Summary of the slides and articles of Strategic Organizational Design

Strategic Organiza-onal Design summary


Table of contents

Strategic Organiza-onal Design summary ....................................................................................................... 1
Introduc)on ........................................................................................................................................................ 2
Slides .............................................................................................................................................................. 2
Ar,cles ........................................................................................................................................................... 3
External analysis: The Environment .................................................................................................................... 8
Slides .............................................................................................................................................................. 8
Ar,cles ......................................................................................................................................................... 10
Internal analysis: Resources and Capabili)es ................................................................................................... 16
Slides ............................................................................................................................................................ 16
Ar,cles ......................................................................................................................................................... 17
Strategic Risk Analysis ...................................................................................................................................... 18
Slides ............................................................................................................................................................ 18
Ar,cles ......................................................................................................................................................... 19
Interna)onal Strategy....................................................................................................................................... 20
Slides ............................................................................................................................................................ 20
Ar,cle........................................................................................................................................................... 23
Corporate Strategy ........................................................................................................................................... 28
Slides ............................................................................................................................................................ 28
Ar,cles ......................................................................................................................................................... 32
Strategic Management of Innova)on ............................................................................................................... 35
Slides ............................................................................................................................................................ 35
Ar,cles ......................................................................................................................................................... 38



Upon the comple,on of the course, students should be able to:
(1) demonstrate a mastery of the issues relevant to strategic management;
(2) design, plan, and coordinate research related to the strategy of the firm;
(3) conduct an external analysis of the firms’ environment;
(4) conduct an internal analysis of the firm’s resources and competences;
(5) use theories/models to generate a range of possible strategies for the firm;
(6) use theories/models to consider possible organiza,onal designs;
use theories/models to jus,fy the subsequent strategic choices.

,Introduc)on
Slides




Everything should them from your mission and goals.
Strategy is about finding the fit. When this is formulated it
needs to be implemented and monitored.

Strategy has a lot of different defini3ons, and not one
is completely right.

Mintzberg’s Five P’s for strategy:
(1) Plan: brainstorming op3ons and planning how to deliver them.
(2) Ploy: geFng the beGer of compe3tors, by ploFng to disrupt, dissuade, discourage, or
otherwise influence them, can be part of a strategy.
(3) PaGern: when mul3ple people are doing something that creates a paGern that makes an
emergent strategy.
(4) Posi3on: based on the posi3on is how profitable it is.
(5) Perspec3ve: in airlines only rich people make use of this industry.

Defini3on of strategy:
Strategy should be means to an end. It implies some kind of ac3on. It should be inten3onal.
If it is an emergent strategy, you can only act on it when it creates a paGern.

How to evaluate strategy:
Consistency: it’s good when it's internally consistent.
Consonance: the organiza3on fiFng in the environment (the industry).
Advantage: does it help you to achieve the objec3ves?
Feasibility: is it going to achieve the strategy with the resources that you have?

,Ar*cles
Porter, M.E., 1996 What is Strategy? Harvard Business Review, 74(6), 61-80.
Companies must be flexible to respond rapidly to compe,,ve market changes. They must outsource
aggressively to gain efficiencies, plus they must nurture a few core competencies in race to stay
ahead of rivals.

Some barriers to compe,,on are falling as regula,on eases and markets become global. The root of
the problem is the failure to dis,nguish between opera,onal effec,veness and strategy.

Opera,oanl effec,veness and strategy are both essen,al to superior performance. But they work in
different ways.

A company can outperform rivals only if it can establish a difference than it can preserve. It must
deliver greater value to customers or create comparable value at a lower cost. Delivering greater
value allows a company to charge higher average unit prices; greater efficiency results in lower
average unit cost.

Cost advantage arises from performing par,cular ac,vi,es more efficiently than compe,tors.

Opera,onal effec,vess (OE): performing similar ac,vi,es beZer than rivals perform them. Strategic
posi,oning: performing different ac,vi,es from rivals’ or performing similar ac,vi,es in different
ways.

When a company improves its opera,onal effec,veness, it moves toward the fron,er. The
produc,vity fron,er is constantly shi[ing outward as new technologies and management approaches
are developed and as new inputs become available.

Origins of strategic posi,ons:
- Variety-based posi,oning; based on the choice of product or service varie,es rather than
customer segments.
- Needs-based posi,oning
- Access-based posi,oning; can be a func,on of customer geography or customer scale or of
anything that requires a different set of ac,vi,es to reach customers in the best way.

Strategy: the crea,on of an unique and valuable posi,on, involving a different set of ac,vi,es.

Choosing a unique posi,on, however, is not enough to guarantee a sustainable advantage. A valuable
posi,on will aZract imita,on by incumbents, who are likely to copy it in one of two ways.
- A compe,tor can reposi,on itself to match the superior performer.
- Stradling: seeks to match the benefits of a successful posi,on while maintaining its exis,ng
posi,on.

A strategic posi,on is not sustainable unless there are trade-offs with other posi,ons.

Trade-offs arise for three reasons:
1. Inconsistencies in image or reputa,on
2. Arise from ac,vi,es themselves
3. Arise from limits on internal coordina,on and control; by clearly choosing to compete in one way
and not another, senior management makes organiza,onal priori,es clear.

, In general, false trade-offs between cost and quality occur primarily when there is redundant or
wasted effort, poor control or accuracy, or weak coordina,on. Simultaneous improvement of cost
and differen,a,on is possible only when a company begins far behind the produc,vity fron,er or
when the fron,er shi[s outward. At the fron,er, where companies have achieved current best
prac,ce, the trade-off between cost and differen,a,on is very real indeed.

Strategy is making trade-offs in compe,ng. There are three types of fit, although they are not
mutually exclusive:
1. First-order fit is simple consistency between each ac,vity and the overall strategy. Consistency
ensures that the compe,,ve advantages of ac,vi,es cumulate and do not erode or cancel
themselves out.
2. Second-order fit occurs when ac,vi,es are reinforcing.
3. Third-order fit goes beyond ac,vity reinforcement to what I call op,miza,on of effort.

Coordina,on and informa,on exchange across ac,vi,es to eliminate redundancy and minimize
wasted effort are the most basic types of effort op,miza,on.

Strategic fit among many ac,vi,es is fundamental not only to compe,,ve advantage but also to the
sustainability of that advantage.

When ac,vi,es complement one another, rivals will get liZle benefit from imita,on uless they
successfully match the whole system. Such situa,ons tend to promote winner-take-all compe,,on.

Improving OE (opera,onal effec,veness) is a necessary part of management, but it is not strategy.