Fit, equifinality, and organizational effectiveness: A test of two configurational theories. Academy of Management Journal , 36 6 , pp. Your Bibliography: Gallo, C. The Apple experience. In-text: Gualandris, Klassen, Vachon and Kalchschmidt, Your Bibliography: Gualandris, J. Sustainable evaluation and verification in supply chains: Aligning and leveraging accountability to stakeholders.
Journal of Operations Management , 38, pp. Your Bibliography: Hart-Davis, G. Samsung Galaxy Tab. Your Bibliography: Hausmann, D. Pathway to value creation. Your Bibliography: Hill, C. Australia: Cengage Learning.
Your Bibliography: Hosni, W. Apple Value Chain Analysis. France: NAPC. Your Bibliography: Hughes, P. Your Bibliography: Huimin, M. China: Wuhan University of Technology. Your Bibliography: IDC, IDC Home: The premier global market intelligence firm.
Your Bibliography: Karsenti, T. The iPad in education: uses, benefits, and challenges — A survey of 6, students and teachers in Quebec. Your Bibliography: Kim, W. Blue ocean strategy. Your Bibliography: Kraemer, K. California: University of California. In the field of business administration it is useful to talk about "strategic alignment" between the organization and its environment or "strategic consistency".
According to Arieu , "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context. Strategic Management Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.
Lamb, ix [2] Strategy formulation Strategic formulation is a combination of three main processes which are as follows: Performing a situation analysis, self-evaluation and competitor analysis: both internal and external; both micro-environmental and macro-environmental. Concurrent with this assessment, objectives are set. These objectives should be parallel to a time-line; some are in the short-term and others on the long-term.
This involves crafting vision statements long term view of a possible future , mission statements the role that the organization gives itself in society , overall corporate objectives both financial and strategic , strategic business unit objectives both financial and strategic , and tactical objectives. These objectives should, in the light of the situation analysis, suggest a strategic plan. The plan provides the details of how to achieve these objectives.
Strategy evaluation Measuring the effectiveness of the organizational strategy, it's extremely important to conduct a SWOT analysis to figure out the strengths, weaknesses, opportunities and threats both internal and external of the entity in question.
This may require to take certain precautionary measures or even to change the entire strategy. In corporate strategy, Johnson and Scholes present a model in which strategic options are evaluated against three key success criteria: Suitability would it work?
Feasibility can it be made to work? Acceptability will they work it? Suitability Suitability deals with the overall rationale of the strategy. The key point to consider is whether the strategy would address the key strategic issues underlined by the organisation's strategic position. Does it make economic sense? Would the organization obtain economies of scale, economies of scope or experience economy?
Would it be suitable in terms of environment and capabilities? Tools that can be used to evaluate suitability include: Ranking strategic options Decision trees Feasibility Feasibility is concerned with whether the resources required to implement the strategy are available, can be developed or obtained. Resources include funding, people, time and information. Tools that can be used to evaluate feasibility include: cash flow analysis and forecasting break-even analysis resource deployment analysis Acceptability Acceptability is concerned with the expectations of the identified stakeholders mainly shareholders, employees and customers with the expected performance outcomes, which can be return, risk and stakeholder reactions.
Return deals with the benefits expected by the stakeholders financial and non-financial. For example, shareholders would expect the increase of their wealth, employees would expect improvement in their careers and customers would expect better value for money. Risk deals with the probability and consequences of failure of a strategy financial and non-financial.
Stakeholder reactions deals with anticipating the likely reaction of stakeholders. Shareholders could oppose the issuing of new shares, employees and unions could oppose outsourcing for fear of losing their jobs, customers could have concerns over a merger with regards to quality and support.
Tools that can be used to evaluate acceptability include: what-if analysis stakeholder mapping General approaches In general terms, there are two main approaches, which are opposite but complement each other in some ways, to strategic management: The Industrial Organizational Approach based on economic theory deals with issues like competitive rivalry, resource allocation, economies of scale assumptions rationality, self discipline behaviour, profit maximization The Sociological Approach deals primarily with human interactions assumptions bounded rationality, satisfying behaviour, profit sub-optimality.
An example of a company that currently operates this way is Google Strategic management techniques can be viewed as bottom-up, top-down, or collaborative processes.
In the bottom-up approach, employees submit proposals to their managers who, in turn, funnel the best ideas further up the organization. This is often accomplished by a capital budgeting process. Proposals are assessed using financial criteria such as return on investment or cost-benefit analysis. Cost underestimation and benefit overestimation are major sources of error. The proposals that are approved form the substance of a new strategy, all of which is done without a grand strategic design or a strategic architect.
