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Current Trends in  Strategi c  M anagement <ul><li>The New E conomy </li></ul><ul><li>New  Directions in Strategic Thinkin...
The Turbulent 21 st  Century <ul><li>Collapse of New Economy </li></ul><ul><li>Dot.com bubble bursts </li></ul><ul><li>TMT...
US Labor Productivity: Annual Changes in Non-Farm Output per Hour Worked, 1990-2006
Return on Equity of US Manufacturing Corporations, 1990-200 3 Source: US Bureau of the Census
The value of mergers and  acquisitions worldwide Source : Thomson Financial Securities Data
<ul><li>Key  T rends of the 1990s: </li></ul><ul><li>Quest for shareholder  value </li></ul><ul><li>Adjusting to  increase...
Future Sources of Profit Limits of downsizing/cost cutting Where are future sources of  profit? Technology Continued advan...
<ul><li>STRATEGY </li></ul><ul><li>Multiple competitive advantages/multiple capabilities </li></ul><ul><li>Innovation / Ne...
The Need to Redesign Organizations THE PAST THE FUTURE Emphasis on control Emphasis on co-ordination Decisions located cen...
Emerging Organizational Forms Process-based  Organizing around business processes organizations  Organizing around  corpor...
<ul><li>THE LEADERSHIP NEEDS </li></ul><ul><li>OF ORGANIZATIONS </li></ul><ul><li>The ability to: </li></ul><ul><ul><li>bu...
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Ch17

