Managing Strategy

1) Portfolio analyzing case studies. 3 portfolios mandatory each 1000 words. It carries 30% weight and 40% is pass mark. 2) Simulation report- business studies games. report is 2000 words and its 20% weight pass mark is 40% 3) Examination is 50% of 3 hours.

Outline

Definition managing strategy Strategy lenses Level of strategy Element of strategy

Notes 1) Time:- long term decisions of 5years plus 2) Environment:- talking about external envir -technological, economical, social, econological, legal & political 3) Decision makers? Senior Managers -planned 4) Complexities- multi national levels -manage these complexities Strategic questions 1) Where are we? - market share 40% -production for products -employees 120 ppl/workers 2) What is taking place now? -economic crises -high rate of inflation -national disaster etc

3) Look at the alternatives solutions -cut down employees or and cost of products to increase sales -introduce new products etc 4) Decision (make decision) in terms of resources, decision should be out in action and or implemented 5) Evaluate + control

Definition of strategy the determination of the basic long-term goals of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. Alfred D. Chandler, 1962 This means that the strategy needs to be determined in long terms goals should be pin pointed out and stated, they can be adopted of the course of action (implement and taken action like go ahead thing and it shows a profitable path). And also allocate the resources as in if they adequate or not.

This is a classical or a systematic approach to strategy. (Classical definition means general or formal def) Henry Mintzberg criticized the Alfred Chandlers definition of strategy. Decisions could be from bottom to up process, planned yes but not realized at the end of the day. Sometimes strategies emerge with a different plan depending on the situations. Therefore, strategy could be deliberate/ planned/ emergent. As a consequence, strategy development & implementation will more likely occur simultaneously rather than sequentially.

In 1987, Henry Mintzberg came up with 5 Ps: 1. Strategy as plan -advance, deliberate, developed purposefully with intentions. I.e. consciously intended course of action, a guideline to deal with a situation. 2. Strategy as a Ploy (trick) -A manoeuvre intended to outwit competitors 3. Strategy as a pattern -strategy is consistency with behaviour whether planned/ not planned. 4. Strategy as position -location an organisation in its environment 5. Strategy as perspective -an ingrained way of perceiving the world

The strategy lenses The strategy lenses are four different ways of looking at issues of strategy development for an organisation. Strategy as Design Strategy as Experience Strategy as Ideas Strategy as Discourse

Levels of strategy 1. Corporate-Level Strategies is concerned with the overall purpose and scope of an organisation and how value will be added to the different parts (business units) of the organisation 2. Business-Level Strategies is about how to compete successfully in particular markets...A Strategic Business Unit (SBU) is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU 3. Operational Strategies are concerned with how the component parts of an organisation deliver effectively the corporate and business-level strategies in terms of resources, processes and people Johnson et al, pp. 7

The Three Elements of Strategy Strategic Position Is concerned with the impact on strategy of the external environment, an organisation's strategic capability (resources & competences) and the expectations and influence of stakeholders Strategic Choices Involve understanding the underlying bases for future strategy at both the business unit (SBU) and corporate levels and the options for developing strategy in terms of both the directions and methods of development.

Strategy into Action Is concerned with ensuring that the strategies are working in practice. Johnson et al, pp. 13-16

Managing strategy Session 2 purpose, expectation, & ethics Definition of corporate purpose Methods of communicating corporate purpose Corporate governance & business ethics

Why do organizations exist?.............................................. Share holders maximize their share capital (dividend) + increase on their share price to maximize their returns. Classical Theories The Neo-classical theory of the firm assumes business organisations exist to maximise their returns for their owners, e.g. Shareholders. This is usually interpreted to mean short-term profit maximisation. Accordingly, profit maximisers are by definition cost minimisers. These assumptions have been challenged from within economics & from other academic disciplines. (organizations may make profit but shareholders may not get their wealth maximized this maybe because either the value of share price is gone down due to increase in number of shares in the org e.g. from 50000 shares to 100000 or number of shareholders goes up therefore if 4 shareholders were sharing from 2M now 8 shareholders will share from 2M and this shows wealth not increased.)

Stakeholders theory They exist because of:- customers, employees, government, supplies

Stakeholder Theories It was observed a long time ago (Berle & Mean,1936) that the rise of the joint stock company, and the consequential professionalization of management, created the opportunity for a division of ownership & control to emerge. This division of ownership & control created the possibility that business organisations may seek to fulfil a wider & more complex purpose. This critique has encouraged the development of alternative theories of the firm, including the Stakeholder Model, which is also applicable to the not-for-profit sector.

Definition those individuals or groups who depend on the organisation to fulfil their own goals and on whom the organisation depends. Johnson et al, pp.132 Types of Stakeholders Internal Stakeholders Including owners, managers & employees External Stakeholders Including customers, suppliers, shareholders, financial institutions (eg banks), trade unions, pressure groups, the media, national & local government, etc.

A stakeholder analysis Helps define an organisations purpose; and Helps identify the extent to which strategic initiatives will meet opposition &/or support from interested parties & why. Stakeholder Mapping Stakeholder mapping identifies stakeholder expectations and power and helps in understanding political priorities. Johnson et al, pp. 156

Stakeholder Mapping
Sources of Power

1. Position Power, refers to the power people/groups derive from their formal position within an organisation, eg senior management. 2. Resource Power, refers to the power that people/groups derive from their access/control of resources, eg banks. 3. Personal Power, refers to the ability of some individuals to exert influence through the strength of their personality, eg charismatic leaders like Richard Branson or Nelson Mandela. 4. Expert Power, refers to the power derived from expertise, eg IT specialists.

Charles Handy,1993

Session3 measuring performance and evaluation strategy 1) 2) 3) 4) How strategies are evaluated Definitions of the 3 Es Financial performance measures Balance scorecard

Notes Analysis of stakeholders identifying what they want, how to achieve orgs objectives and also making our stakeholders satisfied through strategic. * what to be done *we made a choice then implementation follows. Evaluate and measure the performance