Strategic management practices @ bec doms


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Strategic management practices @ bec doms

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  • This session will be a review of key points of the first two semesters subject matter, as a lead into this semesters strategy themes.
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  • Strategic management practices @ bec doms

    1. 1. Strategic Management in Practice
    2. 2. Strategy Development <ul><li>The Three Strategy Lenses </li></ul><ul><li>Strategy as Design </li></ul><ul><li>Strategy as Experience </li></ul><ul><li>Strategy as Ideas </li></ul>
    3. 3. Exhibit 2.2 Patterns of strategy development Continuity Incremental Flux Transformational
    4. 4. Exhibit 2.3 Strategic evolution and consolidation . Product launch Acquisition Divestment Overseas expansion Strategies evolve and inform strategic decisions, which in turn consolidate strategic direction Evolving strategic direction Strategic decisions e.g.
    5. 5. Exhibit 2.4 Strategy development routes Unrealised strategy Intended strategy 3 5 Planned implementation 1 2 5 Realised strategy Strategy as outcome (of cultural and political processes) Imposed strategy 4
    6. 6. Exhibit 2.7 The role of the paradigm in strategy formulation Opportunities and threats Strengths and weaknesses Performance Environmental forces Organisational capabilities THE PARADIGM Strategy
    7. 7. Strategy development dimensions <ul><li>Planning </li></ul><ul><li>Incremental </li></ul><ul><li>Cultural </li></ul><ul><li>Enforced choice </li></ul>
    8. 8. The 6 key planning questions <ul><li>Where are we now? </li></ul><ul><li>How did we get there? </li></ul><ul><li>Where are we heading? </li></ul><ul><li>Where would we like to be? </li></ul><ul><li>How do we get there? </li></ul><ul><li>Are we on course? </li></ul>
    9. 9. STRATEGY DEVELOPMENT DIMENSIONS (1) <ul><li>The Planning Dimension </li></ul><ul><li>strategies are the outcome of rational, sequential, planned and methodical procedures </li></ul><ul><li>definite and precise strategic objectives are set </li></ul><ul><li>the organisation and environment are analysed </li></ul><ul><li>potential strategic options are generated and the optimum solution chosen </li></ul><ul><li>defined procedures for implementation and the achievement of the strategic objectives are developed </li></ul><ul><li>the strategy is made explicit in the form of detailed plans </li></ul>
    10. 10. STRATEGY DEVELOPMENT DIMENSIONS (2) <ul><li>The Incremental Dimension </li></ul><ul><li>evolutionary but purposeful strategy development </li></ul><ul><li>strategy is developed as issues arise </li></ul><ul><li>strategy is continually adjusted to match changes in the operating environment </li></ul><ul><li>early commitment to a strategy is tentative and subject to review </li></ul><ul><li>strategic options are continually assessed for fit </li></ul><ul><li>successful options gain additional resources </li></ul><ul><li>strategic options are developed from existing strategies by experimentation and through gradual implementation </li></ul>
    11. 11. STRATEGY DEVELOPMENT DIMENSIONS (3) <ul><li>The Cultural Dimension </li></ul><ul><li>a “way of doing things” in the organisation guides strategic direction </li></ul><ul><li>strategies evolve in terms of a core set of shared assumptions based on past experience, values and beliefs held by the organisation’s members </li></ul><ul><li>- the selection of goals and objectives </li></ul><ul><ul><li>the identification of strategic issues </li></ul></ul><ul><ul><li>the selection of information </li></ul></ul><ul><ul><li>the selection of strategies </li></ul></ul>
    12. 12. STRATEGY DEVELOPMENT DIMENSIONS (4) <ul><li>The Enforced Choice Dimension </li></ul><ul><li>strategic choice is prescribed or limited by external forces which the organisation is unable to control or influence. </li></ul><ul><li>organisations respond to environmental imperatives. </li></ul><ul><li>strategic change is instigated from outside the organisation. </li></ul><ul><li>barriers in the environment severely restrict strategic mobility. </li></ul>
    13. 13. Exhibit 2.6 Cultural frames of reference Functional/ divisional Organisational Professional (or institutional) National (or regional) Industrial/ sector (recipe) The individual
    14. 14. Implications for strategy development <ul><li>Intended & realised strategy </li></ul><ul><li>Strategic drift </li></ul><ul><li>Strategic management in uncertainty & complexity </li></ul>
    15. 15. Exhibit 2.5 Incremental change Environmental change Incremental strategic change Time Amount of change
    16. 16. THE PARADIGM <ul><li>... The beliefs and assumption held in common </li></ul><ul><li>and taken for granted in an organisation. </li></ul><ul><li>Edgar Schien **** </li></ul><ul><li>W. Williams **** </li></ul>
