SESSION - 1

Introduction to Business Policy and Strategic Management

Is strategy the most important driver of superior performance?

STRATEGY SHOW: MIND TREE

How Mind tree founders decided what the firm
would be doing, before its start?
Whether strategy follows expertise or strategy
follows imagination with intention: discuss
How did the Mind tree imagine the right way?
Why some hypotheses made by a firm lead to
poor performance?
Why the growth withered from 2008 onwards
even when the leaders and strategy were same?
What is superior performance for Mind tree?

WHAT IS STRATEGY?
A multidimensional concept
The central concept on which
or around it an action for
winning is designed
Early use in hunting and
warfare
In business organization
context, theory evolved after
1950s
Business arena equated with a
battlefield
Different definitions

Winning formula
Core decision
Business aspiration
An idea set for
getting what you
want
- Course chart
- A grand hypothesis
- A thread in all
salient decisions

a winning idea set to reach the future beneficial state of a firm

STRATEGIC MANAGEMENT (SM)

A broad concept that embraces the entire set of salient

decisions and actions that determine the long run
performance of an organization (Koteen 1989)

Planning, resource management, control, and evaluation for

superior long run performance

EVOLUTION OF THE DISCIPLINE OF SM

Pre history: Taylor,
Bernard, Simon,
Bower

Financial planning
phase: New man,
Paul Lawrence,
Drucker, Selznik

Forecast based
planning phase:
Chandler, Ansof,
Andrews

Profession of
strategic
management:
Rumelt, Wringler,
Mintzberg

Growth of the
discipline (1980s):
Porter, Tom Peters

Resource based view

(1990s): Barney,
Teece, Prahlad

Practice school
(2000s):
Jarzabkowski,
Govindarajan, Drejor

Human imagination
(2010s): 6i model
Table: 1.3; Fig: 1.4

Emerging paradigms
of strategy (Table 1.1)

BATTLE FIELD STRATEGY

Focus on offence
or defense
Winning
territory with
least cost

Creating
perception of
strength

Covering
weaknesses

Collect
intelligence on
enemy

First mover
advantage

Leveraging
strengths

SM PROCESSES

Traditionally a 3 step process:

Strategy formulation after appraisal
Implementation with a plan
Monitoring & evaluation
Means-ends relationship (Fig 1.7)

Constant environmental scanning

STRATEGY FOR SELF

First: Introspect on what you want. Your wants take you to the vision
Second: Identify who you are & who you want to be. Who you are &
want to be clarifies mission
Third: Imagine how you can meet your wants that are in harmony with
your mission
Fourth: Make the list of options that come up [ process of investigationintrospection- insights- imagination. ]
Fifth: Assess your strengths, weakness, contextual constraints &
opportunities
Sixth: Make strategic choice of the path, based on the insights from the
personal SWOT
Seventh: Write down the story in which you would be describing what
you would do, would not do, where you do, with whom, how you would
proceed.
Eighth: Enact the script/ story & be in charge of the story as its hero.
Ninth: Retreat often for a week to inspect & evaluate how it goes.
Tenth: Fill the gaps & enhance the story by inter-positioning.

STRATEGY IN ORGANIZATIONS
Define what is superior performance
Decide the inputs required
Craft unique configuration of resources
Develop processes, systems, policies
Superior
performance

How ?

STRATEGY

Way of sourcing resources

Manner of using resources
Timing, staging, phasing, milestones
Designing metrics for measuring
Programs, budgets, dashboard

CONCEPTUAL FRAMEWORK (6-i)

The 6
phases of
Starts with
Imaginatio
strategic
investigati
Gain
Implementat
Interpositi
n with
Inspection
Manageme
oninsights
ion-execute
on for
intentionto check
nt are
introspecti about the
with
course
crafting
the course
continuous
on (Table realities
decisions
correction
strategy
and
1.2)
overlappin
g

ROLE OF A STRATEGIST

Greek word: Strategos

= the art of the general
General is in charge of the whole:
Preparing
Equipping
Organizing
Assessing
Planning
Executing
Artistry = mastery + originality in choices, decisions and
actions

