Strategy summary
Lecture 1: introduction
Different strategy levels:
- Network level: how do I operate within my industry? Competition or friends?
- Corporate level: what should my company look like?
- Business level: operating unit, how to position your firm and how to compete.
- Functional level: how to organize various functions of the organization?
2 ways to discover the different theories
1. Tool-driven: study and understand each theory separately and use or combine these
theories.
2. Problem-driven: first understand the problem, then the theory you choose must fit the type
of problem you’re dealing with.
2 types of problems that both need to be tackled differently
1. Either/or problems:
- Puzzles: challenging problem with an optimal solution, but difficult to find.
- Dilemmas: an annoying problem with two possible solutions, which both have
(dis)advantages.
2. Both/and problems:
- Trade-offs: many possible solutions, all of which give a different balance between two
conflicting areas. Once a choice has been made the balance is unstable.
- Paradoxes: situation where two seemingly opposite factors both seem to be good and
therefore try to get the best of both worlds.
Dialectical approach
Contains 2 opposite positions called the thesis and antithesis of a debate, challenging the
reader to search for an appropriate option to manage the two tensions.
Managing strategy paradoxes
Understanding a problem is a good start, but a manager also needs to know how to deal with it
effectively. 6 options for how to deal with paradoxes in general:
1. Navigating: focus on one contradiction at a time.
2. Parallel processing: dividing the opposing requirements from each other into departments
(internal) or in a partnership (external) and then working on them at the same time.
,3. Balancing: also called dynamic balance.
4. Juxtaposing: simultaneously managing different requirements on an ongoing basis, for
example competing and collaborating at the same time.
5. Resolving: achieving a higher level of balance using the balance sheet.
6. Embracing: using tension as a source of creativity and opportunity.
Reading 1.1Complexity: the nature of real world problems (Richard Mason Ian Mitroff)
Every ‘real-world’ problem is connected to another. So when addressing a specific policy
problem, a policymaker must also look at other problems and potential relationships.
Characteristic policy making: these problems are interlinked, a solution to one problem must
also be a solution to all the others.
Environmental connectedness: connectedness between systems. Deviations in one element are
transferred to other elements, which can increase the deviations even more. This is also called
a turbulent environment, in which complex relationships play under the surface.
Wicked problems: an entangled web of tentacles. The more you try to tame the problems, the
more complicated they become. Following characteristics:
- Interconnectedness: strong ties link each problem to other problems.
- Complicatedness
- Uncertainty: wicked problems exist in an uncertain environment, so must accept risks.
- Ambiguity: the problem can be seen in different ways, there is no one way.
- Conflict: may be conflicting interests around the problem, making it difficult to solve.
- Societal constraints
Tame problems are the complete opposite, they’re simple.
Method of doubt: do not reject or use things before it has been tested and proven, continue
looking for other ways until you know for sure, by f.e. asking questions pros and cons.
Dealing with organized complexity is based on these 4 things:
- Participative: active involvement of different groups of people.
- Hearing: doubts and counter-questions.
- Integration: it must form a complete picture together.
- Thinking process of the policy maker: gaining insight into the problem and its
complexity.
Reading 1.2 Managing strategic contradictions (Wendy Smith & Michael Tushmann)
2 criteria for balanced strategic decisions:
1. The ‘distributive nature’: balanced exchange, giving up one advantage for others.
2. The ‘integrative nature’: seeing possible synergy (total is more than the sum of its parts).
,Conflicts must be recognized and used instead of resolved.
Cognitive bias: how managers see a situation, search for information, and make decisions.
Cognitive frames: stable constructs that offer us a way to understand situations.
Cognitive processes: behavioral routines and managers’ views on information.
Paradoxical frames: mental constructs in which managers simultaneously recognize and
accept the existence of conflicting forces, such as differentiating versus integrating.
A paradox frame can improve organizational performance: because there are conflicting goals,
it is important to formulate them clearly. This ensures that the goals are achieved faster. A
paradox frame means that the manager assumes that both goals will succeed, despite the
inconsistency. As a result, there is less feeling of threat.
A paradox frame creates a basis for cognitive processes that can deal with inconsistencies: f.e.
emergence of online articles: successful newspaper saw it as an opportunity and separated the
2 forms of media. The less successful ones saw online as a threat and desperately tried to
make their newspapers better.
Leader-centric teams: integration of strategic conditions is mainly done by the leader of the
team.
Team-centric teams: integration of strategic conditions is done by the team itself through
social interactions within the team. Here team members have both the role of team member
and leader.
Reading 1.3 Cultural constraints in management theories (Geert Hofstede)
There are no such thing as universal management theories. Not only practical solutions, but
also the validity of theories stop at the borders of a country.
