Prof. Dr.

Jörg Freiling
freiling@uni-bremen.de

Concepts of Management
Jagiellonian University of Cracow
1st year, Business & Finance Management Program
Winter Term 2018/19
 Overview

Basics of Management

Day 1 – 17 Oct The ‘VUCA’ World and Management Course Coordination

Overview of Management Concepts

Day 2 – 19 Oct Day 3 – 21 Nov Day 4 – 23 Nov Day 5 – 19 Dec

Concepts of the Concepts of the Presentations of the Final Case (cross-

Managerial Style Hybrid Style (cont’d.) texts on the hybrid subject case, distributed
style at the beginning of the
Concepts of the Concepts of the day):
Hybrid Style Entrepreneurial Style Presentations of the
texts on the Team-based Elaboration;
1st case study: Dell Presentations of the entrepreneurial style Presentation;
Computer Corp. texts on the Discussion; Submission
(including managerial style 3rd case study: of Material.
reflections from SportsGear (including
non-presenting 2nd case study: NBIC reflections from non-
students) (including reflections presenting students)
from non-presenting
students)

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Basics of Management
Management – and its face(t)s

Content

Context Process

Management

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 Context Dimension: Strategic Planning

SWOT Analysis

Internal context: External context:

strengths and opportunities and
weaknesses threats

Business Units Economy

Products Technology

Activities Social and cultural sphere

Resources Political sphere

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 Context Dimension: Techniques

Internal context External context

- Portfolio analysis and management - Delphi analysis

- Product lifecycle analysis - Scenario technique
- Business process analysis - Market research
- Resource check-up - Technological roadmapping
- … - …

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 Content Dimension

- What is strategy?

- What is management? (cf. follow-up section on

management, leadership and entrepreneurship)

- What are the layers of management?

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 Content. Facet #1 – it’s all about goals

WHAT IS STRATEGY (1)?

- An overview of different perspectives in literature -

Chandler, A.D.:
"... the determination of the long run goals and objectives of an enterprise, and the adoption of
courses of action and the allocation of resources necessary for carrying out these goals."

Quinn, J.B.:
"A strategy is a pattern or a plan that integrates an organization's major goals, policies, and
action sequences into a cohesive whole. A well-formulated strategy helps to marshal and
allocate an organization's resources into a unique and viable posture based upon its relative
internal competences and shortcomings, anticipated changes in the environment, and
contingent moves by intelligent opponents."

Stoner, J.A.F./Freeman, R.E./Gilbert, D.R.:

"the broad program for defining and achieving an organization's objectives; the organization's
response to its environment over time."

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Goals…

Values and
Increasing Vision
concretization of the
goals means/ends
Corporate mission relationship

Goals of the corporate level

Goals of the department resp. SBU level

Operational goals

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 Content. Facet #2 – it’s all about SCA

WHAT IS STRATEGY (2)?

- An overview of different perspectives in literature -

Groenhaug/Nordhaug 1992, p. 439:

"Strategy involves efforts directed at creating the best possible use of the resources
possessed by the firm. Emphasis is placed on the utilization of the organization's relative
advantages vis-a-vis the competitors in its efforts to serve the market."

Ohmae, K.:
"What business strategy is all about is, in a word, competitive advantage. (...) The sole purpose
of strategic planning is to enable a company to gain, as efficiently as possible, a sustainable
edge over its competitors. Corporate strategy thus implies an attempt to alter a company's
strenghts relative to that of its competitors in the most efficient way."

Day/Wensley 1988, p. 1:
"Strategy is about seeking new edges in a market while slowing the erosion of present
advantages."

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Sustaining Competitive Advantage

economy technology

customer

preferences preferences
SCA

cost
corporation competitors

law society

environmental conditions

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 Content. Facet #3 – it’s all about positioning

WHAT IS STRATEGY (3)?

