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Slide 6.1 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Chapter 6.

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Presentation on theme: "Slide 6.1 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Chapter 6."— Presentation transcript:

1 Slide 6.1 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Chapter 6

2 Slide 6.2 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Approaches to strategy Managerial choice and constraints

3 Slide 6.3 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategy Strategy is concerned with decision-making. Decisions about: The Past The Past The Present The Present The Future. The Future. Strategy is concerned with coping with change: Sit back Sit back React React Anticipate. Anticipate.

4 Slide 6.4 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Definitions of strategy 1960s Ansoff Ansoff Focus on the external environment Focus on the external environment Product-market mix. Product-market mix. Chandler Chandler Determination of long-range business goals Determination of long-range business goals The courses of action necessary to achieve these. The courses of action necessary to achieve these.

5 Slide 6.5 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 6.1 Product–market mix

6 Slide 6.6 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 6.2 SWOT analysis

7 Slide 6.7 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Johnson and Scholes (1993) Strategy: Concerns the full scope of the organisation’s activities. Concerns the full scope of the organisation’s activities. Is the process of matching the organisation’s activities to its environment. Is the process of matching the organisation’s activities to its environment. Is the process of matching its activities to its resource capability. Is the process of matching its activities to its resource capability. Has major resource implications. Has major resource implications. Affects operational decisions. Affects operational decisions. Is affected by the values and beliefs of those who have power in the organisation. Is affected by the values and beliefs of those who have power in the organisation. Affects the long-term direction of the organisation. Affects the long-term direction of the organisation.

8 Slide 6.8 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategic management is concerned with complexity arising out of ambiguous and non-routine situations with organisation-wide rather than operations-specific implications. … Nor is strategic management concerned only with taking decisions about major issues facing the organisation. It is also concerned with ensuring that the strategy is put into effect. It can be thought of as having three elements within it … understanding the strategic position of an organisation, strategic choices for the future and turning strategy into action. (Johnson and Scholes, 2002: 15–16) Strategic management

9 Slide 6.9 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Mintzberg on strategy Five definitions: Plan –Intended actions Plan –Intended actions Ploy –Manoeuvre Ploy –Manoeuvre Pattern – Consistent trend of behaviour Pattern – Consistent trend of behaviour Position – Avoiding competition Position – Avoiding competition Perspective – Common view. Perspective – Common view.

10 Slide 6.10 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited The rationalistic view – which sees strategy as the outcome of a series of preplanned actions designed to achieve the stated goals of an organisation in an optimal fashion. 2.The adaptive or incremental view – which sees strategy evolving through an accumulation of relatively small changes over time. 3.The interpretative view – which sees strategy as the product of individual and collective attempts to make sense of, i.e. interpret, past events. Johnson (1987) Johnson’s three basic views of strategy

11 Slide 6.11 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Making sense of strategy Prescriptive: Prescriptive: Ansoff Ansoff Chandler Chandler Porter. Porter. Analytical: Analytical: Mintzberg Mintzberg Pettigrew Pettigrew Child and Smith Child and Smith Stacey Stacey Hamel and Prahalad. Hamel and Prahalad.

12 Slide 6.12 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The strength of the Prescriptive school Firstly, the proponents set out deliberately to address the needs of industry and commerce by providing them with a blueprint for strategy formulation and implementation. Firstly, the proponents set out deliberately to address the needs of industry and commerce by providing them with a blueprint for strategy formulation and implementation. Secondly, they interacted closely with a number of leading consultants, notably the Boston Consultancy Group, and business schools, notably Harvard, to promote their work and tailor it to the needs of organisations. By reinforcing and promoting each other, this triple alliance of researchers, consultants and educators created an iron orthodoxy that organisations, especially large ones, felt they ignored at their peril. Secondly, they interacted closely with a number of leading consultants, notably the Boston Consultancy Group, and business schools, notably Harvard, to promote their work and tailor it to the needs of organisations. By reinforcing and promoting each other, this triple alliance of researchers, consultants and educators created an iron orthodoxy that organisations, especially large ones, felt they ignored at their peril. Lastly, because all three groups in this triple alliance were in effect engaged in a business activity, selling strategy as a product, they were able to invest in promoting and developing their product in a way that others were not. Lastly, because all three groups in this triple alliance were in effect engaged in a business activity, selling strategy as a product, they were able to invest in promoting and developing their product in a way that others were not.

