning: the best way to find out what works is to give it a try.
- Entrepreneurship: different people in the organization will have different ideas.
- Support: getting things done in firms includes understanding political and cultural dynamics.
Benefits of strategic management:
- Ties the organization together with a common sense of purpose and shared values.
- Provides the organization with a clear self-concept, specific goals, and guidance.
- Helps managers understand the present, think about the future, and recognize the signals that
suggest change.
- Requires managers to communicate both vertically and horizontally.
- Improves overall coordination within the organization.
- Encourages innovation and change within the organization to meet the needs of dynamic
situations.
Strategies for better…and for worse:
1. Strategy sets direction.
a. Chart a course, create and maintain cohesion.
b. Wrong direction.
2. Strategy focuses effort.
a. Promotes coordination and reduces disorder.
b. No peripheral vision, ‘groupthink’.
3. Strategy defines the organization.
a. Captures essential meaning and creates shared identity.
b. Loss of richness, stereotyping.
4. Strategy provides consistency.
a. Reduces ambiguity and explains the world.
b. Can reduce creativity and simplify to the point of distortion.
3
, Knowledge clip – Dimensions of Strategy & Strategizing
Dimensions of strategy:
- Strategy context: conditions surrounding strategy activities. where.
- Organizational purpose: impetus for strategy activities (input). why.
- Strategy process: flow of strategy activities (throughput). how.
- Strategy content: result of strategy activities (output). what.
Limits of strategy:
- Complexity: wicked problems.
- Contradictory interests
- Surprises
Characteristics of wicked problems:
- Interconnectedness: strong connections link each problem to other problems.
- Complicatedness: wicked problems have numerous elements with relationship among them,
including feedback loops.
- Uncertainty: wicked problems exist in a dynamic environment.
- Ambiguity: wicked problems can be seen in different ways and there is no single ‘correct view’.
- Conflict: there is often a need to trade-off ‘goods’ against ‘bads’.
- Social constraints: social, organizational and political constraints.
Perspectives on strategizing:
- Analytic reasoning perspective:
o Strategic reasoning is predominantly ‘logical’ – scientific.
o Requires well-developed analytical skills.
o Argues that emotion and intuition have a small place in the strategic reasoning process.
- Holistic reasoning perspective:
o Logic is important but strategic problems are open to interpretation from a limitless
variety of angles.
o No fixed set of solutions to choose from.
o Strategists must be able to use their intuition to imagine previously unknown solutions.
o Strategists need to trust the unconscious mind.
Analytical reasoning perspective Holistic reasoning perspective
Emphasis on Logic over creativity Intuition over logic
Dominant cognitive style Analytic Holistic
Thinking follows Formal, fixed rules Informal, variable rules
Nature of thinking Deductive and computational Inductive and imaginative
Mode of thinking Structured Unstructured
Direction of thinking Vertical Lateral
System at work Conscious, reflective Unconscious, reflexive
Problem solving seen as Analyzing activities Sensemaking activities
Value placed on Cold cognition Hot cognition
Assumption about reality Objective, (partially) knowable Subjective, (partially) creatable
Thinking hindered by Incomplete information Adherence to current cognitive map
Strategizing speed Slow Fast
Strategizing based on Calculation Judgement
Metaphor Strategy as science Strategy as art
4
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