- An overview of different perspectives in literature -

Porter, M.E. (1996, pp. 68, 70, 75): Three basic elements of strategy
(1) Positioning: "Strategy is the creation of a unique and valuable position, involving a different
set of activities. (...) The essence of strategic positioning is to choose activities that are
different from the rivals'."
(2) Trade-offs: "Strategy is making trade-offs in competing. The essence of strategy is
choosing what not to do. Without trade-offs, there would be no need for choice and thus no
need for strategy. Any good idea could and would be quickly imitated."
(3) Fit: "Strategy is creating a fit among a company's activities. The success of a strategy
depends on doing many things well - not just a few - and integrating among them. If there is no
fit among activities, there is no distinctive strategy and little sustainability."

Day, G.S. (1984):

"A strategy provides a logic that integrates the parochial perspectives of functional
departments and operating units, and points them all in the same direction. Otherwise, each
function will do what it thinks important or serves its immediate interests."

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Productivity Frontier

13
 Management Layers

Layer Objective Subject

Definition of object and purpose, and the

Normative Legitimacy
principles of the company

Build up, maintain and further develop

Strategic Effectiveness
success potentials

Ensure optimum utilization of success

Operational Efficiency
potentials

Source: Seisreiner 2007

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 Business vs. Corporate Strategy (Grant, 1996)

Industry
attractiveness

Corporate
Rate of profit Which industries strategy
above the should we be in?
competitive
level

How do we make
money?
Competitive
advantage

How should we Business

compete? strategy

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 Process Dimension

2 different view on the process dimension:

(1) Linear or quasi-linear procedure from planning to

implementation

(2) Strategy as a process (of finding a more or less aligned

way and program)

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 Linear Process Approach: Gulick‘s „POSDCORB“ Model

• P – Planning
• O – Organizing
• S – Staffing
• D – Directing
• CO – Coordinating
• R – Reporting
• B – Budgeting
 Refines Process Approach: Stoner et al., 1995

• Planning The process of establishing goals and a

suitable course of action for achieving those goals – Managers
use logic and methods to think through goals and actions.
• Organizing The process of engaging two or more
people in working together in a structured way to achieve a
specific goal or a set of goals – Managers arrange and
allocate work, authority, and resources to achieve
organizational goals.
• Leading The process of directing and influencing the
task-related activities of group members or an entire
organization – Managers direct, influence, and motivate
employees to perform essential tasks.
• Controlling The process of ensuring that actual
activities are conform to planned activities – Managers make
sure an organization is moving towards organizational
objectives.

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 Strategy as Process

Deliberate Str.
Intended Realized
Strategy Strategy

Unrealized Emergent
Strategy Strategy

Source: Mintzberg 1987, p. 14

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 Why did the emergent strategy perspective develop?

Deliberate choice process Chaotic organizational proc.

Deliberate Strategy Emergent Strategy

‘PLANNING` ‘CRAFTING`

Mintzberg’s critiques of strategic planning:

•The fallacy of prediction -- the future is unknown.

•The fallacy of detachment -- impossible to divorce formulation

from implementation.

•The fallacy of formalization -- formalization inhibits flexibility,

spontaneity, intuition and learning.

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The VUCA World and Management
 The Evolution of Strategic Management (Grant, 2000)

1950s 1960s 1970s 1980s early late

1990s 1990s

THEME & Financial Corporate Corporate Positioning Quest for Strategic

ISSUES planning & planning strategy competitive innovation
control advantage &
shareholder
value

Budgeting Forecasting & Portfolio Analysis of Resource Dynamic

CONCEPTS/ project appraisal investment planning. industry & analysis. sources of
TECHNIQ- planning Synergy competition Case advantage
UES market competences Knowledge
share management
cooperation

IMPLEMENT- Emphasis on The rise of Diversifi- Industry and Restructuring Virtual orga-
ATIONS financial corporate planning cation. market select- BPR. nization.
management departments Quest for ivity. Active Refocussing Alliances
& formal global asset Outsourcing competing
planning market share management for the future

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 And what about the 2000’s and 2010’s?

The topics turned from strategic innovation to:

- Strategic renewal
- Ambidexterity
- Entrepreneurship
- Business model innovation

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VUCA World – what does it mean?

OLD NEW

STABILITY VOLATILITY

CERTAINTY UNCERTAINTY

SIMPLICITY COMPLEXITY

CLARITY AMBIGUITY

COMFORT DISCOMFORT

The world won’t slow down the pace and come back to stable conditions any more.