The top-down approach is the most common by far. In it, the CEO, possibly with the assistance of a strategic planning team, decides on the overall direction the company should take. Some organizations are starting to experiment with collaborative strategic planning techniques that recognize the emergent nature of strategic decisions.
The outcome comprises both the desired ending goal and the plan designed to reach that goal. Managing strategically requires paying attention to the time remaining to reach a particular level or goal and adjusting the pace and options accordingly. Strategic decisions should be based on the understanding that the value-add of whatever you are managing is a constantly changing reference point. An objective that begins with a high level of value-add may change due to influence of internal and external factors.
Strategic management by definition, is managing with a heads-up approach to outcome, time and relative value, and actively making course corrections as needed. The strategy hierarchy In most large corporations there are several levels of management.
Strategic management is the highest of these levels in the sense that it is the broadest - applying to all parts of the firm - while also incorporating the longest time horizon. It gives direction to corporate values, corporate culture, corporate goals, and corporate missions.
Under this broad corporate strategy there are typically business-level competitive strategies and functional unit strategies. Corporate strategy refers to the overarching strategy of the diversified firm. Such a corporate strategy answers the questions of "which businesses should we be in? According to Michael Porter, a firm must formulate a business strategy that incorporates either cost leadership, differentiation or focus in order to achieve a sustainable competitive advantage and long-term success in its chosen areas or industries.
Alternatively, according to W. Chan Kim and Rene Mauborgne, an organization can achieve high growth and profits by creating a Blue Ocean Strategy that breaks the previous value-cost tradeoff by simultaneously pursuing both differentiation and low cost. Functional strategies include marketing strategies, new product development strategies, human resource strategies, financial strategies, legal strategies, supply-chain strategies, and information technology management strategies. The emphasis is on short and medium term plans and is limited to the domain of each departments functional responsibility.
Each functional department attempts to do its part in meeting overall corporate objectives, and hence to some extent their strategies are derived from broader corporate strategies. Many companies feel that a functional organizational structure is not an efficient way to organize activities so they have reengineered according to processes or SBUs.
A strategic business unit is a semi-autonomous unit that is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting. An SBU is treated as an internal profit centre by corporate headquarters.
A technology strategy, for example, although it is focused on technology as a means of achieving an organization's overall objective s , may include dimensions that are beyond the scope of a single business unit, engineering organization or IT department. An additional level of strategy called operational strategy was encouraged by Peter Drucker in his theory of management by objectives MBO. It is very narrow in focus and deals with day- to-day operational activities such as scheduling criteria.
It must operate within a budget but is not at liberty to adjust or create that budget. Operational level strategies are informed by business level strategies which, in turn, are informed by corporate level strategies. Since the turn of the millennium, some firms have reverted to a simpler strategic structure driven by advances in information technology. It is felt that knowledge management systems should be used to share information and create common goals.
Strategic divisions are thought to hamper this process. This notion of strategy has been captured under the rubric of dynamic strategy, popularized by Carpenter and Sanders's textbook 1. This work builds on that of Brown and Eisenhart as well as Christensen and portrays firm strategy, both business and corporate, as necessarily embracing ongoing strategic change, and the seamless integration of strategy formulation and implementation.
Such change and implementation are usually built into the strategy through the staging and pacing facets. Historical development of strategic management Birth of strategic management Strategic management as a discipline originated in the s and 60s. Although there were numerous early contributors to the literature, the most influential pioneers were Alfred D.
Alfred Chandler recognized the importance of coordinating the various aspects of management under one all-encompassing strategy. Prior to this time the various functions of management were separate with little overall coordination or strategy. Interactions between functions or between departments were typically handled by a boundary position, that is, there were one or two managers that relayed information back and forth between two departments.
Chandler also stressed the importance of taking a long term perspective when looking to the future. In his groundbreaking work Strategy and Structure, Chandler showed that a long-term coordinated strategy was necessary to give a company structure, direction, and focus. He says it concisely, structure follows strategy.
Strengths and weaknesses of the firm are assessed in light of the opportunities and threats from the business environment. Igor Ansoff built on Chandler's work by adding a range of strategic concepts and inventing a whole new vocabulary.
He developed a strategy grid that compared market penetration strategies, product development strategies, market development strategies and horizontal and vertical integration and diversification strategies. He felt that management could use these strategies to systematically prepare for future opportunities and challenges.
In his classic Corporate Strategy, he developed the gap analysis still used today in which we must understand the gap between where we are currently and where we would like to be, then develop what he called gap reducing actions. His contributions to strategic management were many but two are most important. Firstly, he stressed the importance of objectives. An organization without clear objectives is like a ship without a rudder. As early as he was developing a theory of management based on objectives.
