General and Strategic Management, By Dr Kevan Williams
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Transcript of General and Strategic Management, By Dr Kevan Williams
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General and Strategic Management (GSM1):
Dr Kevan Williams6 December 2005
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What happened this week?
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What happened this week?
“ITV may be forced to scrap news channel”
“…have lost about £30m since it was launched in August 2000.”
“In October its share of the total television audience was just 0.1% compared with 0.5% each for the other two broadcasters.”
“The channel has been a serious drain on the main ITV network.”
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Today
Recent developments in strategy
…towards the end of the course
Beginning of the course review
Thoughts on the exam
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Recent Developments
Leadership
Governance
Managing change
Technology
International
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Leadership
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Leadership
The growing emphasis on leadership including the cult of ‘celebrity’ in leadership?
“Management is doing things right; leadership is doing the right things.”
Peter Drucker
“Leadership is practiced not so much in words as
in attitude and in actions.” Harold Geneen, Chairman, ITT Corp
See leadership in earlier lectures (and in GSM2)
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Leadership
"It's not going bust and it doesn't have outrageous debts but it's in a cycle of decline and it's hard to see where that's going to stop,"
Marks & Spencer in 2004Good example of different leadership styles
- See previous articles / studies
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Leadership Mistakes
The chief executive of Barclays Bank has done a Gerald Ratner. He went before a select committee of MPs and - in front of a battery of TV cameras and newspaper reporters - admitted that he doesn't own a credit card because it's too expensive.
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Governance
“The chairman will get his way BSkyB shareholders are unlikely to prevent James Murdoch's appointment”
“Slow progress expected to end white, male dominance”
“NYSE plans independent board GRASSO RESIGNATION”
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Managing Change
“BMW’s Coup: It Outsourced a Whole New Car”
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Technology
“Research offers cancer drug hope”
“US scientists plan to create new life form”
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International – a multidimensional issue
A global shift in power Easier to trade globally – technology driven Threat and opportunity “Italian lingerie maker [SG3]dodges China threat”
http://news.bbc.co.uk/1/hi/business/4469724.stm Journal of International Business Studies – going since
1970! – some people now waking up! The Great Reverse – Part III
Burgeoning Sino-Indian trade ties may significantly alter the world economic balance
Anna Greenspan YaleGlobal, 8 September 2004
Other issues…?
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International - Tesco
“Sales across the group jumped 13.9% during the 14 weeks to 19 November, led by a 23.3% surge in international sales. UK sales grew by 11.6%.”
“Analysts say it plans to increase its global presence to offset a lack of growth opportunities in the UK.”
“In the past four weeks, the firm has opened 25 stores in eight countries, including its first store in Guangzhou, southern China.”
“Tesco said it was on track to open 150 stores abroad in the second half of the year.”
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Review: What is Strategy About?
Different schools and expert opinions (Porter, Hamel, Mintzberg etc)
Different ways in which strategy gets created and implemented (Design, experience, ideas)
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Strategy Development
- Strategy as Design- Strategy as Experience
- Strategy as Ideas
ThreeViewpointsor ‘Lenses’
- Strategic Planning- Strategic Leadership
- Organisational Politics- Logical Incrementalism
- The Learning Organisation- Imposed Strategy
Six ways in which strategy can be developed in practice
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Current Mission,Vision, Strategy,
Objectives
Current Mission,Vision, Strategy,
Objectives
Desired Future Mission, Vision,
Strategy, Objectives
Desired Future Mission, Vision,
Strategy, Objectives
OrganisationalCompetencies,Strengths andWeaknesses
OrganisationalCompetencies,Strengths andWeaknesses
External, EconomicIndustry and
MarketEnvironments
External, EconomicIndustry and
MarketEnvironments
Strategic PlansAction Programmes
Strategic PlansAction Programmes
I. Strategy Development
II. Strategy Implementation
Organization& Systems
Organization& Systems PeoplePeople ResourcesResources
Strategic Management:
the Design Viewpoint
Stakeholder Needs
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Some Tools and Techniques of
the Design Viewpoint
MOST: Analysis- Mission- Objectives- Strategies- Tactics
Organisational purpose
SituationAnalysis
SWOT: Analysis-Strengths-Weaknesses-Opportunities-Threats
PEST: Analysis- Political- Economic- Social- Technological
Industry Analysis:-5 Forces- Strategic groups
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What are the Most Common Causes of Strategic Failure?
Bad luck Inward perspective Failure to generate a coherent strategy Poor top management Poor corporate governance Complacency Short term focus Poor timing Examples?
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Most Widely Used Management Tools
What are they?
When should they be used?
When should they not be used?
How should they be used properly?