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 What does VUCA mean and imply?

Volatility

- Things develop faster and faster

- Plans are outdated before finished
- Developments speed up each other
- Disruptions replace fast developments
- Creative destruction happens

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 What does VUCA mean and imply?

Uncertainty

- Risk assessments become more and more complicated

- Probabilities of events can no more be calculated seriously
- Things can happen out of a sudden
- Ex post surprises become more and more likely
- Planning fallacy

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 What does VUCA mean and imply?

Complexity

- More elements, sceneries and actors

- More relationships among the actors
- More stakeholders
- Global connections
- Planning and management fallacy

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 What does VUCA mean and imply?

Ambiguity

- Performance measures change and are not always clear

- Critical success factors are not stable
- Root causes of developments are not evident
- Performance can neither be explained ex ante nor ex post
- Planning and management fallacy

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 Consequences

• Typical approaches of planning and management fail in

the new age

• For managers it is hard to say where to go (unclear

expectations) and what to manage (products, business
units, business concepts, …?)

• Need for replacement of old concepts if times get/got

rough

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Modern Business: Cornerstones – what is different?

Ambidex-
terity Sharing
Economy

Business
4.0
Value Co-
Creation
Open Age
(OI, OM, …)

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 Welcome to the world we(‘ll) live in…

BUSINESS The Business World – Value Chains or Platforms?

Business in value chains Business on (electronic) platforms

Source: Porter (1985: 36)

• One-sided markets • Two/Multi-sided markets

• Relationship logic • Marketplace logic
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Ambidexterity?

Exploration

Balance?

Exploitation

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Digital transformation and the exploration kick by 4 levers

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Exploration – elements of the new business world

“dark factories”
 Exploration – elements of the new business world

Collaborative robots: ./. 85% idle time

 Exploration – elements of the new business world

3DP & disrupting the value-adding process

 Exploration – elements of the new business world

Autonomous fleets: 12% efficiency gain

 Exploration – elements of the new business world

Smart scanning gloves: accelerating production & logistics

 Management, Leadership, Entrepreneurship

The Management Constellation

Owners (Principals)

Con-
Report
tract

Managers (Agents)

Mgm Result

Company (Object)

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 Management

• Managers act upon order

• Managers act within a given system

• Managers try to optimize within the given frame

• Managers are not independent in what they do

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 Management, Leadership, Entrepreneurship

The Leadership Constellation

Leaders (Owners or Managers)

Lead
Result
ing

People
(Employees and other stakeholders)

company

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 Leadership

• Leaders are or feel free in what they do

• Leaders lead – other people, the company as a system

• Leaders transform systems

• Leaders develop visions how the company may/should

look like in the future

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 Management, Leadership, Entrepreneurship

The Entrepreneurship Constellation

Entrepreneurs (Owners)

desig-
align-
ning
ment

company
People
(relevant to the business)

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 Entrepreneurship

• Entrepreneurs are free in what they do

• Entrepreneurs are architects and design new business

worlds

• Entrepreneurs creatively destroy – they replace the good

by the better solution

• Entrepreneurs create something new and implement the

novelty

• Entrepreneurs cause important parts of the volatility,

uncertainty, complexity and ambiguity the business world
deals with
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 Interim Conclusions

• The new business world still needs management and

managers – but less than before

• The new business world needs new concepts that go far

beyond management

• Leadership and entrepreneurship are responses to the

new context

• They need to be filled with concepts to make people and

companies act

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Overview of Management Concepts
 Managements Concepts

Management
Concepts

Managerial Entrepreneurial
Hybrid Style
Style Style

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Course Coordination
 Course Coordination

Sign up for the case studies:

- Register in groups of 4 to 5 students.
- Groups 1-4 elaborate on Dell.
- Groups 5-8 work on NBIC.
- Groups 9-12 work on SportsGear.

9 texts are available for the analysis of the 9

different management concepts. The texts will be
distributed to the groups by the lecturer.

The final case study will be distributed on the final

day.

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Let’s stay in touch!
freiling@uni-bremen.de
www.lemex.uni-bremen.de