Definition of Strategy Strategy is about positioning an organization for sustainable competitive advantage . It involves making choices about which industries to participate in, what products and services to offer, and how to allocate corporate resources to achieve a sustainable competitive advantage. And its primary goal is to create value for shareholders and other stakeholders by providing customer value (de Kluyver, 2000).
Transcript
Slide 1
Strategy is about positioning an organization for sustainable
competitive advantage. It involves making choices about which
industries to participate in, what products and services to offer,
and how to allocate corporate resources to achieve a sustainable
competitive advantage. And its primary goal is to create value for
shareholders and other stakeholders by providing customer value (de
Kluyver, 2000).
The Mintzberg Perspective Five Ps for Strategy Henry Mintzberg
(1987) 1. Strategy as a Plan A consciously intended course of
action. The strategy is: Made in advance of the actions to which
they apply Developed consciously and purposefully UNR Master Plan
http://www.unr.edu/masterplan/MasterPlanIllustrative.htm
http://www.unr.edu/masterplan/MasterPlanIllustrative.htm
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Five Ps for Strategy Henry Mintzberg (1987) 2. Strategy as a
Pattern A pattern in a stream of actions Hume: Strategies may
result from human actions but not human designs
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UNREALIZED STRATEGY DELIBERATE STRATEGY
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Five Ps for Strategy 3. Strategy as a Ploy: maneuver 4.
Strategy as Position 5. Strategy as Perspective An ingrained way of
perceiving the world The HP Way What personality is to the
individual
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Strategic Planning Sun Tzu:"All men see the tactics whereby I
conquer, but what none can see is the strategy out of which great
victory is evolved."
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The Hierarchical Business Plan
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Building Your Companys Vision By: Collins, James C., Porras,
Jerry I., Harvard Business Review, 00178012, Sep/Oct96, Vol. 74,
Issue 5 Strategic Intent Enhancing the Benefits and Overcoming the
Pitfalls of Goal Setting.
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Vision is the art of seeing the invisible." (Jonathan Swift)
"
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Steps to Build a Vision A well-conceived vision consists of two
major components: core ideology and envisioned future: Core
ideology, the yin in our scheme, defines what we stand for and why
we exist. Yin is unchanging and complements yang, the envisioned
future. The envisioned future is what we aspire to become, to
achieve, to create-something that will require significant change
and progress to attain.
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Core Ideology Core values are the essential and enduring tenets
of an organization. A small set of timeless guiding principles,
core values require no external justification; they have intrinsic
value and importance to those inside the organization. Core
purpose, the second part of core ideology, is the organization's
reason for being. An effective purpose reflects people's idealistic
motivations for doing the company's work. It doesn't just describe
the organization's output or target customers; it captures the soul
of the organization.
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Envisioned Future BHAGs - (pronounced BEE-hags and shorthand
for Big, Hairy, Audacious Goals) A true BHAG is clear and
compelling, serves as a unifying focal point of effort, and acts as
a catalyst for team spirit. It has a clear finish line, so the
organization can know when it has achieved the goal; people like to
shoot for finish lines. A BHAG engages people - it reaches out and
grabs them. It is tangible, energizing, highly focused. Vivid
Description - a vibrant, engaging, and specific description of what
it will be like to achieve the BHAG. Think of it as translating the
vision from words into pictures, of creating an image that people
can carry around in their heads.
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To Begin: Start with the Right Goal Mantra #1 - The primary
goal of Strategic Managers is to produce extraordinary results
(superior long term ROI).
Vision Statements Bill Gates, 1975: "A computer on every
desktop and in every home. Steve Ballmer, 1999: "Empower people
through great software anytime, any place and on any device."
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Mission Statement Mission Statement = Documents the purpose of
organizational existence and often contains a code of corporate
conduct to guide management in implementing the mission (de
Kluluyver, 2000).
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Vision into Mission
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Backing into a Vision Team Building and Vision Building
Exercise
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What goals are worth pursuing? Corporate Social Responsibility
Liberty means responsibility. That is why most men dread it.