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Usage of Management Tools
http://www.bain.com/management_tools/
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Most Popular Management Tools
http://www.bain.com/management_tools/
525254
5759
626264
6970
7576767878787879
8484
89
0 20 40 60 80 100
Economic Value Added Analysis
Business Process Reengineering
Downsizing
Knowledge Management
Strategic Alliances
Core Competencies
Growth Strategies
Customer Relationship Management
Outsourcing
Mission and Vision Statements
Strategic Planning
% Use
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When to Use the Tools?
Corporate Strategy - Developing Strategy for the Whole Organisation•Value chain integration•Portfolio analysis (BCG, Directional Policy Matrix)•Directional policy matrix•Mergers and acquisitions•Corporate parenting styles•Core competencies (corporate)
Business Strategy – Developing Strategy for a Strategic Business Unit•Single value chain analysis•Resource analysis •Porter 5 forces•PEST analysis•SWOT analysis•Generic business strategy analysis (strategy clock)Core competencies (business)
Functional/Operations Strategy – Developing Strategy for a Function•e.g. Supply chain strategy
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Questions to ask When Using Strategy Tools?
Is the tool intended to be used at the level of strategy at which I am operating?
Some tools can be used at different levels, in different ways. Am I using such a tool in the right way?
If multiple tools are available for the same situation, which one is the right one for the job?
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What Does it Take to be aGood Strategist?
Mindset
Competencies
Training
Experience
Knowledge
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GSM1...the early days
What is strategy?
“The direction and scope of an organisation over the long term, which achieves advantage for the organisation through its configuration of resources within a changing environment and to fulfil stakeholder expectations”
Fit or Stretch (leverage)?
Language of strategy
Levels of strategy
Environmental uncertainty (forecasting / scenarios
Elements of Strategic Management
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GSM1...understanding strategy development
Strategy development – seen, understood, implications
Three strategy lenses – design, experience, ideas
Strategy development process in organisations
Implications for Strategy Development
Some types of strategy
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GSM1...The Environment
PESTELSWOTForecasting and ScenariosIndustry AnalysisPorters 5-forcesLife cycleCompetitive AdvantageStrategic Groups
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GSM1...Strategic Capability
Roots of strategic capability Types of resources Nature of competencies, core competencies,
distinctive capabilities [Kay], dynamic capabilities [Teece et al, Eisenhardt & Martin] and critical success factors (CSF’s)
Competitive advantage and capabilities Framework for analysis: VRIO [Barney 1997]-
resources and capabilities should beo Valuable o Rareo Inimitableo Organization can effectively exploit them
[www.ecofine.com/strategy/RBV%20of%20the%20firm.htm]
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GSM1...Strategic Capability…continued
… Experience curve effects Value chain analysis Benchmarking and Knowledge
management Resource-based approach to
strategy-development
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GSM1...Expectations and Purposes
Organisational expectations and purpose Importance of corporate governance Stakeholders and stakeholder mapping Ethical issues and their impact on
strategy Meaning and importance of legitimacy Culture and its impact on strategy Communicating organisational purpose
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GSM1...at the Corporate Level
Nature of strategic choices – Corporate, Business or Competitive, Directions and Methods of Development
Corporate level strategy and multi-business organisations
Creating value through corporate strategy Different styles of corporate ‘parenting’ –
portfolio, restructurer, synergy manager, parental developer
Frameworks for portfolio analysis of corporate strategy – balance, attractive, fit
Diversification strategies The corporate portfolio and the nature of
corporate control
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GSM1...and at the Business Level
Strategic Business Units (SBUs) and business unit strategy
Competitive advantage Different ways of achieving competitive
advantage – the strategy clock The meaning and importance of differentiation
strategies – cost leadership, differentiation, focus
Relation of differentiation strategies to core competencies
Sustainability of competitive advantage Cooperation versus competition Principles of game theory Fast-paced environments: hypercompetition
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GSM1...finally Directions and Methods of Development
Identify development directions (new / existing, markets, products) open to an organisation – available, preferred, succeed better
Compare three methods of development (internal, acquisitions, alliances)
Understand the different forms of strategic alliance and the conditions for successful alliances
Strategic evaluation: what makes a good strategy?
Understand suitability, acceptability and feasibility
Selecting strategies for implementation
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Readings for Exam Preparation
Read…review…and read again chapters 1 – 8 of Johnson and Scholes textbook
Work through case studies in Johnson & Scholes Review of slides and lecture notes Read in Management journals – follow-on from the Authors given
in the lecture notes Consider other people’s points of view Newspapers/Journals – e.g. Financial Times, Economist, Business
Week Visit the Website of Bain and Co to review the management tools
(http://www.bain.com/management_tools/) Visit the Website that goes with the textbook by Johnson and
Scholes Look for real world examples – you must have a few in mind
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…final thoughts
“Perception is strong and sight weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things.”
Miyamoto Musashi
I don't want any yes-men around me. I want everybody to tell me the truth even if it costs them their jobs.
Samuel GoldwynUS (Polish-born) movie producer (1882 - 1974)