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Strategic Management & Leadership - lecture notes
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The document contains a summary of the lecture notes for the course Strategic Management & Leadership from the minor Business Administration.
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Strategic Management and Leadership Lectures Y3 – S2Lecture 1
Strategic management framework
A strategy must take account of the organization’s stakeholders if it is to succeed.
Top strategic issues of CEOs
Environmental, Social and Governance (ESG) related matters are set to become a strategic
imperative for enterprises.
Chapter 1
What is strategy?
“Competitive strategy is about being different” (Porter, 1996)
Strategy is a plan of action designed to achieve a particular goal.
Long antecedent – Sun Tzu The Art of War (500 BC). In Greek strategia (generalship)
- Strategy (in military thought) is about decisions that:
• Are important
• Involve a significant commitment of resources
• Are not easily reversible
- Tactics…?
,• Strategy: overall plan for deploying resources to establish a favourable position
(concerned with winning the war)
• Tactics: a scheme for a specific action (manoeuvres necessary to win battles)
Yet, no general theory of strategy.
Strategy contextualized
What is business strategy?
Determination of the long-run goals and objectives of an enterprise, and the adoption of
course of action and the allocation of resources necessary for carrying out these goals
(Chandler, 1962).
Unless structure follows strategy, inefficiency results. (Chandler, 1962)
What is business strategy?
An organizational’s strategy is the match between its internal capabilities and external
relationships (Kay, 1993).
- Internal: what the organization is capable of doing
- External: its relationship with employees, customers, shareholders, and suppliers.
The use of analytical techniques allows the firm to influence its position in the market.
Porter on business strategy
“…the root of the problem is the failure to distinguish between operational effectiveness and
strategy…
…bit by bit, almost imperceptibly, management tools have taken the place of strategy…
…as managers push to improve on all fronts, they move farther away from viable
competitive positions…
…operational effectiveness is about performing similar activities better…
,…strategic positioning means performing similar activities in different ways (to deliver
unique mix of value…”
What is business strategy?
… the direction and scope of an organization over the long term which achieves advantages
for the organisation through its configuration of resources within a changing environment
and to fulfil stakeholder expectations (Johnson & Scholes, 2002).
(Complex, uncertainty, integrated, relationships, change)
Strategy is NOT
CRAP analysis
• CReating
• Artificial
• Plans
…throwing random ideas into the arena that are not properly thought through with
supporting techniques!
“The essense of strategy is choosing what not to do” (Porter)
Why do firms need strategy?
• Enhances quality of decision-making
• Facilitating coordination (consensus)
• Focusing organizations on the pursuit of long-term goals (strategic intent)
Whats is strategic management?
• The process of creating a strategy is called strategic management
• Strategic management consists of:
• Strategy analysis
• Strategy formulation
• Strategy implementation
, Strategy analysis (position)
• Strategy analysis is a useful starting point for crafting strategy
• It includes the general and competitive environment facing the organization. It also deals
with the organization’s internal environment.
• Strategic analysis helps the organization evaluate how well it is positioned to exploit
external opportunities.
The strategy checklist – position
Strategy analysis
• What are the environmental opportunities and threats?
• What are the organization’s strengths and weaknesses?
• What is the basic purpose of the organisation?
• How does culture fit the strategy?
Strategy formulation (choices)
• Strategy formulation usually takes place at the business and corporation level
• Strategic analysis is important for strategy formulation. So too is creative insights which
synthesize experiences that exist within the organization to form a novel strategy.
• An organization is seldom faced with only one strategy which means it is necessary to
evaluate competing strategies.
The strategy checklist – choices
Strategy formulation
• How should business units compete?
• Which businesses to include in a portfolio?
• Where should the organisation compete internationally?
• Is the organisation innovating appropriately?
• Should the organisation buy other companies, ally or go it alone?
Types of strategy
• Corporate strategy is concerned with which markets an organization wants to compete
in (where (to grow)). The choices the organization takes about the business it chooses to
be in.
• Business strategy deals with how an organization will compete in its chosen industry or
market (how). The decisions the organization takes to secure the best position to deliver
the corporate strategy.
• Functional (or operational) strategy occurs according to functional lines such as R&D,
marketing and finance (what).
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