Often western management practices are transferred to poor countries, however this does
nothing for their development. You need historical and cultural insights into local conditions
to understand the processes and problems, not universal theories from other parts of the world
Culture: the collective programming of the mind that separates one group from another.
5 dimensions by which cultural differences between countries can be described:
- Power distance: the equality between different people in the population.
- Individualism: the extent to which people are individualistic (instead of collectivistic).
- Masculinity: assertiveness, performance, success, competition.
- Uncertainty avoidance: preferring structural security like rules and laws.
- Long-term vs Short-term: future oriented or present oriented.
, Lecture 2: Missioning & Visioning
Mission & Vision
The organizational mission can be seen as a kind of driving force that steers the organization
in the right direction.
Vision is a vision of the future one wants to achieve and can therefore be seen as the ambition
of an organization, while the mission contains more of the principles of the organization.
Function of the mission
- Direction: a mission gives the organization a certain direction.
- Legitimization: what are the norms and values of the organization and are these
accepted as well economically and socially.
- Motivation: the decisions that are made in an organization should be related to the
moral compass of the organization. Creates a certain culture.
An organizational mission can be divided into 4 elements
1. Organizational purpose: the reason why an organization exists.
2. Organizational philosophy or beliefs.
3. Organizational values: norms and values, behavior, and culture within an organization.
4. Business definition: most organizations have a clear identity and know what they do.
The strength of the mission depends on whether these 4 elements align and reinforce each
other. If this is the case, it creates an emotional bond between the members of the organization
The vision of an organization is also built on 4 components
1. Expected context/environmental characteristics: there are many contextual factors that can
influence the future of an organization; socio-cultural, economic, political, and technological.
2. Expected industrial environment: the development of contextual factors also influences an
organization’s industrial environment, such as suppliers, customers, rivals, and new entrants.
3. Desired organizational position for the future: fe want to be a market leader (long-term).
4. Time horizon: when developing the strategic vision, one must determine how many years
the vision will last. Time horizon often depends on the market.
To define a good vision, you need to have a broader view of everything that is happening
around your company. Looking at a broader context (trends and developments in the future).
Corporate governance is actually there to manage top management. Corporate governance
consists of a board of directors and, according to some, also of local and national authorities
and social groups.
Lecture 1: introduction
Different strategy levels:
- Network level: how do I operate within my industry? Competition or friends?
- Corporate level: what should my company look like?
- Business level: operating unit, how to position your firm and how to compete.
- Functional level: how to organize various functions of the organization?
2 ways to discover the different theories
1. Tool-driven: study and understand each theory separately and use or combine these
theories.
2. Problem-driven: first understand the problem, then the theory you choose must fit the type
of problem you’re dealing with.
2 types of problems that both need to be tackled differently
1. Either/or problems:
- Puzzles: challenging problem with an optimal solution, but difficult to find.
- Dilemmas: an annoying problem with two possible solutions, which both have
(dis)advantages.
2. Both/and problems:
- Trade-offs: many possible solutions, all of which give a different balance between two
conflicting areas. Once a choice has been made the balance is unstable.
- Paradoxes: situation where two seemingly opposite factors both seem to be good and
therefore try to get the best of both worlds.
Dialectical approach
Contains 2 opposite positions called the thesis and antithesis of a debate, challenging the
reader to search for an appropriate option to manage the two tensions.
Managing strategy paradoxes
Understanding a problem is a good start, but a manager also needs to know how to deal with it
effectively. 6 options for how to deal with paradoxes in general:
1. Navigating: focus on one contradiction at a time.
2. Parallel processing: dividing the opposing requirements from each other into departments
(internal) or in a partnership (external) and then working on them at the same time.
,3. Balancing: also called dynamic balance.
4. Juxtaposing: simultaneously managing different requirements on an ongoing basis, for
example competing and collaborating at the same time.
5. Resolving: achieving a higher level of balance using the balance sheet.
6. Embracing: using tension as a source of creativity and opportunity.
Reading 1.1Complexity: the nature of real world problems (Richard Mason Ian Mitroff)
Every ‘real-world’ problem is connected to another. So when addressing a specific policy
problem, a policymaker must also look at other problems and potential relationships.
Characteristic policy making: these problems are interlinked, a solution to one problem must
also be a solution to all the others.
Environmental connectedness: connectedness between systems. Deviations in one element are
transferred to other elements, which can increase the deviations even more. This is also called
a turbulent environment, in which complex relationships play under the surface.
