17. Strategic Management Process Adapted from Exhibit 1.2 Realized Strategy and Intended Strategy: Usually Not the Same Source: H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and Emergent,” Strategic Management Journal 6 (1985), pp. 257-72. 1-
Leaders can make a difference Must be aware of opportunities and threats faced in external environment Must have thorough understanding of the firm’s resources and capabilities
Answer: B - romantic See previous slide
Strategic management is the study of why some firms outperform others How to compete in order to create competitive advantages in the marketplace How to create competitive advantages in the market place Unique and valuable Difficult for competitors to copy or substitute
Analysis Strategic goals (vision, mission, strategic objectives) Internal and external environment of the firm Strategic decisions What industries should we compete in? How should we compete in those industries?
Operational effectiveness – performing similar activities better than rivals
Ambidexterity - The challenge managers face of both aligning resources to take advantage of existing product markets as well as proactively exploring new opportunities
They take time and are alert to opportunities beyond the confines of their own jobs They are cooperative and seek out opportunities to combine their efforts with others They are brokers, always looking to build internal networks They are multi-taskers who are comfortable wearing more than one hat How does one become a more ambidextrous leader? Consider the following questions: Do you meet your numbers? Do you help others? What do you do for your peers? When you manage up, do you bring problems – or problems with possible solutions? Are you transparent? Are you developing a group of senior managers who know you and are willing to back your original ideas with resources?
Starting point in the strategic management process Analyzing organizational goals and objectives – Ch 1 Analyzing the external environment of the firm – Ch 2 Assessing the internal environment of the firm – Ch 3 Assessing a firm’s intellectual assets – Ch 4
Business level strategy Addresses the issue of how to compete in a given business to attain competitive advantage Corporate-level strategy What businesses should we be in? How can businesses be managed to achieve synergy? International strategy What is the appropriate entry strategy? How do we go about attaining competitive advantage in international markets? Entrepreneurial strategy How do we recognize viable opportunities? How do we formulate an effective strategy? Formulating business level strategy – Ch 5 Formulating corporate level strategy – Ch 6 Formulating international strategy – Ch 7 Entrepreneurial strategy and competitive dynamics – Ch 8
Strategic control and corporate governance – Ch 9 Creating effective organizational designs – Ch 10 Creating a learning organization and an ethical organization – Ch 11 Fostering corporate entrepreneurship – Ch 12
Corporate governance The relationship among various participants in determining the direction and performance of corporations Shareholders Management (led by the CEO) Board of Directors
Answer: B – stakeholder symbiosis. See the previous slide
Social responsibility The expectation that businesses or individuals will strive to improve the overall welfare of society Managers must take active steps to make society better
Triple bottom line Assessment of a company’s performance in financial, social, and environmental dimensions Failure to account for the environmental and social costs of doing business poses risks to the company and its community
Starbucks Coffee Company Managing CSR Starbucks continues to evolve and strengthen the way CSR is managed internally. We have created structures to ensure that emerging issues are identified, prioritized and addressed in a more systematic and integrated manner throughout the company; and that company policies and procedures are upheld and followed. Our Emerging Issues Council, CSR Executive Committee and Policy Governance Council serve these functions respectively. Throughout the company, there is a strong sense of shared accountability for CSR. In fiscal 2007, we took both a centralized and decentralized organizational approach to managing CSR. At the Starbucks Support Center, our global headquarters located in Seattle, there was a dedicated CSR group, reporting to the senior vice president of CSR, for the day-to-day management of specific CSR-related initiatives. This group often serves as the catalyst for new CSR programs, which may end up being managed and implemented at the business unit, division or department level. Once implemented, the CSR team provided broad oversight and served as an ongoing resource. Currently there is not a committee of the board dedicated to CSR. Source: http://www.starbucks.com/aboutus/csrreport/csr.htm
Managers must make a major effort to effect transformational change Involves extensive communication, incentives, training and development
Hierarchy of goals Goals ranging from, at the top, those that are less specific yet able to evoke powerful and compelling mental images, to, at the bottom, those that are more specific and measurable Vision, mission statement, strategic objectives
Mission statement Set of goals that include both the purpose of the organization, its scope of operations, and the basis of its competitive advantage Incorporates the concept of stakeholder management Has the greatest impact when it reflects an organization’s enduring, overarching strategic priorities and competitive positioning
Help channel employees’ efforts toward common goals Help inspire employees to higher levels of commitment and effort
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