13 Slide 6.13 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Hard data are no more reliable, and in some cases less so, than qualitative data. Organisations and managers are not rational entities and do not apply a rational approach to decision- making. An organisation’s strategy is as likely to emerge from unplanned actions and their unintended consequences over a period of time as it is from any deliberate process of planning and implementation. Criticisms of the Prescriptive approach to strategy

14 Slide 6.14 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Criticisms of the Analytical approach to strategy To observe [as the proponents of Analytical stream of strategy do] that organizations are complex, that change is inevitably incremental, and that strategy is inevitably adaptive, however true, helps very little in deciding what to do. Managers wish to be told of a process which they can at least partially control and, whatever its weaknesses, that is what rationalist [Prescriptive] strategy appears to offer. (Kay, 1993:357)

15 Slide 6.15 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Planned and Emergent strategies Deliberate strategy focuses on control – making sure that managerial intentions are realized in action – while emergent strategy emphasizes learning – coming to understand through the taking of actions what those intentions should be in the first place.... The concept of emergent strategy... opens the door to strategic learning, because it acknowledges the organization’s capacity to experiment. A single action can be taken, feedback can be received, and the process can continue until the organization converges on the pattern that becomes its strategy. (Mintzberg et al, 1998a: 189–190)

16 Slide 6.16 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 6.3 Emergent strategy Source: Adapted with permission from Mintzberg, H., Patterns in Strategy Formation, Management Science, 24(9), (1978). Copyright 1978, the Institute for Operations Research and the Management Sciences, 7240 Parkway Drive, Suite 300, Hanover, Maryland 21076

17 Slide 6.17 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 6.4 Constraints on managerial choice

18 Slide 6.18 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Managers have choice But choice is constrained by National objectives, practices and cultures: National objectives, practices and cultures: GM and USA GM and USA Japan and Toyota. Japan and Toyota. Industry and sector norms: Industry and sector norms: Cars – Lean Production Cars – Lean Production Agriculture – State Intervention. Agriculture – State Intervention.

19 Slide 6.19 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Managers have choice (Continued) Business environment: Business environment: Stable Stable Dynamic. Dynamic. Organisational characteristics: Organisational characteristics: Structure Structure Culture Culture Politics Politics Managerial style. Managerial style.

20 Slide 6.20 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Remember Constraints can be manipulated.

21 Slide 6.21 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Chapter 7

22 Slide 6.22 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Applying strategy Models, levels and tools

23 Slide 6.23 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategy in practice The Competitive Forces model The Competitive Forces model Cost leadership Cost leadership Product differentiation Product differentiation Specialisation by focus. Specialisation by focus. The Strategic Conflict model The Strategic Conflict model Out-manoeuvre the opposition Out-manoeuvre the opposition Manipulate the market. Manipulate the market. The Resource-Based model The Resource-Based model Firm-specific resources Firm-specific resources Distinctive competences Distinctive competences Serendipity. Serendipity.

24 Slide 6.24 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Points to note All strategies have weaknesses as well as strengths. All strategies have weaknesses as well as strengths. They tend to be situation-specific. They tend to be situation-specific. Managers need to be familiar with the available range of strategies and tools. Managers need to be familiar with the available range of strategies and tools. They should use the ones best suited to their circumstances. They should use the ones best suited to their circumstances. Strategies need necessarily be mutually exclusive. Strategies need necessarily be mutually exclusive. They may be interchangeable and/or complementary. They may be interchangeable and/or complementary.

25 Slide 6.25 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Levels of strategy Corporate Corporate Business Business Functional. Functional.

