team engineering and management consultants

The University of Buckingham

Welcome To:
Corporate Strategy
Business Complexity and Society
Presented By
Dr.Mazen Maswadey
Ph.D Business Administration
Amman
26/11 – 30/11/2005
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 ‫بسم هللا الرحمن الرحيم‬

 “And their matters

are attained by
consultation between
them(1)” Surat Al-
Shourah Ayah 38
Holy Quran

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Corporate Strategy
 What is it?

 What are its main concerns?

 How is it different from business-level

strategy?

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 Basic Concepts
 MANAGEMENT IS A SOCIAL PHENOMENON
It is a rational; mental; social phenomenon based
on planning, organizing, directing, coordinating,
staffing, and control principles. Aiming to facilitate
individuals and people to establish their
organizations and projects for accomplishing their
objectives and the organization's purposes
efficiently and effectively, it could be a process or a
system or a behavior. It can be applied to people,
things, ideas, and on any activity or function.

 Source: isixsigma. com dictionary posted by Mazen

Maswady

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Basic Concepts
Effectiveness
Bridging the gap between the society's
purposes and the organizational and
workers objectives in the organization
& perpetuating innovation and creation

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team

Basic Concepts
 STRATEGY:
Is the pattern of resource allocation decisions made
throughout an organization. These encapsulate both
desired goals and beliefs about what are acceptable and,
most critically,unacceptable means for achieving them.
 I t is a game and a pattern used as useful notions (Stacy
1993).
 STRATEGIC MANAGEMENT:
Is a systematic approach to amajor and increasingly
important responsibility of general management to
position and relate the firm to its environment in a way
which will assure its continued success and make it
secure from surprises.

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 Basic Concepts
 Corporate Strategy
 Nature and scope of the enterprise as a whole
 Outlines general purposes and core values
 Main activities or the principles on which activities are chosen
 Business Strategy
 One for each business activity within the enterprise
 Describes how that business will compete in its marketplace
 No distinction from corporate strategy in single business
enterprises
 Functional Strategies
 One for each major function
 e.g. Marketing, Human resources, Information technology
 Coherent with corporate and business strategies

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Why We Do Strategy?

 Gain Competitive Advantage (over Core Competition)

 Sets organization apart
 Having something other competitors do not
 Doing something better than other organizations
 Doing something others can not
 Necessary for long-term success and survival

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 Competitive Advantage


The ability of any organization or enterprise to

dominate in the national and international markets,
through offering quality products or services, which are
exceeding the requirements of the customers and
stakeholders.

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10 3/12/2013
 PROCESSES INPUTS
OUTPUTS (STRUCTURES)
(TTPS)
(OUTCOMES)

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Types of Strategic Alternatives
 Business-level strategy is the set of strategic
alternatives that an organization chooses from
as it conducts business in a particular industry
or market.
 Corporate-level strategy is the set of strategic
alternatives that an organization chooses from
as it manages its organization and operations
simultaneously across several industries and
markets.

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 Why Executives Fail?
The most common reason was their
inability to execute strategy. To
succeed, strategy must be tested and
adapted in a continuous process of
feedback, learning, innovation, creation in
organizations that are strategy
focused.

___________
Source: Fortune, 2000 13 3/12/2013
 team Corporate Strategy Triangle

Vision

Mission

Goals & Objectives

Role of the Corporate Office

Structure Systems Processes

Corporate Advantage
CA = ƒ (quality of elements, internal & external consistency, mutually reinforcing)
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Corporate Strategy Triangle
Competitive Advantage

Corporate
Strategy
Formulation
Corporate Strategy Implementation
Structure Systems Processes
Control Decentralize Decision Making

Corporate Advantage

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Military Strategy
 Originated to help armies win battles
 Emphasises winning
 Zero-sum game
 Emphasises leadership
 Focus on taking action to achieve desired aims
 Where the analogy breaks down
 No customer to satisfy in business sense
 Assumes simple hierarchical structure
 Assumes obedience to orders

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The seven descriptive schools

 School Nature of Process

 Entrepreneurial Vision
 Cognitive Mental Process
 Learning Emergent
 Power Negotiation
 Cultural Collective process
 Environmental Reactive process
 Configuration Transformational

Source: Adapted from Mintzberg,Ahlstrand and Lampel Strategy Safari Prentice Hall (1998)
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 team

 The Nature of Strategy

1. Strategy is a serious, exciting and often
bizarre game that managers play every day.
2. It is a game that groups of managers play
with other groups in their own and other
organizations and with individuals both
inside and outside their organization.

