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BUS 8421

Strategic Management Principles

Class 1, 16th Apr 2019

Strategy Management Principles


Course Introduction
- Dr. Zehra Canan Araci
Spring 2019

1
Instructor

Dr. Zehra Canan Araci

Education

BSc Industrial Engineering Dumlupinar University, Turkey

MSc Industrial Engineering and Operations Mng University of Nottingham, UK

PhD Lean Product and Process Development Cranfield University, UK

Experience

Nine years of academic and industrial experience in quality management at


prestigious companies such as Rolls-Royce Plc, Airbus, IKEA suppliers, Caltec,
Arcelik, Al-Zahra Hospital Dubai.

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Course Introduction

Code: BUS 8421 Credits: 3

Tuesdays:
Dates: Location: Villa 5 FF
4.00pm to 8.30 pm

Cohort: LOD Winter 19

Name: Dr. Zehra Canan Araci Email: z.araci@adsm.ac.ae

Office Office
Villa 5, Room 5206 Tuesdays 2-4 PM
Location: hours:

3
Course Description

• This course provides students with a holistic view and understanding of how different
types of organizations manage the dynamics of strategy and policy formulation,
implementation, and evaluation in order to respond to changes in both internal and
external environmental dynamics and develop sustainable competitive advantage.
The course considers the strategic choice options for managers, and looks at the
concepts of complexity and complex adaptive systems within the lens of organizational
dynamics.

• Strategy is an integrative discipline. Analysis requires students to look at the


company as a whole rather than in terms of its isolated functions; and in terms of the
company‘s place in the wider context of industry and environment rather than as
an isolated entity.

4
Course Learning Outcomes

• Critically evaluate the concepts, theories and models used in strategic


management.
• Appraise the diverse approaches and contextual factors that may
influence the strategic management and organizational
transformation process/outcomes.
• Critically appraise a variety of levels of strategy: Corporate, business
and operational.
• Evaluate a wide range of strategic approaches past and present.
• Synthesize and comment critically on the strategic position of the
organization.

5
Core Textbook

Available in the ADSM library


6
Course Assessments
and Evaluation
Assessment Tasks Weight CLOs

In-class Individual Activities 40% 1,3

Out of Class Individual report 30% 2,4

In-class Group Project 30% 5


Total 100%

Assessment Task 1 In-class activities (Two activities)


Type of Assessment Individual
Weight 40% = 20% + 20%
Submission Deadline Week 3 (30th Apr) and Week 6 (25th June)
After the introduction to strategy, PESTEL framework and strategic capabilities,
and based on additional material that will be shared with students during
classes, students will:
Description of Task
1.Explain required steps when a business decides on a strategy.

2.Evaluate interaction between business model and innovation.

7
Course Assessments
and Evaluation
Assessment Task 2 Case Study
Type of Assessment Out-of-Class Individual Report
Weight 30%
Submission Deadline 16th July 2019 by 23:59 (Turn-it-in submission through LMS)
Student will be given a hypothetical case which presents strategic options that a
Description of Task business should consider. Student will critically decide which option(s) can be
implemented with related changes to its position (1,500 words).

Assessment Task 3 Corporate Strategy in the UAE


Type of Assessment In-Class Group Presentation
Weight 30%
Submission Deadline Week 9 (16th July) and Week 10 (23rd July)
Students will form groups by the end of the second week. Each group must not
exceed four students. The group will select two companies from the same industry
in the UAE. The group will assess similarities, and differences when analyzing their
Description of Task past and present strategic approaches, and critically analyze factors that influenced
transformation in process/outcomes. The group will present work in-class according
to pre-agreed schedule. Every MEMBER of the group must present their work at
least two minutes at the time of the presentation.

8
Teaching Schedule
Readings/ Class Activities during
Session Topics
lecture period
 Course Review
16th Apr
Chapter 1
Week 1  Introducing strategy

 The PESTEL framework


23rd Apr
Chapter 2
Week 2  Scenario Analysis

 Five Forces Framework


 Critical Success Factors Chapters 3 and 4
30th Apr
Week 3  Strategic Capabilities Case Study:
Alibaba – The Yangtze River Crocodile
In-class Assessment 1: What is Strategy?

