Samenvatting Organisation and Environment pre master Business Administration

INTRODUCTION

Learning objectives – a reminder
•To understand the premises, assumptions, and weaknesses of different schools of thought.
•To identify the most appropriate perspectives and approaches to analyse strategic challenges.
•To develop capabilities to tackle practical organizational problems.
•To enhance verbal and written communication abilities (group assignment)

You need to understand that we are looking at strategic issues from different perspectives.

What is strategy?
 Plan: consciously intended direction, guide, or course of action to move from a present state
to a (desired/imagined) future state.
 Ploy: a manoeuvre to outwit an opponent.
 Pattern: recognizable similar actions that emerge (intended or unintended) over time.
 Position: the organization’s location in the imaginary landscape of the competitive
environment.
 Perspective: the interpretation of managers of the organization and its environment

Prescriptive; Voorschrijvend, how they SHOULD do their strategies.
 Design school
 Planning school
 Positioning school

Descriptive; Beschrijvend, observerend.
 Entrepreneurial school
 Cognitive school
 Learning school
 Power school
 Cultural school
 Environmental school
 Configurational school


DESIGN SCHOOL (1)

Characteristics and premisses;
 Strategy formation as a deliberate process of conscious thought.
 One person develops strategy: CEO/Head of organization.
 Process of strategy formation should be simple and informal
 Strategies should be one of a kind.
 Strategy developed to attain match or fit between internal capabilities and external
possibilities.
− SWOT analysis
− Environment needs to be taken into account, navigated through but not interacted with.
 The strategy design process is complete when strategy appears fully formulated as a
perspective.
 This strategy is explicit.
 Implementation follows formulation and articulation.




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,SWOT = To formulate a strategy in Design school. Focussing on changes in environment but not
focussing enough on existing competition.
Strengths, weaknesses <<< Internal
Marketing, R&D, Management information systems, Management team, Operations, Finance, HR.
Opportunities and threats <<< External
Societal changes, Governmental changes, Economic changes, Competitive changes, Supplier changes, Market
changes.

Process;
1. Analysis; internal and external analysis (swot)
2. Formulation; social responsibility, managerial values
3. Implementation

Strategist;
 Strategist: CEO/head of organization
 Tasks:
 Gather information
 Analyze information
 Organize information
 Formulate strategy
 Idea of CEO to be main strategist is still very much alive:
 Uncommon CEO names lead to more deviating strategies (Kang, Zhu, & Zhang, 2021).
 CEO’s cognitive flexibility aids the development of dynamic capabilities (Kiss et al.,
2020).
 CEO characteristics determine the kind of acquisitions of a firm (Chen et al., 2020).

Organizational structure;
 Structure follows strategy.
 Strategy determines long-term goals and objectives, the course of action and
allocation of resources.
 Structure is the design through which to administer the strategy.
 Changes in an organization’s strategy lead to problems that require a new structure.

Design school summary assumptions:
1. The CEO/head of organization has complete and perfect information.
2. The CEO/head of organization has the mental/cognitive capacity to accurately process all
information.
3. The environment can always be understood.
4. Situations and environment are predictable.
5. All information is documented and available.
6. Strategy is centrally formulated.

Criticism/limitations;
 Structure follows strategy: unrealistic for most organizations.
 Assumption of universality.
 The capacity to learn is ignored by analytical assessment of environment and internal
capabilities.
 Promotion of inflexibility: hierarchical, centralized, and explicit strategy formulation.
 Detachment of thinking from acting.
 CEO/head of organization is unlikely to have all and perfect information and the capacity to
process this information.


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,  Economic man/Homo economicus: “Agent who has complete information about the options
available for choice, perfect foresight of the consequences from choosing those options, and
the wherewithal to solve an optimization problem that identifies an option which maximizes
the agent’s personal utility.”
 Bounded rationality: Rationality is limited, and individuals make imperfect decisions (Simon,
1957).
 Difficulty of the problem
 Boundaries to cognitive capability
 Limited time
 Criticizing is easy

Contributions;
 Vocabulary & tools
 Grand strategy
 Basic notion: fit between external environment and internal capabilities
 Started to promote the relevance of strategy in organizations and as a field of research


Exam information;
 Strategies should be explicit at all times, so they have to be kept simple.
 Design school should be unique
 Only after the definition of a unique, full blown, explicit, and simple strategy can it be fully
formulated and then implemented.
 The strategy formation process strategy must be kept simple and informal.
 The design school is most applicable for strategy formation in a stable environment, and
more implacable to young and entrepreneurial organizations because only 1 person does the
strategy.


PLANNING SCHOOL (2)

What is planning?
Planning: The establishment of goals, policies, and procedures for a social or economic unit
(Merriam-Webster).
In strategy, planning is: A formalized procedure to produce articulated results by using an integrated
system of decisions.

Origins;
 Military: Organizations and military organization must adapt to change and constantly
improve to gain/maintain an advantage.
 Strategy as a result of:
 Formal procedure
 Formal training
 Formal analysis
 Lots of numbers
 Difference: Organization strategy assume competition, military strategy assumes conflict

Characteristics and premises;
 Strategy is driven by insights into regularities.
 Strategy formation is a conscious, formal, and controlled process.
 Strategy is decomposed into distinct steps.

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,  Strategy formation is supported by checklists and analytical techniques.
 Rational and systematic approach to strategy making – affected by scientific management.
 Organizations are like machines.
 Organizations have a clear-cut system of values, competencies, and reward system;
 These are easy to recognize.
 Responsibilities are divided.
 Planning and implementation are separate, consecutive steps.
 The environment is stable and predictable

Scientific Management
 Theory of management that focuses on increasing economic efficiency, based on a logic of
science.
 Pioneered in the 1880s and 1890s by Frederick Taylor (hence also known as “Taylorism”).
 Managerial control to secure labor productivity.
 Predecessor of: Industrial engineering, operations management, total quality management,
Six Sigma, etc.

Process;
1. Objective setting (set a goal)
2. Analysis: external analysis; Forecast. Internal analysis; strengths and weaknesses.
3. Evaluation
4. Operationalization and scheduling (leads to a plan)

Zie powerpoint dia 10 van PLANNING SCHOOL.

Operational planning;
 Strategic goals linked to tactical goals and objectives.
 Elements:
 Milestones;
 Conditions for success;
 Phasing.
 Specifies the activities of the organization and resources required.
 Establishes budgets and activities for each part of the organization for the next 1-3 years.

Managing the future;
Strategy making as a formal process that conceives strategy as a plan: consciously intended course of
action to deal with a situation.
Planning for the future:
 Scenario planning 1
 Real options 2

!SCENARIO 1: if the future cannot be predicted, then by speculating on varieties of the future the
organization can prepare itself. Multiple scenarios, bet on:
 Probability;
 Profitability;
 Hedge;
 Flexibility;
 Make one happen

Shell 1, was one of the first who introduced scenario management, they called it long term studies:
• 1965: Activity “long-term studies”
• 1967: “Year 2000” study report

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