Summary Strategy and Organisation - Exam content week 1

Study content week 1
General information
1. What is the difference between competitive strategy and corporate
strategy?
a. Corporate strategy the overall strategy of a diversified firm
consisting of multiple business units; competitive strategy the
strategy of an individual business unit or a single-business firm
2. What is a core competence?
a. “The collective learning in the organization, especially how to
coordinate diverse production skills and integrate multiple streams
of technologies”: bundles of capabilities
3. What is strategic planning?
a. The act of developing detailed plans, goals, and budgets for the
different parts of a firm on the basis of formal and elaborate
analyses performed by planning staff
4. What is logical incrementalism?
a. The act of first establishing a broad strategic direction for a firm,
and then finetuning that direction through small, incremental
actions
5. What is an organizational culture?
a. A system of shared beliefs, assumptions, norms, values, and/or
symbols
6. What type of firm is a “defender”?
a. A firm with a stable set of products/customers, one main technology,
a focus on cost efficiency, and standardized work processes
7. What is organizational inertia?
a. The inability or unwillingness of employees to change
Strategy → the long-term plan/direction for an organization
Why do we need a strategy? → to know how to use resources.
 Asymetric information (agency)
 Cognitive limitation (bounded rationality)
 Irrational behavior
 Time limitation
 Reduce uncertainty
 Structure and organization
o You need a planning in order to establish your:
 strategic goals
 How to reach the goal → start from the end! (all this together is part of
your strategy)
What is strategy about?
 How to outperform competitors
 How to use your resources
 Which (foreign) markets to enter?
 How to develop new products
 How to create synergies
 With which firms to cooperate

,  How to realize organizational change
 How to stimulate entrepreneurship
 How to deal with environmental changes
Aspects of strategic management
 Content of strategy (wk 1, 2)
o What is a good (i.e., profitable) strategy
 Process of strategy (wk 3, 4, 6)
o How do strategies come into being?
 Context of strategy (wk 5)
o Does the content or process of strategy depend on the type of
organization, the industry, the international environment etc?




Content of the lectures: schedule of schools
Classifying the 12 schools
1. Strategy formulation (process) (focus on intended strategy):
a. Design, planning and vision schools
b. Design school: strategy formulation as a conception
i. Process, CEO formulates a clear, simple and unique strategy
(SWOT), strategy formulation is separated from
implementation
c. Planning school: strategy formulation as formal process
i. CEO responsible, but the process supported by strategic
planning staff, a hierarchy of detailed strategies, action
programs, objectives and budgets at the corporate, business
unit & functional level
d. Vision school: strategy formulation as providing direction
i. Top management ‘only’ develops a broad strategic direction,
room for lower-level contributions
2. Strategic analysis (content)
a. Positioning and resource based schools
b. Positioning school: outside-in
c. Resource based school: inside-out
3. Strategy formation (process) (focus on unplanned/implicit part of strategy)
a. Entrepreneur, power, cognitive & cultural schools
b. Entrepreneurship school: strategy stems from creative acts