The document summarizes recent developments in strategic management research over the past 25 years. Some of the key areas that have seen significant research include the resource-based view of the firm, competitive strategy, international strategy, strategic leadership, and corporate governance. Emerging areas of research include strategic entrepreneurship, strategy processes, and network strategies. The document also discusses specific topics within these areas that have been a focus of recent research, such as international mergers and acquisitions, emerging markets, innovation, and strategic decision-making processes.

1. Doaa Al Thalathini
Spotlight on
Strategic Management

3.  The field of strategic management has advanced substantially in
both the theoretical domain and empirical research over the last
25 years. While the roots of the field can perhaps be traced back
as early as 320 BC to the work of Sun Tsu, the evolution of the
field in the last few decades has been dramatic.
 Recent work traced the intellectual structure of the field over the
period 1980—2000 (Ramos-Rodriguez & Ruiz-Navarro, 2004).
Some of the most cited works represent particular perspectives
such as industrial organization economics, corporate strategy-
product diversification (Rumelt, 1974), transaction costeconomics
(Williamson, 1975), evolutionary economics (Nelson & Winter,
1982), resource dependence (Pfeffer & Salancik, 1978), and the
behavioral theory of the firm (Cyert & March, 1963.

4.  Agency theory and transaction cost economics have played
prominent roles in building our understanding of executive and
firm behavior, industrial organization economics and the
resource-based view of the firm (RBV) have dominated much of
the research and thinking in the field over the past 25 years.
 During the 1990s and since, rich streams of research emerged in
such areas as competitive strategy, corporate governance
,international strategy, strategic leadership and dynamic
capabilities.
 Emerging areas of strategic management research include
strategic entrepreneurship ,strategy process and network
strategies.

6.  Much research in the strategic management field has focused on
why some firms outperform others.
 One explanation is that market imperfections allow this; thus,
prior research has focused on the source of these imperfections
and how firms take advantage of them. The RBV has been used
to help explain why some firms outperform others.

7. Resources and Resource Management
International Strategy
Innovation
Strategic Leadership and Processes
Corporate Governance & Strategic
Entrepreneurship

9.  The first process is structuring the resource portfolio, which
requires that firms engage in the acquisition and development of
resources and, when necessary, delete less valuable resources,
as well.
 The first process is structuring the resource portfolio, which
requires that firms engage in the acquisition and development of
resources and, when necessary, delete less valuable resources,
as well.
 To create capabilities, managers can engage one or more processes,
such as stabilizing, enriching, and pioneering.

10.  If firms have a competitive advantage and operate in a stable
environment, they may engage in a stabilizing process whereby
existing capabilities are incrementally improved.
 Enrichment, on the other hand, adds substantial value to existing
capabilities, often by bundling new resources with existing ones.
 Pioneering involves the creation of new capabilities by
recombining existing resources or using substantial amounts of
resources added to the portfolio.
 In dynamic environments, enriching and pioneering bundling
processes are increasingly necessary.

11.  The final primary process in the effective management of
resources in the organization involves leveraging those
capabilities to create a competitive advantage.
 Sirmon et al. argue that leveraging involves mobilizing the
capabilities, coordinating them to create configurations,
and then deploying them to exploit opportunities; that is,
strategies are designed and executed to exploit market
opportunities. I anticipate a considerable amount of
research on the management of resources to exploit market
opportunities will be conducted in the next few years.

13.  An important area of research in strategic management.
 Focuses on what is required for success in international markets.
 Almost all large established US firms operate in international
markets.
 Approximately 50% of US SMEs also have sales outside the
domestic market.
 Along with the increasing number of multinational enterprises,
the interconnectedness of cross-border, regional, and even global
markets places significant importance on the topic of international
strategy.

14.  An area of ongoing research in under international strategic.
 A review of this research highlights the importance of
strategic alliance activity and the current emphasis on
learning how to manage the multiple alliances in which many
firms engage.

15.  Has a growing importance in recent years.
 Merge: when two firms agree to go forward as a single new
company rather than remain separately owned and operated.
 Acquisitions: when one company takes over another and
clearly establishes itself as the new owner.
 The recent acquisition of IBM’s personal computer business
by the Chinese firm, Lenovo.