Ramadan Break

9
Teaching Schedule
 Stakeholders and Governance
Chapter 5
11th
June
 Corporate Governance Case Study: India’s United Breweries Holdings Ltd.
Week 4
Case Study: Carlos Ghosn: The Nissan Case Scandal
 Social Responsibility and Ethics

18th June Chapter 7


 Business Strategy and Models
Week 5 Case Study: The Ikea Approach

 Corporate Strategy and Diversification


Chapter 8
Case Study: Richard Branson and the Virgin Brand
25th
June  Entrepreneurship and Innovation
Chapter 10
Week 6
In-class Assessment 2: Linkage between Strategy and Case Study: Rovio Entertainment: Going Back to the
Entrepreneurial Roots
Innovation

 Organizational Performance
2nd July Chapter 12
Week 7 Case Study: ITV: DIY, Buy or Ally
 Acceptability and Feasibility

9th July
 The Practice of Strategy Chapter 16
Week 8

Group In-Class Presentations


16th July
Week 9
Individual Report Due: 16th July 2019 by 23:59 hr.

23rd July
Group In-Class Presentations
Week 10

10
11
Very Important Three Questions

• What?

• Why?

• How?

12
BUS 8421
Strategic Management Principles

Class 1, 16th Apr 2019

Ch 1. Introducing Strategy

- Dr. Zehra Canan Araci

13
Definitions of strategy (1/2)

 ‘..the determination of the long-run goals and objectives


of an enterprise and the adoption of courses of action
and the allocation of resource necessary for carrying out
these goals’
Alfred D. Chandler

 ‘Competitive strategy is about being different. It means


deliberately choosing a different set of activities to deliver
a unique mix of value’
Michael Porter

Sources: A.D. Chandler, Strategy and Structure: Chapters in the History of American Enterprise, MIT Press, 1963, p. 13 M.E. Porter, What is strategy?, Harvard Business Review,
1996, November–December, p. 60

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Definitions of strategy (2/2)

 ‘..a pattern in a stream of decisions’


Henry Mintzberg

 ‘..the long-term direction of an organisation’


Exploring Strategy

Sources: H. Mintzberg, Tracking Strategy: Towards a General Theory, Oxford University Press, 2007, p. 3

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Strategic decisions

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Three horizons for strategy (1/2)

 Horizon 1:
Extend and defend core business

 Horizon 2:
Build emerging businesses

 Horizon 3:
Create viable options Tesla Car
(p. 5)

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Three horizons for strategy (2/2)

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Strategy statements
 Strategy statements should have three main themes:

►the fundamental goals (mission; vision; objectives) that the


organisation seeks, which reflect the stated mission, vision
and objectives;
►the scope or domain of the organisation’s activities
(customers /clients, geographical location & extent of internal
activities);
►and the particular advantages or capabilities it has to deliver
all of these.
Samsung
Electronics (p. 9)

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Stakeholders

 Stakeholders are those individuals or groups


that depend on an organisation to fulfil their
own goals and on whom, in turn, the
organisation depends.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Levels of strategy (1/2)

Vice Media diversifying from the


Corporate- original magazine into other
activities including retail,
level publishing and video (determining
strategy the level of businesses to include
and NOT to include “tesla”)

Marketing and content


Business-level/competitive improvements in the Vice
magazine to attract more
strategy readers. (How units will provide
best-value services)

Vice’s operational strategies


are geared to meeting its
Operational/ Functions strategy investment needs and raising
finance (Resources, processes
and people)

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Levels of strategy (2/2)
 Corporate-level strategy is concerned with the overall
scope of an organisation and how value is added to the
constituent business units.

 Business-level strategy is concerned with the way a


business seeks to compete successfully in its particular
market.

 Operational strategy is concerned with how different


parts of the organisation deliver the strategy in terms
of managing resources, processes and people.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
The Exploring Strategy Framework

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Strategic Position

 The strategic position is concerned with the


impact on strategy of the external environment,
the firm’s strategic capability (resources and
competences), the organisation’s goals and the
firm’s culture.

 Fundamental questions for Strategic Position:


►What are the environmental opportunities and threats?
►What are the firm’s strengths and weaknesses?
►What is the basic purpose of the firm?
►How does culture fit with the strategy?

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Strategic Choices
 Strategic choices involve the options for strategy in
terms of both the directions in which strategy might
move and the methods by which strategy might be
pursued.

 Fundamental questions for Strategic choice:


►How should individual business units compete?
►Which businesses to include in the portfolio?
►Where should the organisation compete internationally?
►Is the organisation innovating appropriately?
►Should the organisation buy other companies, form alliances
or go it alone?
Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Strategy in Action
 Strategy in action is about how strategies are formed
and how they are implemented.
 The emphasis is on the practicalities of managing.

 Fundamental questions for Strategy in action:


►Which strategies are suitable, acceptable and feasible?
►What kind of strategy-making processes are needed?
►What are the required organisation structures and systems?
►How should the organisation manage the change needed?
►Who should do what in the strategy process?
• Which people and what activities.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
The strategy checklist
Strategic position Strategic choices Strategy in action
• What are the environmental • How should business units • Are strategies suitable,

opportunities and threats? compete? acceptable and feasible?

