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Summary Strategic Management 344 Notes
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Strategic Management 344Chapter 1
The nature of Strategic Management
DopeNotes
,Introduction
• When thinking strategically about their organisation’s current situation and
future prospects in a competitive landscape, management is faced with four
critical questions
o Where are we now?
§ Management should consider an organisation’s:
• Competitive positioning
• Resources and dynamic capabilities
• Environmental integrity
• Current performance
o Where do we want to go?
§ This refers to the strategic direction that management believes
the organisation should adopt
o How will we get there?
§ The answer to this question depends on
• How strategy is formulated at different organisational
levels
• The influence of leadership values, organisational culture,
and organisational architecture on strategy
implementation
o How are we doing?
§ To answer this question requires that strategic leaders manage
the performance of the organisation by means of strategic
control measures and appropriate feedback
The Essence of Strategy
1. Strategy conceptualised
• Strategy can be regarded as a game plan indicating the choices a manager
needs to make
• Strategy can also be viewed as “the direction and scope of an organisation
over the long-term, which achieves advantage for the organisation through its
configuration of resources within a changing environment and to fulfil
stakeholder expectations
2. The historical origins of the concept of strategy
• Strategy derives from the Greek word strategos, meaning “a general”
o Strategos, in turn, derives from stratos (the army) and agein (to lead)
• Strategic decisions share common characteristics
o Strategy is concerned with long-term direction and sustainable success
o Strategy exploits the links between the internal and external
environments
o Strategies require major resources
o Strategies are likely to affect the whole organisation
DopeNotes
, o Strategies are shaped by the values by the values and expectations of
stakeholders
o Strategies are directed by vision
3. Strategy development in the 20th and 21st centuries
Period 1950s 1960s – Late 1970s – Late 1980s – 2000s 2010s
early mid-1980s 1990s
1970s
Dominant Budgetary Corporate Positioning Competitive Strategic and Competitive
theme planning planning advantage organisational advantage that
and control innovation is sustainable
Main Financial Planning Selecting Focusing Reconciling size Focusing on
issues control growth, industries and strategy with flexibility -Value
through especially markets around and innovation
operational diversificati Positioning for sources of responsiveness -Sustainability
and capital on and market competitive -Stakeholder
budgeting portfolio leadership advantage engagement
planning New -Winner-takes-
business all markets
development
Principal -Financial -Business -Industry -Resources -Cooperative -Value
concepts budgeting forecasting analysis and strategies innovation
and -Investment -Corporate -Segmentation capabilities -Competing for -Stakeholder
technique planning planning -Experience -Shareholder standards engagement
-Project techniques curves value -Complexity and -Governance
appraisal -Synergy -PIMS analysis -Knowledge self-organisation and ethics
-SBUs management -Corporate
-Portfolio -Information social
planning technology responsibility
DopeNotes
, The Nature and Role of Strategy
1. The five Ps of strategy (Mintzberg)
• It is NB to highlight the relationship between strategy as a plan and strategy
as a perspective
o As a plan, strategy has traditionally been viewed as something an
organisation “has”
o As a perspective, strategy is seen as something that people in an
organisation “do”
• The practice of strategy is influenced by the extra-organisational practices of
an organisation and its wider social fields and the intra-organisational
practices of people in the organisation and their activities
• The five Ps of strategy are as follows:
o Strategy as a plan provides overall direction and a course of action
§ Strategy formulation is a formal process of conception
implemented through organisational layers, structure, and
control systems
§ This approach seeks to attain a match or strategic link between
the internal organisational capabilities and external
opportunities, forming the basis of the sustainable resource-
based and dynamic capabilities perspective
§ This has been criticised as being too rational, top-down
management approach, and for not being realistic enough
o Strategy as a position
§ Concerns the determination of particular products in particular
markets as supported by Porter
§ As a position, strategy looks downwards and outwards
§ The focus is on an outside-in perspective
o Strategy as a perspective
§ Refers to the organisation’s way of doing things, and is also
called the interpretative view or experience
§ As a perspective, strategy looks inside the organisation and
“upwards” toward the strategic purpose, intent, and direction of
the organisation
§ The focus is on an inside-out perspective
o Strategy as a ploy
§ Is a specific manoeuvre to outwit a competitor
o Strategy as a pattern
§ Concerns consistent behaviour over time
§ Strategy needs to be planned
• This is called an intended strategy as it looks ahead
• Strategies might also evolve out of the past (realised
strategies)
• Intended strategy is the strategy envisioned by top
management and is achieved by managers shaping and
reshaping strategies as circumstances dictate
DopeNotes
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