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 team

 The Nature of Strategy

3. The smallest players in the game are
individual mangers, single-person
households and one-person businesses.
4. The largest players are powerful teams of
top mangers in global corporations and
government organizations.

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 team

 The Nature of Strategy

5. Some of the internal players are called
departments, others business units, and yet
other project teams.
6. Some of the external players are called
customers, others suppliers, and yet others
competitors, regulators, or financiers.

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 team

 Why a game?
 Its is important right at the outset to
think of strategy as a game that people
play, taking about it as a response that
the organisation makes to an
environment.
 When managers think in terms of one
thing adapting to another, they play the
strategy game in unimaginative,
predictable way that are unlikely to lead
to winning positions.

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 Conventional View of Strategy

Strategy • What business are we in?

• How will we compete?

• Marketing, manufacturing, finance,

Functional Strategies HR, etc.

Key Success Factors • What critical tasks must get done to

execute the strategy?

• Design practices and systems

Organizational Alignment (recruitment and selection, performance
management, training and development,
etc.)

Senior Management Role • Monitor alignment and compliance

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 A Values-Based View of Strategy
Fundamental Values or Beliefs
Design Management Practices
That Reflect and Embody
These Values
Use These to Build Core
Capabilities
Invent a Strategy That is Consistent
with the Values and Uses the
Talents & Capabilities of People/
Organization to Compete in
New and Unusual Ways
Senior Management’s Role
• What are our basic Principles, Philosophies
and Core Values?
• What do we believe in?
• What policies and practices are consistent
with these Values and Philosophies?
•What can we do for the customer better
than our competitors?
• Given our capabilities, how can we deliver
values to customers in a way our
competitors cannot easily imitate?
• Senior management “manages” the values
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and culture of the firm.
3/12/2013
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
 Result of deep involvement with business
 Pattern of behaviour resulting from embedded
culture
 An emerging pattern of successful behaviour

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 team

Our Orientation
Our task as learners of Strategic
Management is to try to determine
which patterns of moves lead to
success and which do not, and this
means that we too must pay
attention to the dynamics

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 team

 Important Key Questions

1. The first key question we will be
addressing throughout this seminar What
can we say about the dynamics of
organisation, and the impact this has
on how managers make strategies?
2. Second key question that we will be
exploring, What do we know about the
operation of the feedback systems
that drive an organisation and about
the patterns of behaviour those
feedback systems produce?
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 team

 Important Key Questions

3. The third key question that will arise again and

again in the following sessions is that of just,
What uncertainty and ambiguity mean for
the processes of strategic management?
4. Fourth key question that will concern us much
in that follows, namely the central importance to
an understanding of strategic management of the
nature and role of shared ways of
understanding the word to deal with
uncertainty and ambiguity.

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 team

 Important Key Questions

5. Fifth key question that we will return to

frequently as we proceed through the sessions
that follow: to what extent is successful strategy
that result of organizational intention and to
what extent does it emerge from the complex
interactions between people in organizations?

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 team

 Important Key Questions

6. Sixth key question that we will keep returning

to in later session is therefore to do with the
behaviour of people in groups and the impact
this has on the way they choose and act
strategically. The importance of the
behavioural aspect is reinforced when you
consider the frequency with which myths grow
up in organizations.

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 team

 Important Key Questions

7. Key question number seven The role of the

informal organization ?effects? Outputs?
8. Key question number eight that we will pose a
number of times in the seminar: is success to be
found in states of stability, consistency, and
consensus, or does it have more to do with
instability, contradiction, and conflict?

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 team

 Important Key Questions

9. Nine key question that will occupy our

attention as we move through the
seminar, namely that to do with paradox?
We will see that organizational success is
not a matter of either stability or
instability, but one of both stability and
instability.

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 team

Defining the key features

of the strategy game
 Studying the dynamics
 When we seek to understand strategy
in terms of patterns over time and
strategic management in terms of the
feedback processes generating those
patterns, we are conducting a study of
the dynamics of organisations.