26 Slide 6.26 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Levels of strategic decision-making The corporate level. Strategy at this level concerns the direction, composition and co-ordination of the various businesses and activities that comprise a large and diversified organisation, such as Rupert Murdoch’s News International or Richard Branson’s Virgin empire. The corporate level. Strategy at this level concerns the direction, composition and co-ordination of the various businesses and activities that comprise a large and diversified organisation, such as Rupert Murdoch’s News International or Richard Branson’s Virgin empire. The business level. Strategy at this level relates to the operation and direction of each of the individual businesses within a group of companies. The business level. Strategy at this level relates to the operation and direction of each of the individual businesses within a group of companies. The functional level. Strategy at this level concerns individual business functions and processes such as finance, marketing, manufacturing, technology and human resources. The functional level. Strategy at this level concerns individual business functions and processes such as finance, marketing, manufacturing, technology and human resources.

27 Slide 6.27 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Types of corporate strategy Stability strategy Stability strategy Growth strategy Growth strategy Portfolio extension Portfolio extension Retrenchment strategy Retrenchment strategy Harvesting strategy Harvesting strategy Combination strategy. Combination strategy.

28 Slide 6.28 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Business-level strategy... the mission of the business, the attractiveness of the industry in which the business belongs, and the competitive position of the business unit within the industry. These are the inputs that determine the strategic agenda of a business and lead to the formulation and implementation of its strategy. (Hax and Majluf, 1996: 46)

29 Slide 6.29 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Functional-level strategy This has often been neglected by Western organisations because of: The concentration at both the corporate and business levels on the external world, i.e. the market, led to a lack of interest in the internal operation of organisations. The assumption was that the internal world was malleable, and could and should adjust to the priorities set by corporate and business strategists. The concentration at both the corporate and business levels on the external world, i.e. the market, led to a lack of interest in the internal operation of organisations. The assumption was that the internal world was malleable, and could and should adjust to the priorities set by corporate and business strategists. The key elements of functional level strategy, especially concerning finance, marketing, R&D and technology, were in effect determined and constrained by corporate strategists. Indeed, in many organisations, even the human resource strategy was determined at the corporate level. The key elements of functional level strategy, especially concerning finance, marketing, R&D and technology, were in effect determined and constrained by corporate strategists. Indeed, in many organisations, even the human resource strategy was determined at the corporate level. Even though the 1980s saw a renewed interest in functional- level strategy, this tended to be one-sided, stressing soft, personnel-type issues. Even though the 1980s saw a renewed interest in functional- level strategy, this tended to be one-sided, stressing soft, personnel-type issues.

30 Slide 6.30 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategic types Defenders. Defenders. Prospectors. Prospectors. Analysers. Analysers. Reactors. Reactors. Miles and Snow (1978)

31 Slide 6.31 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategic types Defenders. These seek internal stability and efficiency by producing only a limited set of products, directed at a narrow but relatively stable segment of the overall market, which they defend aggressively. Such organisations are characterised by tight control, extensive division of labour and a high degree of formalisation and centralisation. Defenders. These seek internal stability and efficiency by producing only a limited set of products, directed at a narrow but relatively stable segment of the overall market, which they defend aggressively. Such organisations are characterised by tight control, extensive division of labour and a high degree of formalisation and centralisation. Prospectors. These are almost the opposite of defenders. They aim for internal flexibility in order to develop and exploit new products and markets. To operate effectively in a dynamic environment they have a loose structure, low division of labour and formalisation, and a high degree of decentralisation. Prospectors. These are almost the opposite of defenders. They aim for internal flexibility in order to develop and exploit new products and markets. To operate effectively in a dynamic environment they have a loose structure, low division of labour and formalisation, and a high degree of decentralisation. Miles and Snow (1978)

