Mastering Strategic Management Chapter 1 Mastering Strategy Art

Mastering Strategic Management Chapter 1 Mastering Strategy: Art and Science This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Welcome to Strategy [ABCXXX] • • • Welcome Introduction to Business Policy – course outline Administrative Details Expectations (mine and yours) Student Success (advice) This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Learning Objectives • Insert from Course Outline This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Managing in the Real World This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

(IMHO) there are only 2 key Leadership Tasks • 1 - Manage the People (Up, Down, Sideways) • ‘People’ skills • Listening is #1 • Thank you is #2 • 2 - Set the long-term strategic direction • Where do you want to be in 5 years Hint, this course focuses on the latter!! Many other skills are required of course, but “when push comes to shove”, for everything else you can hire off the street, delegate, contract for… This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

What is Strategic Management? Examines how actions and events involving top executives (such as Steve Jobs), firms (Apple), and industries (the tablet market) influence a firm’s success or failure • Formal tools that exist for understanding these relationships are not enough • Creativity is just as important to strategic management http: //www. whatmakesagoodleader. com This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Choices http: //commons. wikimedia. org/wiki/File: Train_Track_Changing_System. JPG This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Why some Firms and not Others? Not Luck!! • Lots of Studies looking for Answer… • Part of the answer linked to Strategic Choices and execution! This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

A Gallery of Disruptive Technologies (2014 -2025, http: //www. mckinsey. com) This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

On the Horizon… • • • Climate Change Economic Booms & Busts Demographic Changes Energy Potable (drinkable) water shortage This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

What do all these potential things have in common? CHANGE… Disruptive technologies can & will change the game for businesses, creating entirely new opportunities, costs & value propositions. Business leaders must: • maintain a competitive strategy • continuously scan for new opportunities / challenges to existing profits centers • adopt use technologies to improve internal performance • keep employees’ skills up-to-date, right people on bus! • Balance potential benefits with This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

It’s not all strategy… But strategy (or lack of) explains a lot This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

For teaching in two 90 minute classes/wk, possible break point This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

14 Tic-Tac-Toe – What’s Your Strategy? You Go First! Make your Mark OK, my turn. Now you go X This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategy • Strategic management helps answer the key question: “why do some firms outperform other firms? ” • Examines how actions and events involving top executives, firms, and industries influence a firm’s success or failure • Various tools exist to analyse and understanding these relationships • But, creativity is central to strategic management; mastering strategy is therefore part and part science. This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategy as Plan • A strategic plan is a carefully crafted set of steps that a firm intends to follow to be successful. • Virtually every organization creates a strategic plan to guide its future • So should you…. This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

If you’re not going to have a strategy, the only interesting question is… 18 Will we be going in circles to the LEFT? X ‘Cause real process is pretty unlikely!! Or to the RIGHT? This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Business Model – Profit Plan! • Economies of Scale (lower costs) • Specialized Equipment (hotter ovens) • Expert pizza cooks (specilization) This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategy as Ploy • A strategic ploy is a specific move designed to outwit or trick competitors. • Ploys often involve using creativity to enhance success • Ploys can be especially beneficial in the face of much stronger opponents. • Military history offers quite a few illustrative examples This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategy as Pattern • Consistency of strategy over time • Kmart began straying from its established strategic pattern, from discount retailing and toward diversification including sporting goods (Sports Authority), building supplies (Builders Square), office supplies (Office. Max), and books (Borders) • In the 1990 s, Kmart’s strategy was again adjusted to emphasize information technology and supply chain management • Then Kmart’s strategy was to compete directly with its much-larger rival, Walmart. The resulting price war left Kmart crippled and eventually bankrupt This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategy as Position • Strategy as position—considers a firm and its competitors • Refers to a firm’s place in the industry relative to its competitors, leader, brand levels • Very hard to change position…. This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategy as Perspective • Strategy as perspective refers to how executives interpret the competitive landscape around them • Because each person is unique, 2 different executives could look at the same event—such as a new competitor emerging—and attach different meanings to it • One might just see a new threat to his or her firm’s sales; the other sees newcomer as potential ally • An old cliché “make lemons into lemonade” This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

1. 2 Intended, Emergent & Realized Strategies • Intended strategies: Strategy that an organization hopes to execute • Emergent strategies: Unplanned strategy that arises in response to unexpected opportunities and challenges • Realized strategies: The strategy that an organization actually follows. They are a product of both intended and realized strategies • Deliberate strategy: The parts of the intended strategy that an organization continues to pursue over time • Non-realized strategy: The parts of the intended strategy that are abandoned This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategies - Examples This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategies - Examples This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Strategies - Examples This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

A Model of Intended, Deliberate, and Realized Strategy (Figure 1. 3) This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

FED EX • Part Intended strategies: Packages sent through central hubs (like passengers) • Part Emergent strategies: Zap. Mail (Fax service that failed) • Realized strategies: The strategy that an organization actually follows, combo of both intended & realized strategies • Deliberate strategy: The parts of the intended strategy that an organization continues to pursue over time This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Regional Hub Model https: //flic. kr/p/6 m. HALH This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

1. 3 History of Strategic Management This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

History of Strategic Management This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

History of Strategic Management This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

History of Strategic Management This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

History of Strategic Management This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

The Modern History of Strategic Management Frederick Taylor, father of 'scientific management', testifying before Congress a hundred years ago: 'I can say, without the slightest hesitation, that the science of handling pig-iron is so great the man who is. . . physically able to handle pig-iron and is sufficiently phlegmatic and stupid to choose this for his occupation is rarely able to comprehend the science of handling pig-iron. ' This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Frederick W Taylor was a mechanical engineer & 1 st person to systemically study work. ‘Scientific management’ is responsible for tremendous surge of affluence in the last 75 years, lifting working masses in developed countries well above any level recorded before, even for the well-to-do. Taylor's scientific management consisted of four principles: • Replace rule-of-thumb work methods with methods based on a scientific study of the tasks • Scientifically select, train, and develop each employee rather than passively leaving them to train themselves • Provide "Detailed instruction & supervision of each worker in the performance of that worker's discrete task” • Divide work - managers apply scientific management principles to planning work & workers actually perform tasks This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Frank & Lillian Gilbreth Time & Motion Study in Bricklaying http: //youtu. be/l. Dg 9 REgk. CQk (1: 30 min) This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

The Modern History of Strategic Management This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

The Modern History of Strategic Management This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

1. 4 Understanding the Strategic Management Process BOTH AN ART & SCIENCE! Strategic management process: Building a careful understanding of how the world is changing & knowledge of how changes might affect a particular firm • Understanding strategy and performance • Environmental and Internal scanning • Strategy formulation • Strategy implementation This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Key Takeaways • Strategic management focuses on firms & different strategies used to become & remain successful • Multiple views of strategy exist, and the 5 Ps (Mintzberg) enhance understanding of the various ways in which firms conceptualize strategy • Most org create intended strategies they hope will lead to success • Over time, however, new opportunities & challenges emergent strategies • Realized strategies are a product of both intended and realized strategies This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science

Key Takeaways • Although strategic management as a field of study has developed mostly over the last century, the concept of strategy is much older • Understanding strategic management can benefit greatly by learning the lessons that ancient history and military strategy provide • Sometimes reducing size of firms maximize chances of success or survival, from modest steps such as retrenchment or more profound restructuring strategies This work is licensed under a Creative Commons Attribution 3. 0 Unported License (CC-BY). Mastering Strategic Management Chapter 1: Mastering Strategy: Art and Science