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Ch17

  1. 1. Current Trends in Strategi c M anagement <ul><li>The New E conomy </li></ul><ul><li>New Directions in Strategic Thinking </li></ul><ul><li>Redesigning the Organization </li></ul><ul><li>New Modes of Leadership </li></ul>OUTLINE
  2. 2. The Turbulent 21 st Century <ul><li>Collapse of New Economy </li></ul><ul><li>Dot.com bubble bursts </li></ul><ul><li>TMT recession </li></ul><ul><li>Corporate Scandals </li></ul><ul><li>Enron, WorldCom, Parmalat </li></ul><ul><li>Jack Welch’s retirement package </li></ul><ul><li>War </li></ul><ul><li>Invasion of Afghanistan </li></ul><ul><li>& Iraq </li></ul><ul><li>Civil wars in Congo, Liberia, Sudan, Somalia </li></ul>Age of Disbelief <ul><li>The Curse of Terrorism </li></ul><ul><li>Sept. 11, 2001 </li></ul><ul><li>Suicide bombings in </li></ul><ul><li>Israel, Iraq, Saudi Arabia, Turkey, Afghanistan </li></ul><ul><li>Fear of Disease </li></ul><ul><li>SARS, Mad Cow, Bird Flu </li></ul>Unstable Currencies US$ declines by >50% against Euro 2002-04 <ul><li>Decline of </li></ul><ul><li>Multilateralism </li></ul><ul><li>Collapse of Doha round </li></ul><ul><li>Trade wars between US, EU, China </li></ul><ul><li>Weakening of UN </li></ul><ul><li>International </li></ul><ul><li>competition intensifies </li></ul><ul><li>China as Workshop of the World </li></ul><ul><li>Outsourcing to LDCs </li></ul>
  3. 3. US Labor Productivity: Annual Changes in Non-Farm Output per Hour Worked, 1990-2006
  4. 4. Return on Equity of US Manufacturing Corporations, 1990-200 3 Source: US Bureau of the Census
  5. 5. The value of mergers and acquisitions worldwide Source : Thomson Financial Securities Data
  6. 6. <ul><li>Key T rends of the 1990s: </li></ul><ul><li>Quest for shareholder value </li></ul><ul><li>Adjusting to increased </li></ul><ul><li>turbulence & more intense competition </li></ul><ul><li>I nfluen tial S trategy Concepts : </li></ul><ul><li>Modern financial analysis </li></ul><ul><li>— shareholder value, economic profit, </li></ul><ul><li>option theory </li></ul><ul><li>C ore competences and intangible </li></ul><ul><li>assets </li></ul><ul><li>Dynamic ally competiti ve markets </li></ul><ul><li>—“ hypercompetition” </li></ul><ul><li>Competitive advantage through </li></ul><ul><li>alliances, networks, and standards </li></ul><ul><li>Major Themes of Business Strategy : </li></ul><ul><li>Cost cutting — squeezing </li></ul><ul><li>overhead, business process re- </li></ul><ul><li>engineering, increasing labor </li></ul><ul><li>productivity </li></ul><ul><li>Outsourcing / refocusing / </li></ul><ul><li>divestment </li></ul><ul><li>Performance m ana g ement and </li></ul><ul><li>i ncentive alignment </li></ul>Directions in Strategic Management Practice —Trends of the 1990s
  7. 7. Future Sources of Profit Limits of downsizing/cost cutting Where are future sources of profit? Technology Continued advances in ICT Forces Shaping Company Strategies 2001-04 <ul><li>Concepts & Theories </li></ul><ul><li>Resources & capabilities as </li></ul><ul><li>basis for competitive advantage </li></ul><ul><li>Knowledge-based theory </li></ul><ul><li>of the firm </li></ul><ul><li>Option theory </li></ul><ul><li>Complexity theory </li></ul><ul><li>The Business </li></ul><ul><li>Environment </li></ul><ul><li>Uncertainty </li></ul><ul><li>Stalling of economic </li></ul><ul><li>liberalization </li></ul><ul><li>Intense competition </li></ul><ul><li>Demands of society </li></ul><ul><li>Social & environmental responsibility </li></ul><ul><li>Ethics & fairness </li></ul><ul><li>Quest for meaning </li></ul>
  8. 8. <ul><li>STRATEGY </li></ul><ul><li>Multiple competitive advantages/multiple capabilities </li></ul><ul><li>Innovation / New Product Development / New </li></ul><ul><li>Business Development </li></ul><ul><li>Alliances & networks </li></ul><ul><li>MANAGEMENT SYSTEMS </li></ul><ul><li>Knowledge management </li></ul><ul><li>(incl. best-practice transfer) </li></ul><ul><li>Redesigning incentive systems </li></ul><ul><li>Rethinking performance management </li></ul><ul><li>Capturing human creativity </li></ul>Emerging Developments <ul><li>ORGANIZATION </li></ul><ul><li>STRUCTURE </li></ul><ul><li>Reconciling flexibility </li></ul><ul><li>& integration </li></ul><ul><li>Modular structures </li></ul><ul><li>Multidimensional structures </li></ul><ul><li>Informal organization & </li></ul><ul><li>self-organization </li></ul>
  9. 9. The Need to Redesign Organizations THE PAST THE FUTURE Emphasis on control Emphasis on co-ordination Decisions located centrally Decisions located where relevant knowledge exists Simple structures , u nified line of command Multidimensional structures Diffused authority, but clear responsibilities Single performance goal Multiple performance goals Organization by design Self organization
  10. 10. Emerging Organizational Forms Process-based Organizing around business processes organizations Organizing around corporate processes - entrepreneurial process - competence building process - renewal process From unitary to parallel Separate coordination structures for structures different processes . E .g. 3M ’s product development structure; separate structures for TQM and change management Project-based organization E.g. engineering cos., consulting firms , also manufacturing cos. e.g. Oticon Network and v irtual E .g. e lectronics in Silicon Valley , c lothing o rganization and packaging equip ment in Italy Organizing for capability Shifting emphasis of organization development design from control to coordination
  11. 11. <ul><li>THE LEADERSHIP NEEDS </li></ul><ul><li>OF ORGANIZATIONS </li></ul><ul><li>The ability to: </li></ul><ul><ul><li>build confidence </li></ul></ul><ul><ul><li>build enthusiasm </li></ul></ul><ul><ul><li>cooperate </li></ul></ul><ul><ul><li>deliver results </li></ul></ul><ul><ul><li>form networks </li></ul></ul><ul><ul><li>influence others </li></ul></ul><ul><ul><li>use information </li></ul></ul>New Models of Leadership : What Competencies do Top Managers Need? <ul><li>THE REQUIRED </li></ul><ul><li>COMPETENCIES OF </li></ul><ul><li>BUSINESS LEADERS </li></ul><ul><ul><li>business literacy </li></ul></ul><ul><ul><li>creativity </li></ul></ul><ul><ul><li>cross-cultural </li></ul></ul><ul><ul><li>effectiveness </li></ul></ul><ul><ul><li>empathy </li></ul></ul><ul><ul><li>flexibility </li></ul></ul><ul><ul><li>proactivity </li></ul></ul><ul><ul><li>problem-solving </li></ul></ul><ul><ul><li>relation-building </li></ul></ul><ul><ul><li>teamwork </li></ul></ul><ul><ul><li>vision </li></ul></ul>

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