    17. 17. Exhibit 2.8 Phases of strategic decision making Issue awareness Selection of solutions Solution development Issue formulation
    18. 18. Exhibit 2.10 The cultural web Control systems Stories Symbols Rituals and routines The Paradigm Power structures Organisational structures
    19. 19. Exhibit 2.11 The dynamics of paradigm change Source: Adapted from P. Grinyer and J-C. Spender, Turnaround: Managerial recipes for strategic success , Associated Business Press, 1979, p. 203 The paradigm Development of strategy Implementation Corporate performance Step 1 Tighter control Step 2 Reconstruct or develop new strategy if unsatisfactory Step 3 Abandon paradigm and adopt a new one
    20. 20. Exhibit 2.13 Different approaches to strategic management Strategic Strategic intent Planning Incremental Encouraging ‘intrapreneurship’ Simple ‘Product’ Complex Product Unpredictable environment Predictable environment
    21. 21. Exhibit 2.12 The risk of strategic drift Time Amount of change Phase 1 Phase 2 Phase 3/4 Incremental change Flux Transformational change or demise Strategic change Environmental change 1 5 2 3 4
    22. 22. The Learning Organisation <ul><li>Organisations where people are continually learning how to learn together </li></ul><ul><li>People who function together in an extraordinary way - trust one another -complement each others strengths – compensate for each others limitations – common goals larger than individual goals – produce extraordinary results </li></ul><ul><li>The Fifth Discipline., the Art & Practice of the Learning Organisation, by Peter Senge </li></ul>
    23. 23. The Learning Organisation <ul><li>The Systems Approach </li></ul><ul><li>Systems Thinking </li></ul><ul><li>Team Learning </li></ul><ul><li>Personal Mastery </li></ul><ul><li>Mental Models </li></ul><ul><li>Building a Shared Vision </li></ul>
    24. 24. THE BENEFITS OF FORMAL PLANNING SYSTEMS <ul><li>A structured means of analysis and thinking about strategic problems. </li></ul><ul><li>Encouraging questioning and challenging of the taken for granted. </li></ul><ul><li>The involvement of people in strategy development. </li></ul><ul><li>Contributing to ownership and co-ordination of strategy. </li></ul><ul><li>A means of communication of intended strategy. </li></ul><ul><li>A means of control against agreed objectives . </li></ul>
    25. 25. DANGERS AND PROBLEMS OF FORMAL PLANNING SYSTEMS <ul><li>The neglect of cultural and political dimensions of organisations. </li></ul><ul><li>Delegating responsibility to specialists </li></ul><ul><li>Failure to achieve ownership of plans </li></ul><ul><li>Individuals understanding parts rather than the whole of plans </li></ul><ul><li>Detail rather than vision </li></ul><ul><li>Information overload </li></ul><ul><li>Strategy as ‘the plan’ </li></ul><ul><li>The search for the mythical ‘right strategy’. </li></ul>
    26. 26. STRATEGIC MANAGEMENT PROCESSES <ul><li>Different organisations develop strategies according to their culture to suit their environment </li></ul><ul><li>We need to understand how strategies are developed and managed in our organisations and relate it to the learning on this subject. </li></ul>
    27. 27. Summary - Understanding Strategic Development <ul><li>Three lenses for making sense of strategy, Design, experience & ideas </li></ul><ul><li>Most often the process of strategy development is described as a result of analysis evaluation & planning systems carried out by top management objectively & dispassionately </li></ul><ul><li>The experience lens shows how the organisational culture tends to lead to being adapted from strategies of the past </li></ul><ul><li>The ideas lens is useful to develop really innovative strategies that can cope with rapidly changing & unpredictable environments & emerge where the emphasis is on diversity & variety </li></ul><ul><li>These lenses can be helpful in providing insight into strategy development , considering the argument for/against strategic planning, how strategic leaders influence strategy in their organisations, the way political activity plays a part, how organisations may proactively try to cope with dynamic & uncertain environments through the emergent process of logical incrementalism, or more open learning systems in which diversity o f views is encouraged, or how strategies might be imposed on organisations by external agencies </li></ul><ul><li>It is likely that a mixture of these strategy development processes is employed, known as the configuration of process </li></ul><ul><li>Important to differentiate between realised strategy, that evolves incrementally, over time, interrupted by periods of punctuated equilibrium during which transformational change occurs & the intended strategy an organisation ought to follow </li></ul><ul><li>Historical data my be useful in stable environment s, but less useful in dynamic environments & complex environments in which more attention needs to be given to responding throughout the organisation to change,. </li></ul>