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Summary Strategy - An international perspective 6th edition
Samenvatting van het boek Strategy - An international Perspective van Bob de Wit. 6e editie. Hoofdstukken 1 tm 12 (exclusief readings)
[Meer zien]Voorbeeld 4 van de 43 pagina's
Voorbeeld 4 van de 43 pagina's
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Voorbeeld van de inhoud
1. IntroductionIdentifying the strategy issues
Strategizing, missioning and visioning
Strategizing: the cognitie processes of indiiidual strategists.
Organizatons exist to fulfl a purpose and strategies are employed to ensure that the organizatonal
mission and iision are realized. Some people argue that it is the business of business to make money.
In their iiew, frms are owned by shareholders and therefore should pursue shareholders’ interests.
And it is the primary interest of shareholders to see the ialue of their stocks increase. On the other
hand, others belieie that companies exist to serie the interests of multple stakeholders. In their
opinion, haiing a fnancial stake in a frm should not giie shareholders a dominant positon to other
groups.
Strategy dimensions: content, process and context
There are three dimensions of strategy that can be recognized in eiery real-life strategic problem
situaton:
Strategy content. The combined decisions and choices the lead a company into the future;
Strategy process. The manner in which strategies come about;
Strategy context. The set of circumstances under which both the strategy content and the
strategy process are determined.
Strategy content; Business, corporate and network level
Strategy issues at functinal level refer to questons regarding specifc functonal aspects of a
company (operatons, marketng, etc.). Strategy at the business level requires the integraton of
functonal leiel strategies for a distnct set of products andoor seriices intended for a specifc group
of customers. Ofen companies only operate in one such business, so that this is the highest leiel of
aggregaton within the frm. Howeier, there are also many companies that are in two or more
businesses. In such companies, a mult-business or cirpirate level strategy is required, which aligns
the iarious business leiel strategies. Firms ofen cluster together into groups of two or more
collaboratng organizatons. This leiel is referred to as the mult-company or netwirk level.
Strategy process: forming, changing and innovating
Usually a split is made between the strategy analysis stage, the strategy formulaton stage and the
strategy implementaton stage. In the analysis stage, strategists identfy the opportunites and
threats in the eniironment, as well as the strengths and weaknesses of the organizaton. ext, the
formulaton stage, strategists determine which strategic optons are aiailable to them, eialuate each
and choose one. Finally, in the implementaton stage, the selected strategic opton is translated into
a number of concrete actiites.
Strategy context: industry, organizational and international
Some people argue or assume that the strategy context has a dynamic all on its own, which
strategists can hardly infuence, and therefore that strategy context sets strict confnes on the
freedom to manoeuire. Other belieie that strategists should not be driien by the context, but haie
a large measure of freedom to set their own course of acton. It is argued that strategizing managers
should create their own circumstances.
1
,Structuring the strategy debates
Strategy tensions as both/and problems
In general, there are two fundamentally diferent kinds of problems, ‘eitheroor problems’ and
‘bothoand problems’. Eithero or problems are:
Puzzles. Challenging problem with optmal soluton;
Dilemmas. Vexing problem with two possible solutons, neither of which is logically the best;
Botho and problems are:
Trade-ofs. Many possible solutons, each striking a diferent balance between 2 confictng
pressures;
Paradoxes. Situaton in which 2 seemingly contradictory or eien mutually exclusiie factors
appear to be true at the same tme. Has no real solutono no way to logically integrate to
opposites
Managing strategy paradoxes
aiigatng. Focusing on one contrary demand at a tme. in this case the paradox is managed
oier tme by a series of contrary initaties;
Parallel processing. Separatng the contrary demands in diferent internal or external
organizatonal units. Ofen, the diferentated demands are then integrated at a diferent –
usually higher – organizatonal leiel;
Balancing. Also referred to as dynamic equilibrium. Managing opposite demands by trading
of elements of the opposing demands and blending the most appropriate balance. The
strategist choses consttutng elements of each demand to create a company-specifc balance
that can change based on circumstances;
Juxtaposing. Simultaneously managing opposite demands on a permanent basis (requires
dynamic capabilites);
Resoliing. Deieloping a new synthesis between competng demands of by exploitng the
tension. Deieloping a noiel synthesis creates a new balance between contrary elements that
will sustain for some tme, but will eientually be replace by a new one;
Embracing. The confict between two opposites is not only accepted, but actually exploited
to beneft from the innoiatie power of tensions.
2. Strategizing
Introduction
A strategic problem is a set of circumstances requiring a reconsideraton of the current course of
acton, either to proft from obseried opportunites or to respond to perceiied threats.
Strategic reasoning: a string of strategic thinking actiites directed at defning and resoliing strategic
problems.
The issue of strategic reasoning
A short oieriiew of the capabilites and limitatons of the human mind will help us to understand the
issue of strategic reasoning. The human ability to know is referred to as ‘cogniton’. Strategists need
to engage in cignitve actvites (applicaton leielo mental reasoning). These cognitie actiites need
to be structured into a strategic reasoning process. Howeier, the brain is stll physically strictly
limited to cignitve abilites (hardware leielo mental facultes). To deal with its inherent physical
shortcomings, the human brain copes by building simplifed models of the world, referred to as
cignitve maps (operatng system leielo mental model).
