Strategy: an overviewStrategy: an overview

Jonny Holmström

Web: jonnyholmstrom.com

Email: jonny.holmstrom@informatik.umu.se

Twitter: jonnyholmstrom

IT Management GroupIT Management Group

www.itmanagementgroup.se

OutlineOutline

Definitions

Forms of Strategy

Coherence in Strategic Direction

Information Systems Vs Information Technology

The importance of vision/mission

The organizational context for strategies: Mintzberg’s structure in fives

““Strategies are both plans for the futureStrategies are both plans for the futureand patterns from the past”and patterns from the past”

- Henry Mintzberg- Henry Mintzberg

Definition of Strategy

A strategy is a plan of action designed to achieve a vision. It derives from the Greek "στρατηγία” (strategia), "office of general, command, generalship”

(Wikipedia).

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Aspects of Strategy

Statement of ends, purposes and intent High level plan Element of leadership Positioning for the future Building capability Fit between capabilities and opportunities Pattern of behaviour resulting from embedded culture

Strategic Management

• Strategic management is the study of why some firms outperform others

• How to create a competitive advantage in the market place that is unique, valuable, and difficult to copy

• “Total organization” perspective, integrating across functional areas

• Strategies put together an understanding of the external environment with an understanding of internal strengths and weaknesses

Definition of Strategic Management

Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages (Dess, Lumpkin, & Eisner, Strategic Management: Creating Competitive Advantage, 3rd Ed., p. 9).

Attributes of Strategic Management

• Directs the organization toward overall goals and objectives

• Includes multiple stakeholders in decision making.

• Needs to incorporate short-term and long-term perspectives

• Recognizes trade-offs between efficiency and effectiveness• Efficiency describes the extent to which time or effort is well

used for the intended task or purpose; Effectiveness is the capability of producing a desired result

Mintzberg’s Views of Strategy

• Plan - consciously intended course of action

• Ploy - maneuver to outwit opponent

• Pattern - consistency in behavior

• Position - location in environment

• Perspective - way of perceiving the world

Forms of Strategy

• Formal versus informal - associated with size of firm and stage of development

• Intended versus realized - intended strategies are the plans managers develop; realized strategies are the actions that actually take place over time

Forms of Strategy

Source:H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and Emergent,” Strategic Management Journal 6 (1985), pp. 257-72.

Hierarchy of Goals

Coherence in Strategic Direction

Company vision• Massively inspiring

• Overarching

• Long-term

• Driven by and evokes passion

• Fundamental statement of the organization’s• Values

• Aspiration

• Goals

Company visionCompany vision

Hierarchy of Goals

Company visionCompany vision

Coherence in Strategic Direction

Mission statements

• Purpose of the company

• Basis of competition and competitive advantages

• More specific than vision

• Focused on the means by which the firm will compete

Mission statementsMission statements

Hierarchy of Goals

Company visionCompany vision

Mission statementsMission statements

Coherence in Strategic Direction

Strategic objectives

• Operationalize the mission statement

• Measurable, specific, appropriate, realistic, timely, challenging, resolve conflicts that arise, and yardstick for rewards and incentives

Strategic objectivesStrategic objectives

Example: Coca Cola’s Vision and Mission

• Vision: ”The Coca-Cola Company exists to benefit and refresh

everyone it touches. The basic proposition of our business is simple,

solid, and timeless. When we bring refreshment, value, joy and fun to

our stakeholders, then we successfully nurture and protect our brands,

particularly Coca-Cola. That is the key to fulfilling our ultimate

obligation to provide consistently attractive returns to the owners of

our business.”

• Mission: “Everything we do is inspired by our enduring mission:• To Refresh the World… in body, mind, and spirit.

• To Inspire Moments of Optimism… through our brands and our actions.

• To Create Value and Make a Difference… everywhere we engage.”

INFORMATION TECHNOLOGY

Hardware

Software

Databases

Networks

Other related components

are used to buildINFORMATION SYSTEMS

Payroll System

Inventory System

Marketing System

Customer Service System

IS Vs ITIS Vs IT

IT vs IS StrategyIT vs IS Strategy

Carr (2003): IT doesn’t matter– Since everybody can buy the same technology

strategic advantages cannot be found in having IT in the organization

IS matter!– Merely having IT is not enough; what matters

is what you do with it

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Mintzberg’s ‘Structure in fives’: An Mintzberg’s ‘Structure in fives’: An organisation has five main partsorganisation has five main parts

1. Strategic apex

2. Middle line

3. Support staff

4. Technostructure

5. Operating core

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Five main configurationsFive main configurations Mintzberg proposes five main configurations, or kinds of

organisations These are contexts where strategies are played out!

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Simple structureSimple structure A small shop A new agency A start-up company led by

a very dominant person

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Machine bureaucracyMachine bureaucracy A traditional airline A paper and pulp factory

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Professional bureaucracyProfessional bureaucracy University Hospital

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Divisional formDivisional form A major corporation Umeå municipality

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AdhocracyAdhocracy A project based consulting

or R&D company Some highly innovative

companies or agencies (e.g. North Kingdom)

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When analyzing strategies in When analyzing strategies in organizationsorganizations

We will meet mixed configurations Thus, in your project, in the two seminars, and in the essay

assignments: you may see cases that tend to confirm, falsify or call for elaboration of Mintzberg’s five types

When analyzing IT strategies in organizations When analyzing IT strategies in organizations (Peppard et al., 2014)(Peppard et al., 2014)