THEORIES USED IN SM

Theory is an
explanation of the
why

More than 25
important theories

Theories
Theories in
organizations

Guides learning
Lights the way
Train judgments
Avoid pitfals

Theories of
organizations

Ex: Resource based

Theory, Agency
theory, Institutional
theory

DIMENSIONS OF STRATEGY
A plan, pattern, ploy, practice, process
A unique position, perspective, programming
Strategy as fit, shaping
As sustainable competitive advantage
Shared mental representations pursuing cognitively
distant opportunities
As choice to do or not to do
As stretch hypothesis to be validated
Product market scope

OBJECTIVES OF STRATEGY

Envisioning about the future state of the organization

Deliver superior value by developing an offering of
utility with low imitability
Break economic equilibrium law and generate
surpluses to fuel growth
Achieve superior performance, consistently and
durably
Harmony, direction and coherence to all decisions
Utilize all resources-orchestrating resources
Realize vision with equity, efficiency
In-built flexibility for adaptation
Satisfy interests of stakeholders
Become a legitimate, reputed institution

TYPES OF GROWTH & ITS CHALLENGES

Growth as
expansion
(Fig 1.2)
Growth as
identity (Fig
1.3)
Growth as
increase in
net worth
Growth as
leadership

Challenges

Space to
grow (Fig
1.1)

Resources &
cost

Avoiding
threats

Cooperation
from
stakeholder

Enhancing
status

BASIC MODEL OF SM

Three issue clusters (Fig 1.4)

Input issues
Opportunity & Threats
Process issues
Efficiency & Quality
Output issues
Effectiveness & Sustainability
Basic model compartmentalizes
In practice, the phases and focus are continuous and adaptive

STRATEGY ENGAGEMENT GRID

Strategic Management engages: (Fig 1.7)

The firm with the society

The strategy with the environment
The structure with the strategy
The suppliers with the strategy
The customers with products
The products with the strategy
The owners/managers with strategy
The Apex structure with lower units
The objectives with mission
The present with the future (vision)
drjacobt@gmail.com

RELATIONSHIP BETWEEN STRATEGY

FORMULATION & IMPLEMENTATION

Strategy
provides
direction
and path
(Fig 1.6)

Mission
Present
Path is the
provides
state to
Major
action plan
the
future
milestones
to reach
patternthrough as objectives
each
consistenc
milestones
milestone
y

Programs
& budgets Generates
superior
are steps performance
within the
through
action
tactics
plan

TOOLS AND TECHNIQUES IN SM

Analysis
Facilitation
Guide
Problem framing
Measurement
Planning
Execution
Catalyst
Decision making
Communication
Collaboration
[Reliability, Validity, accuracy,
adaptability]

PESTELD, ETOP
Scenario planning
Buyer utility map
Value chain
analysis
Results based
framework
7 S framework
Six Sigma
Delphi technique
ERRC grid
Business process
reengineering

FORE RUNNERS OF STRATEGY IN BUSINESS MANAGEMENT

Academicians
Practitioners
Consultants
Enthusiasts
Thought
leaders

Concepts, ideas
Theories,
prescriptions
Tools, frameworks
Techniques
Benchmarks

Philip Selznick idea of distinctive competence

Alfred Chandler structure follows strategy
Michael Porter 5 forces analysis
Jay Barney Resource Based view of strategy

EXERCISES for UNDERSTANDING

Locate two retail shops selling readymade garments or clothes in the town
and identify whether the shops have a strategy. Explain how you observed
their strategy and describe it.
Form two or three member teams and each team make a two page note on
the significant contributions of strategy forerunners through web search.
Make a list of the competitive advantages of three reputed firms selling
mobile phone handset brands in your town in a tabular format and assess
which of the three companies will grow better in future. Explain the
reasons for your choice of the company, for future growth.
Which of the mobile phone companies in exercise 3 above has benefited
most from the learning curve? Assess the relevance and role of learning
curve and innovativeness in the growth of the three firms. By taking one
model released two years before, make a graph of the learning curve of the
three firms with cost of the handset in Y axis and number of pieces
manufactured in X axis.
Organize a debate on whether learning curve or innovativeness gives more
or better competitive advantage to a firm using examples of products from
firms.

STRATEGY PRACTICE: GAMEPLAN OF BRITANNIA

How a tagline helps a company to get three- fold increase in
turn-over in eight years?
What are the strengths and capabilities of Britannia ?
What are the advantages of shifting Britannia from a biscuit
company to a food company ?
what is the core of the strategy or common thread in all
decisions of Britannia ?
Is there enough space to grow for all biscuit companies in India?
If yes, what winning formulae can be offered to a firm ?