2
,Cognitive activities
A general distncton can be made between cognitie actiites directed towards defning a strategic
problem, and cognitie actiites directed at soliing a strategic problem. Each of these two can be
further split into two leading to the following general elements of a strategic reasoning process:
Identfying. Before strategists can beneft from opportunites, they must be aware of these
challenges and acknowledge their importance. What is a problem?;
Diagnosing. To grapple with a problem, strategist must try to understand the structure of the
problem and its underlying causes. What is the nature of the problem?;
Conceiiing. To deal with a strategic problem, strategists must come up with a potental
soluton. How should the problem be addressed?;
Realizing. Strategists must carry out problem-soliing actiites and eialuate whether the
consequences are positie. What actons should be taken?
Strategists do not always reason in this step-by-step fashion.
Cognitive abilities
The limitaton to human’s cognitie abilites is largely due to three factors:
Limited informaton sensing ability. Much of the reality remains unobseriable. The human
senses cannot directly identfy the way the world works and the underlying causal
relatonships;
Limited informaton processing capacity. Humans do not haie unlimited data processing
abilites. For this reason, humans hardly eier think through a problem with full use of all
aiailable data, but necessarily make extensiie use of mental shortcuts, referred to as
‘cognitie heuristcs’ (mental rules of thumb);
Limited informaton storage capacity. People haie a limited capacity for storing informaton.
Therefore, people must store informaton iery selectiely and organize cognitie heuristcs at
play – rules of thumb make the memorizaton process manageable in the face of seiere
capacity limitatons.
To deal with these seiere physical limitatons, the brain has come up with more than only simple
cognitie heuristcs cognitie maps.
Cognitive maps
Knowledge that people haie is stored in their minds in the form of cognitie maps. These maps are
representatons in a person’s mind of how the world works; refectons of a person’s belief about the
importance of the issues and about the cause and efect relatonship between them. A person’s
cognitie map will focus atenton on partcular phenomena, while blocking out other data as noise,
and will quickly make clear how a situaton should be perceiied. In this way, a cognitie map
proiides an interpretie flter screen. Furthermore, cognitie maps help to direct behaiior by
proiiding an existng repertoire of problem-soliing repossess from which an appropriate acton can
be deriied. People formulate implicit models and draw conclusions, but do so largely unconsciously.
In this way, cognitie maps eiolie without people themselies being entrely aware of their own
cognitie map.
An indiiidual’s cognitie map will be a complex combinaton of elements taken from diferent group-
leiel dominant logics. Shared group beliefs remain largely tacit. The shared cognitie map of a group
is literally common sense.
3
, Th downside of cognitie maps is that they exhibit a high leiel of rigidity. People are generally not
inclined to change their minds. For strategists, cognitie rigidity is partcularly worrying. They must
haie the ability to challenge current beliefs and to change their own minds.
The paradox of logic and intuition
There is a broad understanding that managers need to employ both logical and intuitie thinking.
Intuiton can giie a rich assessment of qualitatie informaton. For strategists a fundamental queston
is how they can aioid getng stuck with an outdated cognitie map. On the other hand, strategists
must haie the ability to engage in intuitie thinking (thinking beyond current mental models).
The demand for logical thinking
All the key assumptons on which a strategist’s cognitie map are based need to be reiiewed,
refected and tested. Strategists must be capable for making their tacit beliefs more explicit, so that
the ialidity of these mental models can be eialuated an further refned. Assessing the ialidity of a
cognitie map requires strong logical thinking. Logical thinking can be characterized as conscious and
rigorous, based on formal rules.
The demand for intuitive thinking
The intuitie thinking pursues an informal and holistc judgement process. The power of using the
unconsciously stored informaton is that it connects many iariables to another into a whole. Ofen
logic is used aferwards to justfy an understanding that was actually generated by intuitie means.
Perspectives on strategizing
The analytic reasoning perspective
At one end of the spectrum, there are those who argue that strategizing should be a predominantly
conscious analytc process, requiring logic. This point of iiew is referred to as the analytc reasoning
perspectie. The analytcal reasoning perspectie is depicted as a step-by-step process. Howeier,
strategists are not all knowing and do make mistakes (bounded ratonality). The bounded ratonal
strategist must sometmes improiise to make up for a lack of informaton, but will try to do this as
logically as possible. By consistent alignment of mental models with empirical reality can the
strategist aioid the danger of becoming stuck with an outdated cognitie map.
The holistic reasoning perspective
At the other pole, there are those who argue that strategizing is mainly an unconscious holistc
process, requiring initaton the leading thinking style. This point of iiew will be referred to as the
holistc reasoning perspectie. Strategists must be able to use their intuiton to imagine preiiously
unknown solutons. Some analyses can be done, but as the deielopments of many factors are
susceptble to fundamental uncertainty, ultmately the strategist will haie to intuitiely judge which
iision for the future has the best chance of being created in reality.
Managing the paradox of logic and intuition
Navigating
Applying logic and intuiton at the same tme is complex because it requires diferent thinking models
and procedures. To deal with these contrastng needs, some authors haie suggested ‘build in mental
tme-outs’ in daily routnes to allow creatie ideas to incubate.
Parallel processing
ot all organizatonal actiites need the same leiels of logic and intuiton. By organizing the
company’s actiites in separate units or departments, strategizing managers also allocate people
with the required competencies and diferent thinking styles separately.
4
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