Management Strategy and Policy

1
Management Strategy and Policy

• What is Strategy
• What is Strategic Planning
• The cases for and against
• Strategic Planning

2
Definitions of Strategy

• Strategy is an action that a company takes to
  attain one or more of its goals
• Most definitions of strategy focus on a rational
  planning process leading to the development of
  the companys strategy.
• Strategic Management aims to identify why some
  organisations succeed and others fail

3
The Strategic Planning Process (See Figure 1.4)

• Defining the Mission and Major Goals
• Analyzing external and internal environment
  (SWOT)
• Choosing Functional-level, Business-level-Global
  and Corporate -level Strategies
• Implementing strategy
• Designing the organizational structure
• Designing control systems
• Matching strategy structure and controls
• Managing change

4
Critics of the Traditional Strategic Planning
Model

• The World is unpredictable There are problems
  with knowing all what is really happening in the
  environment, so it might be safer to focus on
  small steps (Quinn)
• There is too much emphasis on formulating
  strategy and not enough on implementing strategy
• Strategic Planning fails because senior
  executives have an Ivory Tower Mentality and
  loose touch with the reality of day to day
  operations

5
Critics of the Traditional Strategic Planning
ModelIntent, resources and capabilities

• The traditional model concentrates too much on
  how the organization fits its environment, and
  how it uses existing resources to exploit current
  opportunities. It needs also to focus on building
  new resources and capabilities to create and /or
  take advantage of new opportunities ( Hamel and
  Prahalad)
• Strategic Intent An obsession for achieving
  ambitious objectives that are greater than their
  existing resources and capabilities allow. This
  means new resources and capabilities need to be
  developed ( Hamel and Prahalad)

6
Critics of the Traditional Strategic Planning
ModelEmergent vs. Intended Strategy

• Strategy can also be a Emergent, based on a
  consistent pattern of actions, as well as
  Intended (Planned)
• Strategy can come from the actions of lower level
  employees responding to the environment
• Five Ps of Strategy Plan, Ploy, Pattern,
  Perspective and Position Mintzberg)
• Intended strategy may be Realized ( it happened
  as planned) or Unrealized ( it didnt happen as
  planned)

7
Types of Managers

• General Managers
• Responsible for overall performance
• Focus on strategic issues
• Functional Managers
• Responsible for a business function
• Have important strategic responsibilities, but
  can not see the big-picture because of their
  position in the company

8
What makes a good strategic leader?(Text 4th ed.
pp 14 -16)

• Vision, eloquence and consistency
• Commitment
• Being well informed
• Willingness to delegate and empower
• Astute use of power

9
Strategic Decision Making

• Limitations to effective strategic decision
  making include
• Groupthink
• Cognitive Biases
• Prior hypotheses
• Escalating Commitment
• Representativeness
• Illusion of Control
• Devils Advocacy and Dialectic Enquiry are
  methods that can improve decision making
  effectiveness