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 team

Defining the key features of

the strategy game
 In a dynamic study we are concerned with the
ebb and flow over time in the game managers in
an organisation are playing, and with how they
constitute n interactive system.

 We are concerned with how the players are

provoking responses from each other and whether
their moves are regular and predictable or not.

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 team

Defining the key features

of the strategy game

 Dynamics is concerned with the

stability or instability of a system and

the conditions that produce that

stability or instability.

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 team

Defining the key features

of the strategy game
 Static analysis
The posture(Looking Internally) of an
organization refers to matters such
as:
 The composition of its activities in
terms of product lines and markets
operated in.
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 team

Defining the key features

of the strategy game
 The technologies on which those
activities are based
 The manner in which the
organization is structured and
controlled
 The predominant shared behaviors
or culture of the people in the
organization.
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 team

Defining the key features

of the strategy game
 Static analysis
The position (looking externally)

is what you see when you stand at

the organizational boundary and
look outwards

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 team

 Static analysis

 POSITION OF THE
ORGANIZATION(Looking Externally)

 Market shares in particular segments;

 Customer image;

 Competence in relation to competitors;

 Relative importance to suppliers.

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 team

Defining the key features

of the strategy game
 Static analysis
The posture and the position of the
organisation are the result of the
strategy, the pattern in actions, it has
pursued. That posture and position
determine its performance at the time
and performance refers to:
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 team

Defining the key features

of the strategy game
 Static analysis

 Financial dimensions such as cost

levels, return on capital, profit,
growth; and

 Operational dimensions such as

quality and service levels
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 team

Defining the key features

of the strategy game
 Comparative Statics:

When we seek to understand strategy

in terms of comparisons between one

point in time and another, we are

concerned with comparative static

analysis.
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 team

Defining the key features

of the strategy game
 The future – uncertainty and
ambiguity
1. The task of strategic management is
that of somehow producing a posture
and position for a particular
organization will yield acceptable
performance at some long-term future
point.
2. It is necessary to determine the
pattern in action (the strategy) that
will lead to the required postured and
position.
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 team

3. It is necessary to establish the particular

feedback processes, the form of strategic
management, that will lead to the
required patterns.
4. We approach the task of identifying
successful future strategies and strategic
management processes, we are
confronted by the problems of
uncertainty and ambiguity.

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 team

5. The strategy game is a turbulent one in

which everything keeps changing
people's attitudes, their requirements
for goods and services, their tastes and
fashions change all the time as do
technologies, government policies and
many more factors.

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 team

6. Managers have to make decisions and

take actions now that will have
uncertain consequences – the world in
witch managerial action managerial
actions bear fruit. At the time of taking
a decision managers will not be sure of
the meaning of many of the changes
they are trying to cope with – these
changes will be ambiguous.

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 team

Strategic management
 Strategic management
Is a deliberate and international
one. It is most frequently
believed to be a process of:
 Setting a goal in which the
organization’s capability is
matched to the requirements of
its environment.

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Strategic management
 Strategic management
 Analyzing the environment and the
capability of the organization.

 Deriving from the analysis those

options that will achieve the goal.

 Selecting the best option and then

implementing it.

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Strategic management
 Strategic management
It is a model of the strategy process
that deals in an analytical, rational
way with the questions:
 How did we get here?

 Where do we want to go now?

 How shall we get there?

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Strategic management

 Strategic management
The process of discovery, choice and action could
be interpreted as a process in which
managers:
 Discover in an intuitive rather than an
analytical way.
 Make unconscious, automatic choices
rather than consciously intentional ones.
 Carry those choices out in a reflexive,
automatic way rather than a deliberate
one.

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Strategic management
They might not ask the questions in
the rational model at all. They
might:
 Discover changes by chance.
 Make choices on the basis of
emotion and power; and
 Carry those choices out in a
tentative, trial-and-error way.

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 Strategic management

Strategic Thinking Should

 Consider the enterprise as a whole
 Be about the long term and not the immediate
 Address the organisations relationship with the
environment and its capabilities and resources
 Be based on fact and reality with some
imagination
 Have a good understanding of the present
 Be able to think imaginatively about the future

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