Summary
Strategic Management, Leadership and
Organization
HPI4008
Case 1 – Strategic management ..........................................................................................................2
Case 2 – Professionalism .....................................................................................................................9
Case 3 – Organizational Change ........................................................................................................ 15
Leadership ........................................................................................................................................ 20
1
,Case 1 – Strategic management
- Strategy, strategic management, and competitive advantage
- (Inter-) organizational strategies
- Formulation of strategies and leadership
- Fit between internal and external environment
- Contingency theory and Resource dependence theory
LG 1: What is strategy, strategic management, and competitive advantage?
Strategy = A plan for interacting with the competitive environment to achieve organizational goals
and to be better than our competitors
- What leaders want to do with an organization in the future
- A deliberate, purposeful behaviour (and allocation of resources) that allows a firm to plan
decisions, maximize opportunities while minimizing threats, and achieve the organizational
mission
- Strategy leads to a better understanding of the chain of cause and effect and it’s is ultimately
about making better decisions
- Strategy concerns the organization and the environment, it should be flexible enough to
accommodate the changing environment but significant enough to sustain competitive
advantage
- Strategies must challenge existing assumptions and be open to new possibilities (managers
must be aware of new realities to manage change effectively)
Management
- Different types →
- Multiple ways to use, e.g. a different in perspective as
management can be seen as an organizational level or as a
time-effect hierarchy.
Strategic management = a process and the outcome is a strategy. It
involves the creation, implementation, monitoring and overall
direction for a firm in the quest for competitive advantage.
- Strategic management is a dynamic, iterative, and cyclic process of:
1. Goal formulation 4. Strategy evaluation
2. Environmental scanning 5. Implementation
3. Strategy formulation 6. Strategic control
- As every organization is positioned in an external environment, strategic management
requires both internal and external management functions:
o Internal – participation of employees and leaders, integration of strategy into mission,
vision and goals, organizational mechanisms, cultures and resources to support
implementation
o External – anticipating on possible changes, maintaining competitive advantage
Competitive advantage = refers to a situation where one firm is able to perform better than its rivals
/ the organization is best in delivering what the customer wants in that field.
- Maintain/reach competitive advantage → dynamic strategic fit between the external
environment and internal resources
- Strategy is required to obtain competitive advantage
2
, - Competitive advantage in healthcare is different for For-Profit organizations than for Not-for-
Profit organizations. For-Profit organizations like pharmaceutical organizations apply a win-
lose perspective and want to obtain a strategic advantage – this may lower organizational
profits and the quality of the service and lead to a redundancy of services. Contrastingly, Not-
for-Profit organizations often prioritize collaboration
LG 2: Which types of (inter-) organizational strategies exist, how do they differ from
one another, and which fit with the strategic options described in the case?
IOR strategies
Interorganizational relationships (IORs) are relatively enduring transactions, flows, and linkages that
occur among or between an organization and one or more organizations in its environment (Oliver,
1990) - specifically refers to the environment (resource dependency, link to other organizations)
An inter-organizational relationship (IR) occurs when two or more organizations transact (or -
exchange) resources (money, physical facilities and materials, customer or client referrals, technical
staff services) among each other. It can be temporary or long-lasting.” (Van de Ven, 1976)
IORs / networks are based on the ‘in between’ of the make or by decision - the in between market and
hierarchy. In networks the communication is very rational as complementary strengths of the
organizations that partner up are combined. It’s collaborating to obtain a certain goal.
Different types of IORs, these can be categorized according to:
- Tightness of coupling / the degree of coupling
- Direction – horizontal (with competition) vs. vertical (along value chain) coupling
Types of IOR strategies:
IOR form Coupling Description
Joint Venture Tight An organization resulting from other organizations (parents) – A + B = C. This is
formally independent but the parents will have some control and share risk and
cost associated with large projects or innovations.
Network Tight Constellations of businesses that organize through the establishment of social
and interdependent relations
Consortia Tight Specialized joint ventures encompassing many different arrangements. Consortia
are often grouping of firms oriented towards problem solving and technology
development
Alliance Loose An arrangement between two or more firms that establishes an exchange
relationship but has no joint ownership involved.
Trade Loose Organizations (typically non-profit) that are formed by firms in the same industry
Association to collect and disseminate trade information, offer legal and technical advice,
furnish industry-related training, and provide a platform for collective lobbying.
Interlocking Loose When a director or executive of firm A sits on the board of firm B, or when
Directorate directors of C also serve the board of firm D. Leads to interfirm information
sharing and cooperation
Cooptation When leaders from important sectors in the environment are made part of an
organization (e.g. influential costumers)
Ownership When an organization buy a part of (or a controlling interest of) another company.
Even more control by acquisition of the other company or a merger
Formal Strategic When setting up legal and binding relations with another firm by contracts
Alliances (licence agreements or supplier arrangement) and joint ventures
Executive Transferring or exchanging executives e.g. between government and private
Recruitment industry
3
, Advertising and Advertisement is used to obtain favourable relationships, especially in highly
Public Relations competitive consumer industries. Public relations is similar but the stories are
often free and aimed at public opinion, attempting to shape the company’s image
in the minds of customers, suppliers and government officials
Complete More about hierarchy, but can also mean working in a chain like dentists in the
ownership Netherlands
Why do IORs exist?
Barringer & Harrison – Interorganizational relationships are thought to help firms create value by
combining resources, sharing knowledge, increasing speed to market, and gaining access to foreign
markets. Thus, IORs benefit the organizations, help them to be more competitive, and can function as
an instrument to achieve a goal (e.g. HC organization partnering with a tech company to become more
technically advanced). Additionally, there are theoretical explanations for the existence of IORs,
applicable to HC (listed from more economic to more behavioural):
- Resource Dependence – (more in LG 5) every organization depends on resources, some owned
by external environment. Therefore, set up relations to:
o Decrease dependency on others - gain some control (or at least access) over the resources
o Increase dependency on ‘you’ – obtain control over resources and increase dependency of
other organizations
▪ Create interdependence e.g. by forming linkages / IORs or shaping the environmental
domain
- Stakeholder theory of the firm – organizations at the centre of a network or stakeholders, the
stakeholders claims are considered in decision making, this can help to achieve the company’s
objective and reduce environmental uncertainty. A limitation is that stakeholder relationships
are constantly at risk.
- Institutional theory (particularly in the normative pillar / more in case 2) – due to institutional
pressure to meet social norms IORs are formed to gain legitimacy and survive.
Success rate of IORs
Many IORs (50 – 70 %) fall short of meeting these expectations and fail as setting up an IOR takes time,
adaption, and investment to work. Thus, think about the potential advantages and disadvantages of
IORs:
Potential Advantages IORs Potential Disadvantages IORs
Gain access to a particular resource Loss of proprietary information
Economies of scale (due to bigger scale) Management complexities
Risk and cost sharing Financial and organizational risks (due to high failure
rate of IORs)
Gain access to a foreign market Risk becoming dependent on a partner
Product and/or service development Partial loss of decision autonomy
Learning (e.g. option to do more research (due to Partners’ “cultures” may clash
more researchers)
Speed to market Loss of organizational flexibility
Flexibility (having an in-between) Antitrust implications (mistrust)
Collective lobbying (more influence due to bigger
scale)
Neutralizing or blocking competitors
Organizations additionally have other ways than IORs to try to control the environment, for instance a
change of domain, political activity/regulation or illegitimate activities.
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