16.  Less research has been conducted on cross-border M & As
than international strategic alliances, a recent review
suggested that M & As are used to:
Gain access to important international markets.
Obtain new knowledge.
Develop new capabilities.
 We need to learn about international M & As, as they
present greater challenges to achieving success than most
other strategies. We know that many M & As are not
successful.

17.  Recent research explains how firms can complete acquisitions
that are valuable and difficult to imitate, thereby contributing to
a competitive advantage.
 Research suggest when firms complete acquisitions that allow
them to control new resources and combine these with existing
resources to develop new capabilities, their performance is likely
to improve.

18.  Another topic of increasing importance, why and how
foreign firms enter them, and how local firms react.
 It’s strategies have become increasingly important:
The accumulated value of foreign direct investment by
these firms over time is now greater than $800 billion.
It has been predicted that a few emerging market
countries are likely to have a significant effect on the
world economy over the next 20-40 years.
These countries include Brazil, Russia, India, and China.

19. It’s important to learn about institutions in the domestic
environments, also it’s realized the importance of different
institutional environments across countries.
There are significant effects of different institutional
environments on firm strategies.
Firms may employ different strategies in different
institutional environments.
Firms are concerned about the resources they must have to
be successful in different international markets and different
institutional environments.

21.  A report entitled “Innovate America” (2004), concluded
that innovation was the single most important factor that
will affect the success of US firms in the 21st century.
According to the Innovation Index, the US slipped in
ranking from 1st in 2002 to 3rd in 2004.
Research has been conducted on how corporate and
business-level strategies affect innovation.
M and As can lead to reduced innovation output and that
acquisitions can even be used as a substitute for innovation.

22.  Recent research suggests that firms try to buffer their own
unique and valuable technological knowledge while trying
to stay attuned to new externally created technological
knowledge.
Two recent phenomena of potential importance are the
increased number of international R & D alliances formed
and efforts to establish R & D centers in foreign countries.
The R & D alliances are designed to use different but
complementary knowledge stocks to create uniquely new
innovations.

23. Alternatively, foreign research centers usually have two
purposes:
1. They are intended to build on knowledge unique to the
host country that allows the firm to develop products
that will be successful in that country’s domestic
markets. This is especially important where the
markets are large (e.g., China).
2. To obtain new knowledge that can be diffused
throughout the organization to create innovative
products that are competitive in global markets.

25.  Last 25 years much of researcher has focused on the content
of the strategies.
 There a definite need to a better understand to the processes
used to develop and implement effective strategies.
 Tow questions must be raised especially to the boards of
directors.
1. What are the process used by the board of directors to
evaluate and approved (or not) the major strategic
decisions?
2. How does the board remove or replace a CEOs?

26.  Much of strategies leader ship research focused on the
demographic characteristics of top executives managers
and top management but the recent research represents a
perceptible change.
For Example:
 Cannella’s earlier work focused on processes
(Cannella & Lubatkin, 1993).

27.  Cannella’s resent work with Hambirk examines the predictors of
when CEOs have COOs, the authors found that the firm with
both CEOs and COOs have lower performance than those with
CEOs only. (Hambirk & Cannella ,2004).
 More research is needed on the process of making and
implementing strategic decisions.
 Book edited by Chakravarthy (2003) examined:
- the dynamic of the strategy content overtime
- effect of the strategy process dimensions on firm performance.

28. -Interrelation ship between firm context and strategy process.
- Linkage among context process and outcomes.
- the editors emphasize how firms develop strategies that create
and sustain competitive advantages.
 Book edited by Floyed (2004) explains:
- the genesis of innovative strategy making, contexts of
innovation and models of strategic renewal.
 Although These edited Books provide a beginning foundation,
we clearly need more research on strategy implementation
process.

30.  Corporate Governance is actually important in both field of
finance and strategic management because its practical and
scholarly importance.
 Strategic entrepreneurship -Recent research has suggested
that in order to enjoy success overtime , new venture firms
must be both strategic and entrepreneurial.
 New venture firms are generally entrepreneurial but the do
not succeed because they don’t take strategic actions to
establish and maintain a competitive advantages.

31.  Alternatively, while established firms may enjoy a competitive
advantages they are likely to lose it over time if the are not
entrepreneurial additionally established firms sometimes find
difficult to be entrepreneurial.
 There are many other topics on which research is conducted in
strategic management, the author have tried to emphasize some
of the most important to the field and to the top executives and
managers as a means of guidance for making strategic
decisions in their organizations.

32. Great Thanks To You