Strategies for a New Millennium

1
Strategies for a New Millennium
OUTLINE

• The New Environment of Business
• Directions in Strategic Management Practice
• Directions in Strategic Management Thinking
• The Knowledge-based View
• New Organizational Forms

2
Directions in Strategic Management Practice

• Key trends of the 1990s
• Quest for shareholder value
• Adjusting to turbulence

• Outcomes
• Cost cutting Shift to dynamic sources of
  efficiency
• Refocusing on performance management and
  performance incentives

• Major influences on strategy
• Resources, capabilities, and core competences
• Dynamic aspects of competition ---game theory,
  Schumpetarian competition
• Competitive advantage through networks, standard,
  bandwagons
• Modern financial analysis---shareholder value,
  economic profit, option theory

3
New Directions in Strategic Thinking

• BEYOND DOWNSIZING
• Gains form cost cutting and downsizing largely
  exhausted
• Need to access new sources of profitability

• IMPLICATIONS
• Emphasis on more complex sources of competitive
  advantage requires development of architectural
  or meta capabilities
• Emphasis on learning
• Need for new organizational forms e.g. interest
  in self-organization

4
Knowledge Management and the Knowledge-Based View
of the Firm

• KNOWLEDGE UTILIZATION
• Need to identify knowledge with the firm ----
  role of knowledge audits, competency modeling,
  knowledge libraries, identification of best
  practices
• Need to transfer knowledge
• Critical distinction between tacit and explicit
  knowledge
• Need to transform tacit into explicit knowledge
• Design of organization structure to optimize
  knowledge use location of knowledge and
  decision making knowledge integration through
  teams modular structures
• KNOWLEDGE CREATION
• Traditional view knowledge created through
  research
• Nonaka Knowledge creation through knowledge
  conversion (explicit tacit individual
  firm

5
New Organizational Forms
Process-based organizations Organizing around
business processes Recognizing
corporate processes -
entrepreneurial process - competence
building process - renewal process
Project-based organization engineering cos.,
consulting cos., also manufacturing cos.
e.g. Oticon
Parallel structures separate structures of
separate management processes e.g. 3M,
TQM, change management process
Network and Virtual Organization the
boundaryless corporation e.g. Sun
Microsystems, Cisco Systems, Italian
clothing manufacturers
6
New Models of Leadership

• THE LEADERSHIP NEEDS
• OF ORGANIZATIONS
• The ability to
• build confidence
• build enthusiasm
• cooperate
• deliver results
• form networks
• influence others
• use information

• THE REQUIRED
• COMPETENCIES OF
• BUSINESS LEADERS
• business literacy
• creativity
• cross-cultural
• effectiveness
• empathy
• flexibility
• proactivity
• problem-solving
• relation-building
• teamwork
• vision