32 Slide 6.32 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategic types (Continued) Analysers. These types of organisation seek to capitalise on the best of both the preceding types. They aim to minimise risk and maximise profit. They move into new markets only after viability has been proved by prospectors. Their internal arrangements are characterised by moderately centralised control; with tight control over current activities but looser controls over new undertakings. Analysers. These types of organisation seek to capitalise on the best of both the preceding types. They aim to minimise risk and maximise profit. They move into new markets only after viability has been proved by prospectors. Their internal arrangements are characterised by moderately centralised control; with tight control over current activities but looser controls over new undertakings. Reactors. This is a residual strategy. These types of organisation exhibit inconsistent and unstable patterns caused by pursuing one of the other three strategies erratically. In general, reactors respond inappropriately, perform poorly, and lack the confidence to commit themselves fully to a specific strategy for the future. Reactors. This is a residual strategy. These types of organisation exhibit inconsistent and unstable patterns caused by pursuing one of the other three strategies erratically. In general, reactors respond inappropriately, perform poorly, and lack the confidence to commit themselves fully to a specific strategy for the future. Miles and Snow (1978)

33 Slide 6.33 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategic planning tools Examples Prescriptive Prescriptive Growth-Share Matrix Growth-Share Matrix Analytical Analytical Scenario/Vision Building. Scenario/Vision Building.

34 Slide 6.34 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 7.3 BCG Growth-Share Matrix

35 Slide 6.35 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 A scenario is ‘… a detailed and plausible view of how the business environment of an organisation might develop in the future based on groupings of key environmental influences and drivers of change about which there is a high level of uncertainty’. (Johnson and Scholes, 2002: 107) What is a scenario?

36 Slide 6.36 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Vision-building Compelling visions have two components: A core ideology which describes the organisation’s core values and purpose; and A core ideology which describes the organisation’s core values and purpose; and A strong and bold vision of the organisation’s future which identifies specific goals and changes. A strong and bold vision of the organisation’s future which identifies specific goals and changes. Collins and Porras (1997)

37 Slide 6.37 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The major elements of vision-building The conception by a company’s senior management team of an ‘ideal’ future state for their organisation. The conception by a company’s senior management team of an ‘ideal’ future state for their organisation. The identification of the organisation’s mission, its rationale for existence. The identification of the organisation’s mission, its rationale for existence. A clear statement of desired outcomes and the desired conditions and competences needed to achieve these. A clear statement of desired outcomes and the desired conditions and competences needed to achieve these.

38 Slide 6.38 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Criticisms of the scenario/vision- building approach They are prone to subjectivity and bias. The fact that any five management specialists can interpret the same situation in totally different ways is an oft-quoted example of this type of criticism. They are prone to subjectivity and bias. The fact that any five management specialists can interpret the same situation in totally different ways is an oft-quoted example of this type of criticism. They can encourage retrospection. People’s ideas of the future are informed by their knowledge and experience of the past. Since experience is not always the best teacher, scenarios and visions may be based on false assumptions. They can encourage retrospection. People’s ideas of the future are informed by their knowledge and experience of the past. Since experience is not always the best teacher, scenarios and visions may be based on false assumptions. Participants can be strongly influenced in their preference of scenario by their own sectional and personal interests. Participants can be strongly influenced in their preference of scenario by their own sectional and personal interests.

39 Slide 6.39 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Criticisms of the scenario/vision- building approach (Continued) The process cannot be carried out by novices and can, therefore, be time-consuming and expensive in terms of senior management time and outside experts. The process cannot be carried out by novices and can, therefore, be time-consuming and expensive in terms of senior management time and outside experts. There is much debate about how many scenarios to construct and how they should be used. There is much debate about how many scenarios to construct and how they should be used. The more radical the vision or scenario, the more difficult it will be to get managers and others to commit to it. The more radical the vision or scenario, the more difficult it will be to get managers and others to commit to it. Visions often require strong visionary leaders, which are in short supply. Visions often require strong visionary leaders, which are in short supply.

40 Slide 6.40 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Prescriptive view Strategy: Is a rational/economic process Is a rational/economic process Matches products to markets Matches products to markets Uses mathematical models of trends Uses mathematical models of trends Is top-down Is top-down Consists of detailed plans Consists of detailed plans Drives change. Drives change.