Wicked problems: an entangled web of tentacles. The more you try to tame the problems, the
more complicated they become. Following characteristics:
- Interconnectedness: strong ties link each problem to other problems.
- Complicatedness
- Uncertainty: wicked problems exist in an uncertain environment, so must accept risks.
- Ambiguity: the problem can be seen in different ways, there is no one way.
- Conflict: may be conflicting interests around the problem, making it difficult to solve.
- Societal constraints
Tame problems are the complete opposite, they’re simple.
Method of doubt: do not reject or use things before it has been tested and proven, continue
looking for other ways until you know for sure, by f.e. asking questions pros and cons.
Dealing with organized complexity is based on these 4 things:
- Participative: active involvement of different groups of people.
- Hearing: doubts and counter-questions.
- Integration: it must form a complete picture together.
- Thinking process of the policy maker: gaining insight into the problem and its
complexity.
Reading 1.2 Managing strategic contradictions (Wendy Smith & Michael Tushmann)
2 criteria for balanced strategic decisions:
1. The ‘distributive nature’: balanced exchange, giving up one advantage for others.
2. The ‘integrative nature’: seeing possible synergy (total is more than the sum of its parts).
,Conflicts must be recognized and used instead of resolved.
Cognitive bias: how managers see a situation, search for information, and make decisions.
Cognitive frames: stable constructs that offer us a way to understand situations.
Cognitive processes: behavioral routines and managers’ views on information.
Paradoxical frames: mental constructs in which managers simultaneously recognize and
accept the existence of conflicting forces, such as differentiating versus integrating.
A paradox frame can improve organizational performance: because there are conflicting goals,
it is important to formulate them clearly. This ensures that the goals are achieved faster. A
paradox frame means that the manager assumes that both goals will succeed, despite the
inconsistency. As a result, there is less feeling of threat.
A paradox frame creates a basis for cognitive processes that can deal with inconsistencies: f.e.
emergence of online articles: successful newspaper saw it as an opportunity and separated the
2 forms of media. The less successful ones saw online as a threat and desperately tried to
make their newspapers better.
Leader-centric teams: integration of strategic conditions is mainly done by the leader of the
team.
Team-centric teams: integration of strategic conditions is done by the team itself through
social interactions within the team. Here team members have both the role of team member
and leader.
Reading 1.3 Cultural constraints in management theories (Geert Hofstede)
There are no such thing as universal management theories. Not only practical solutions, but
also the validity of theories stop at the borders of a country.
Often western management practices are transferred to poor countries, however this does
nothing for their development. You need historical and cultural insights into local conditions
to understand the processes and problems, not universal theories from other parts of the world
Culture: the collective programming of the mind that separates one group from another.
5 dimensions by which cultural differences between countries can be described:
- Power distance: the equality between different people in the population.
- Individualism: the extent to which people are individualistic (instead of collectivistic).
- Masculinity: assertiveness, performance, success, competition.
- Uncertainty avoidance: preferring structural security like rules and laws.
- Long-term vs Short-term: future oriented or present oriented.
, Lecture 2: Missioning & Visioning
Mission & Vision
The organizational mission can be seen as a kind of driving force that steers the organization
in the right direction.
Vision is a vision of the future one wants to achieve and can therefore be seen as the ambition
of an organization, while the mission contains more of the principles of the organization.
Function of the mission
- Direction: a mission gives the organization a certain direction.
- Legitimization: what are the norms and values of the organization and are these
accepted as well economically and socially.
- Motivation: the decisions that are made in an organization should be related to the
moral compass of the organization. Creates a certain culture.
An organizational mission can be divided into 4 elements
1. Organizational purpose: the reason why an organization exists.
2. Organizational philosophy or beliefs.
3. Organizational values: norms and values, behavior, and culture within an organization.
4. Business definition: most organizations have a clear identity and know what they do.
The strength of the mission depends on whether these 4 elements align and reinforce each
other. If this is the case, it creates an emotional bond between the members of the organization
The vision of an organization is also built on 4 components
1. Expected context/environmental characteristics: there are many contextual factors that can
influence the future of an organization; socio-cultural, economic, political, and technological.
2. Expected industrial environment: the development of contextual factors also influences an
organization’s industrial environment, such as suppliers, customers, rivals, and new entrants.
3. Desired organizational position for the future: fe want to be a market leader (long-term).
4. Time horizon: when developing the strategic vision, one must determine how many years
the vision will last. Time horizon often depends on the market.
To define a good vision, you need to have a broader view of everything that is happening
around your company. Looking at a broader context (trends and developments in the future).
Corporate governance is actually there to manage top management. Corporate governance
consists of a board of directors and, according to some, also of local and national authorities
and social groups.
