1. ORGANIZATIONAL STRATEGY, Apuntes de Administración de Empresas

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CHAPTER 1

ORGANIZATIONAL STRATEGY

STRATEGIC MANAGEMENT

UAB

Index 1.1. The concept of strategy 1.2. Contents of strategy 1.3. Different levels of strategy and strategic decision 1.4. Strategic business Unit 1.5. The process of Strategic Management 1.5.1. Phases of the strategic management process 1.5.2. Responsibility for strategic decisions 1.5.3. Rationality in the decision-making process 1.5.4. Fit and change in the strategic management process. 1.6. Approaches in strategic thinking

Where do we find a company’s strategies?

Heads of

managers

Speeches and

written

documents

Decisions

through which

strategy is

enacted

Corporate pages of companies’ websites, top management presentations, and company’s anual reports can be pretty useful!

1.1. The concept of strategy

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

(Chandler, 1962 )

1.2. Contents of strategy FIT FIRM-ENVIRONMENT FIRM COMPETITIVENESS MEET STAKEHOLDERS NEEDS LONG-TERM MANAGEMENT CREATION OF NEW BUSINESS OPPORTUNITIES DEFINITION OF THE SCOPE OF THE FIRM CONTENT OF STRATEGIC DECISIONS

1.2. Contents of strategy

CHARACTERISTICS

OF STRATEGIC

DECISIONS

Complex nature High uncertainty Affect all the decisions of the company Not easily reversible Holistic approach Important Tend to require changes in the organization

1.3. Different levels of strategy and strategic decisions

CORPORATE STRATEGY

COMPETITIVE (OR BUSINESS) STRATEGY FUNCTIONAL STRATEGIES Depending on the hierarchical level Where to compete? How to compete? How to use and apply resources and capabilities within each functional area

1.3. Different levels of strategy and strategic decisions

CORPORATE

STRATEGY

COMPETITIVE

STRATEGY

FUNCTIONAL

STRATEGIES

Need for interaction, coordination and coherence between levels

1.5. The process of Strategic Management 1.5.1. Phases of the strategic management process

1.5. The process of Strategic Management ❖ Who is responsible for the adoption of strategic decisions? Main responsibility  top management  specific duties (guide the process, obtain resources...) 1.5.2. Responsibility for strategic decisions

1.5. The process of Strategic Management 1.5.3. Rationality in the decision-making process ▪The rational process presented is, in reality, an “ideal process”. ▪ Basic assumptions: ✓Intentional process ✓Objectives are clear and can be quantified ✓Extensive information search ✓Strategies evaluation according to objective techniques ✓The process offers the “ best” strategy following objective criteria

1.5. The process of Strategic Management 1.5.3. Rationality in the decision-making process Despite the potential benefits of a rational process, in practice

the rational aspects are combined with other not so rational 

The rational process takes place under conditions of uncertainty, complexity and conflict

1.5. The process of Strategic Management 1.5.4. Fit and change in the strategic management process Internal External Strategic objectives

CONTEXT

STRATEGY ORGANISATION

STRATEGIC FIT ORGANISATIONAL FIT In a changing context, the process is dynamic and continuous. Strategic and organisational changes are required

1.6. Approaches in strategic thinking

▪The proliferation of Strategic Management studies ( 60 ’s, past

century) originated various schools of thought, that can be

grouped into three approaches:

1) Rational approach

2) Organisational approach

3) Holistic approach