• What are the organisation’s • Which businesses to include • What kind of strategy-
strengths and weaknesses? in a portfolio? making process is needed?

• What is the basic purpose of • Where should the • What are the required
the organisation? organisation compete organisation structures and

• How does culture fit the internationally? systems?

strategy? • Is the organisation • How should the organisation


innovating appropriately? manage necessary changes?

• Should the organisation buy • Who should do what in the


other companies, ally or go it strategy process?
alone?

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Working with strategy (1/2)

 Top managers frequently formulate and control


strategy but may also involve others in the process.

 Middle and lower level managers have to meet


strategic objectives and deal with constraints.

 All managers have to communicate strategy to their


teams.
 All managers can contribute to the formation of
strategy through ideas and feedback.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Working with strategy (2/2)
Organisations may also use strategy specialists:

 Many large organisations have in-house strategic


planning or analyst roles.
 Strategy consultants can be engaged from
management consulting firms
►Accenture, IBM Consulting, PwC, GLG.
 There are a growing number of specialist strategy
consulting firms.
►McKinsey & Co, The Boston Consulting Group.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Strategy’s three branches (1/2)

 CONTEXT – internal and external

 CONTENT – strategic options

 PROCESS – formation and implementation

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Strategy’s three branches (2/2)

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Exploring strategy in different contexts

 Small businesses (e.g. strategic purpose, growth issues


and retaining independence)

 Multinational corporations (e.g. geographical scope;


cultural issues and structure/control issues)

 Public sector organisations (e.g. service/quality and


managing change issues)

 Non profit organisations (e.g. purpose and funding


issues)

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
The strategy lenses (1/5)
 The strategy lenses are ways of looking at strategy
issues differently in order to generate additional
(=exploring) insights.

 Looking at problems in different ways will raise new


issues and new solutions.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
The strategy lenses (2/5)

 Strategy As Design:
►Strategy ‘emerges’ from an uncertain and changing
environment.
►Strategy comes from a variety of initiatives.
►New ideas ‘bubble up’ from unpredictable sources and not
just the top.
►Organisations need to encourage diversity and look for
initiatives at the bottom or the periphery of the organisation.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
The strategy lenses (3/5)

 Strategy As Experience:
►Strategic development should be adaptive, and divides it into
intended, realised and emergent strategies.
►Strategic development should be adaptive, and divides it into
intended, realised and emergent strategies.
►Strategic development is the continuous adaptation of past
strategies based on experience.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
The strategy lenses (4/5)

 Strategy As Idea (or Variety)


►This approach to strategy emphasis innovation and the need
for diversity of ideas in the organisations.
►Strategy ‘emerges’ from an uncertain and changing
environment.
►Strategy comes from a variety of initiatives.
►New ideas ‘bubble up’ from unpredictable sources and not
just the top.
►Organisations need to encourage diversity and look for
initiatives at the bottom or the periphery of the organisation.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
The strategy lenses (5/5)

 Strategy As Discourse
►This view consists in making choices between different
possibilities and then inspiring confidence for the choice
taken.
►This view is very high on legitimacy and low on rationality and
innovation.
►Attention is focused on the way managers use language to
frame strategic problems, make strategy proposals, debate
issues and communicate strategic decisions.
►The way managers ‘talk’ about strategy matters – it
influences decisions.
►The discourse lens helps to uncover the personal interests
and ‘politicking’ of managers.
Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Chapter Summary (1/3)
 Strategy is the long-term direction of an organisation.
 A strategy statement should cover the goals of an
organisation, the scope of the organisation’s activities
and the advantages or capabilities the organisation
brings to these goals and activities.

 Corporate-level strategy is concerned with an


organisation’s overall scope; business-level strategy is
concerned with how to compete; and operational
strategy is concerned with how corporate- and
business-level strategies are actually delivered.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Chapter Summary (2/3)
 The Exploring Strategy Model has three major
elements:
►understanding the strategic position,
►making strategic choices for the future and
►managing strategy in action.

 Strategy work is done by managers throughout an


organisation, as well as specialist strategic planners
and strategy consultants.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE
Chapter Summary (3/3)
 Research on strategy context, content and process
shows how the analytical perspectives of economics,
sociology and psychology can all provide practical
insights for approaching strategy issues.
 Although the fundamentals of strategy may be similar,
strategy varies by organisational context, for example
small business, multinational or public sector.
 Strategic issues are best seen from a variety of
perspectives, as exemplified by the four strategy lenses
of design, experience, idea (or variety) and discourse.

Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy Powerpoints on the Web, 10th edition ©Pearson Education Limited 2014
Abu Dhabi School of Management, UAE