41 Slide 6.41 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Analytical view Strategy Is a rational and a social process Is a rational and a social process Emerges from the continual stream of choices organisations make on a day-to-day basis Emerges from the continual stream of choices organisations make on a day-to-day basis Is bottom-up and top-down Is bottom-up and top-down Choice is constrained by structure, resources, culture and vision Choice is constrained by structure, resources, culture and vision Emerges from change. Emerges from change.

42 Slide 6.42 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Additional Material

43 Slide 6.43 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Child and Smith’s firm-in-sector perspective The ‘objective conditions’ for success. Though each firm within a sector may pursue a different strategy, these will all tend to focus on or be determined by similar success factors such as customer satisfaction, quality, profitability, etc. The ‘objective conditions’ for success. Though each firm within a sector may pursue a different strategy, these will all tend to focus on or be determined by similar success factors such as customer satisfaction, quality, profitability, etc. The prevailing managerial consensus. ‘… at least within well-established sectors, the senior managers of constituent firms hold very similar constructs of the sector’s operational dynamics which effectively furnish the rules of the game for the sector’. The prevailing managerial consensus. ‘… at least within well-established sectors, the senior managers of constituent firms hold very similar constructs of the sector’s operational dynamics which effectively furnish the rules of the game for the sector’. The collaborative networks operating in the sector. ‘… a sector does not only consist of product competitors; it is also a network of potential and actual collaborators’. Such collaborations may be with customers, suppliers, outside experts or even competitors. The collaborative networks operating in the sector. ‘… a sector does not only consist of product competitors; it is also a network of potential and actual collaborators’. Such collaborations may be with customers, suppliers, outside experts or even competitors. (Child and Smith, 1987: 566–569)

44 Slide 6.44 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Morgan’s organisational metaphors Organisations as machines Organisations as machines Organisations as organisms Organisations as organisms Organisations as brains Organisations as brains Organisations as cultures Organisations as cultures Organisations as political systems Organisations as political systems Organisations as psychic prisons Organisations as psychic prisons Organisations as flux and transformations Organisations as flux and transformations Organisations as instruments of domination Organisations as instruments of domination Morgan (1986)

45 Slide 6.45 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 [Some organisations pursue]... umbrella strategies: the broad outlines are deliberate while the details are allowed to emerge within them. Thus emergent strategies are not bad and deliberate ones good; effective strategies mix these characteristics in ways that reflect the conditions at hand, notably the ability to predict as well as the need to react to unexpected events. (Mintzberg, 1994: 25) Umbrella strategies

46 Slide 6.46 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Whittington’s categorisations The Classical approach: based on analysis and quantification. The Classical approach: based on analysis and quantification. The Evolutionary approach: organisations are at the mercy of the unpredictable and hostile vagaries of the market. The Evolutionary approach: organisations are at the mercy of the unpredictable and hostile vagaries of the market. The Processual approach: organisations are shifting coalitions with different interests. Markets are capricious and imperfect. The Processual approach: organisations are shifting coalitions with different interests. Markets are capricious and imperfect. The Systemic approach: strategy can be a deliberate process but only if the conditions within the host society are favourable. The Systemic approach: strategy can be a deliberate process but only if the conditions within the host society are favourable.

47 Slide 6.47 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Equifinality... quite simply means that different sorts of internal arrangements are perfectly compatible with identical contextual or environmental states. The principle goes against the idea of a quasi-ideal ‘match’ which is inherent in the principle of correspondence. Whereas correspondence [i.e. Contingency] theory suggests that rigid and bureaucratic structures are not a good match for volatile and shifting product markets, equifinality theorists claim that it may very well turn out to be a good match but only if the level and diversity of the workforce is large and organization culture produces motivated and flexible actors. (Sorge, 1997: 13)