According to Drucker, the procedure of setting objectives and monitoring your progress towards them should permeate the entire organization, top to bottom. His other seminal contribution was in predicting the importance of what today we would call intellectual capital. He predicted the rise of what he called the knowledge worker and explained the consequences of this for management. He said that knowledge work is non-hierarchical. Work would be carried out in teams with the person most knowledgeable in the task at hand being the temporary leader.
In , Ellen-Earle Chaffee summarized what she thought were the main elements of strategic management theory by the s: 7 Strategic management involves adapting the organization to its business environment. Strategic management is fluid and complex. Change creates novel combinations of circumstances requiring unstructured non-repetitive responses. Strategic management affects the entire organization by providing direction. Strategic management involves both strategy formation she called it content and also strategy implementation she called it process.
Strategic management is partially planned and partially unplanned. Strategic management is done at several levels: overall corporate strategy, and individual business strategies.
Strategic management involves both conceptual and analytical thought processes. Growth and portfolio theory In the s much of strategic management dealt with size, growth, and portfolio theory. Started at General Electric, moved to Harvard in the early s, and then moved to the Strategic Planning Institute in the late s, it now contains decades of information on the relationship between profitability and strategy.
Their initial conclusion was unambiguous: The greater a company's market share, the greater will be their rate of profit.
The high market share provides volume and economies of scale. It also provides experience and learning curve advantages. The combined effect is increased profits.
The benefits of high market share naturally lead to an interest in growth strategies. The relative advantages of horizontal integration, vertical integration, diversification, franchises, mergers and acquisitions, joint ventures, and organic growth were discussed. The most appropriate market dominance strategies were assessed given the competitive and regulatory environment. There was also research that indicated that a low market share strategy could also be very profitable. Schumacher , 9 Woo and Cooper , 10 Levenson , 11 and later Traverso 12 showed how smaller niche players obtained very high returns.
By the early s the paradoxical conclusion was that high market share and low market share companies were often very profitable but most of the companies in between were not. This was sometimes called the hole in the middle problem. This anomaly would be explained by Michael Porter in the s. The management of diversified organizations required new techniques and new ways of thinking. GM was decentralized into semi- autonomous strategic business units SBU's , but with centralized support functions.
One of the most valuable concepts in the strategic management of multi-divisional companies was portfolio theory. In the previous decade Harry Markowitz and other financial theorists developed the theory of portfolio analysis. It was concluded that a broad portfolio of financial assets could reduce specific risk.
In the s marketers extended the theory to product portfolio decisions and managerial strategists extended it to operating division portfolios. Each of a companys operating divisions were seen as an element in the corporate portfolio. Each operating division also called strategic business units was treated as a semi-independent profit center with its own revenues, costs, objectives, and strategies. Several techniques were developed to analyze the relationships between elements in a portfolio.
Analysis, for example, was developed by the Boston Consulting Group in the early s. This was the theory that gave us the wonderful image of a CEO sitting on a stool milking a cash cow. Shortly after that the G. Companies continued to diversify until the s when it was realized that in many cases a portfolio of operating divisions was worth more as separate completely independent companies.
The marketing revolution The s also saw the rise of the marketing oriented firm. From the beginnings of capitalism it was assumed that the key requirement of business success was a product of high technical quality. If you produced a product that worked well and was durable, it was assumed you would have no difficulty selling them at a profit.
This was called the production orientation and it was generally true that good products could be sold without effort, encapsulated in the saying "Build a better mousetrap and the world will beat a path to your door. But after the untapped demand caused by the second world war was saturated in the s it became obvious that products were not selling as easily as they had been.
The answer was to concentrate on selling. The s and s is known as the sales era and the guiding philosophy of business of the time is today called the sales orientation. In the early s Theodore Levitt and others at Harvard argued that the sales orientation had things backward. They claimed that instead of producing products then trying to sell them to the customer, businesses should start with the customer, find out what they wanted, and then produce it for them.
Enter the email address you signed up with and we'll email you a reset link. Need an account? Click here to sign up. Download Free PDF. Intan Meisari. A short summary of this paper. Mission Statement — What is our business? Perform External Audit 3. Your Bibliography: Porter, M. Harvard Business Review , [online] 86 1 , pp. Your Bibliography: Stone, M. Research on Strategic Management in Nonprofit Organizations. In-text: Thompson, Peteraf, Gamble and Strickland, Your Bibliography: Thompson, A.
Crafting and executing strategy: the quest for competitive advantage, concepts and cases. Not logged in. Log in or create an account. Click here to start building your own bibliography. Keep on Citing!
0コメント