48 Slide 6.48 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Strategic Conflict model This model portrays competition as war between rival firms. Its proponents tend draw on the work of military strategists such as von Clausewitz and Sun Tzu. This model portrays competition as war between rival firms. Its proponents tend draw on the work of military strategists such as von Clausewitz and Sun Tzu. It stresses the dynamic nature of strategy and the need to respond to competitors who do not always behave as anticipated. It stresses the dynamic nature of strategy and the need to respond to competitors who do not always behave as anticipated. Central to this approach is the view that a firm can achieve increased profits by influencing the actions and behaviour of its rivals and thus, in effect, manipulate the market environment. Central to this approach is the view that a firm can achieve increased profits by influencing the actions and behaviour of its rivals and thus, in effect, manipulate the market environment. This can be done in a number of ways, such as by investment in capacity, R&D and advertising. This can be done in a number of ways, such as by investment in capacity, R&D and advertising. However, such moves will have little impact if they can be easily undone; therefore, to be effective, they require irreversible commitment. However, such moves will have little impact if they can be easily undone; therefore, to be effective, they require irreversible commitment.

49 Slide 6.49 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Resource-Based model The focus of the resource-based model of competitive advantage is on the relationship between an organisation’s resources and its performance. The focus of the resource-based model of competitive advantage is on the relationship between an organisation’s resources and its performance. The resource-based view sees above-average profitability as coming from the effective deployment of superior or unique resources that allow firms to have lower costs or better products, rather than from tactical manoeuvring or product market positioning. The resource-based view sees above-average profitability as coming from the effective deployment of superior or unique resources that allow firms to have lower costs or better products, rather than from tactical manoeuvring or product market positioning. Such resources include tangible assets, such as plant and equipment; intangible assets, such as patents and brands; and capabilities, such as the skills, knowledge and aptitudes of individuals and groups. Such resources include tangible assets, such as plant and equipment; intangible assets, such as patents and brands; and capabilities, such as the skills, knowledge and aptitudes of individuals and groups.

50 Slide 6.50 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategic questions Corporate strategy is concerned with questions such as: Corporate strategy is concerned with questions such as: What is the mission of the organisation? What is the mission of the organisation? What are its unique attributes? What are its unique attributes? How should the business portfolio be managed? How should the business portfolio be managed? Which existing businesses should be disposed of and which new ones acquired? Which existing businesses should be disposed of and which new ones acquired? What priority and role should be given to each of the businesses in the current portfolio? What priority and role should be given to each of the businesses in the current portfolio? The central strategic concerns at the individual business level are: The central strategic concerns at the individual business level are: How should the firm position itself to compete in distinct, identifiable and strategically relevant markets? How should the firm position itself to compete in distinct, identifiable and strategically relevant markets? Which types of products should it offer to which groups of customers? Which types of products should it offer to which groups of customers? How should the firm structure and manage the internal aspects of the business in support of its chosen competitive approach? How should the firm structure and manage the internal aspects of the business in support of its chosen competitive approach?

51 Slide 6.51 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Strategic questions (Continued) Functional level strategy concerns itself with the following issues: Functional level strategy concerns itself with the following issues: How can the strategies formulated at the corporate and business levels be translated into concrete operational terms in such a way that the individual organisational functions and processes (marketing, R&D, manufacturing, personnel, finance, etc.) can pursue and achieve them? How can the strategies formulated at the corporate and business levels be translated into concrete operational terms in such a way that the individual organisational functions and processes (marketing, R&D, manufacturing, personnel, finance, etc.) can pursue and achieve them? How should the individual functions and processes of the business organise themselves in order not only to achieve their own aims, but also to ensure that they integrate with the rest of the business to create synergy? How should the individual functions and processes of the business organise themselves in order not only to achieve their own aims, but also to ensure that they integrate with the rest of the business to create synergy?

52 Slide 6.52 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 7.4 Main external and internal factors of matrices (adapted from Hax and Majluf, 1996: 302)

53 Slide 6.53 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Mintzberg... umbrella strategies: the broad outlines are deliberate while the details are allowed to emerge within them. Thus emergent strategies are not bad and deliberate ones good; effective strategies mix these characteristics in ways that reflect the conditions at hand, notably the ability to predict as well as the need to react to unexpected events. (Mintzberg, 1994: 25)


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