(George Bernard Shaw)
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The Stakeholder Perspective The Business Roundtable
http://www.brtable.org/ The Roundtable believes that the basic
interests of business closely parallel the interests of the
American people, who are directly involved as consumers,
employees,shareholders, and suppliers. Thus, chief executives,
although they speak as individuals, have responsibilities which
relate to many factors -- including jobs, products, services, and
return on investment -- that affect the economic well-being of all
Americans.
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Milton Friedman "The view has been gaining widespread
acceptance that corporate officials...have a "social
responsibility" that goes beyond serving the interests of
stockholders or their members...Few trends could so thoroughly
undermine the very foundations of our free society as the
acceptance by corporate officials of a social responsibility other
than to make as much money for their shareholders as
possible."
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Adam Smith It is not from the benevolence of the butcher, the
brewer, or the baker, that we expect our dinner, but from their
regard to their own self interest. We address ourselves, not to
their humaninty but to their self- love, and never talk to them of
our own necessities but of their advanatages (An Inquiry into the
Nature and Causes of the Wealth of Nations, 1776).
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Pareto Optimal From Wikipedia: Given a set of alternative
allocations of, say, goods or income for a set of individuals, a
movement from one allocation to another that can make at least one
individual better off without making any other individual worse off
is called a Pareto improvement. An allocation is Pareto efficient
or Pareto optimal when no further Pareto improvements can be made.
This is often called a strong Pareto optimum (SPO).goods Under
certain idealized conditions, it can be shown that a system of free
markets will lead to a Pareto efficient outcome. This is called the
first welfare theorem. The first theorem is often taken to be an
analytical confirmation of Adam Smith's "invisible hand"
hypothesis, namely that competitive markets tend toward the
efficient allocation of resources. The theorem supports a case for
non-intervention in ideal conditions: let the markets do the work
and the outcome will be desirable. These ideal conditions, however,
collectively known as Perfect Competition, do not exist in the real
world. Any particular situation may differ from these perfect
conditions in less or greater degree, and the degree of this
variation must factor into policy choices.free marketsfirst welfare
theoremAdam Smithinvisible handPerfect Competition
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Traditional welfare economics begins with the rationality
assumption. The heart of the rationality assumption is the belief
that individuals are rational utility maximizers. All people are
thought to behave in a highly rational and rigorously logical
fashion. They attempt to figure out the consequences of every
possible action they might take and the utility they can expect to
receive as a result of each different act. Traditional economic
analysis then argues that allowing people to act freely, and to
exchange goods at will, leads to a Pareto Optimal outcomea
situation in which no one can be made better off without making
someone else worse off.Since a long tradition in philosophy and
economics holds that interpersonal comparisons of utility cannot be
made, most economists maintain that Pareto Optimal economic
outcomes are the best we can do to promote human well being (
Presmman and Summerfield, The Economic Contributions of Amartya
Sen, Review of Political Economy, Vol 12, n1, 2000).
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Is Friedman Correct? Is a corporate officer morally required to
maximize profit?
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A Not So Simple Question in the Stem Cell Debate When does life
begin?
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Normative Philosophy DeontologicalMoral Worth of Action
Teleological Intentions Universalism Categorical Imperative
Consequences Utilitarianism The greatest good for the greatest
number.
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Adam Smith The Theory of Moral Sentiment (1759) begins: How
selfish soever man may be supposed, there are evidently some
principles in his nature, which interest him in the fortunes of
others, and render their happiness necessary to him, though he
derives nothing from it, except the pleasure of seeing it. Of this
kind is pity or compassion, the emotion we feel for the misery of
others, when we either see it, or are made to conceive it in a very
lively manner. That we often derive sorrow from the sorrows of
others, is a matter of fact too obvious to require any instances to
prove it; for this sentiment, like all the other original passions
of human nature, is by no means confined to the virtuous or the
humane, though they perhaps may feel it with the most exquisite
sensibility. The greatest ruffian, the most hardened violator of
the laws of society, is not altogether without it.
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A First Principle is Required The United States Constitution WE
the people of the United States, in Order to form a more perfect
Union, establish Justice, insure domestic Tranquility, provide for
the common defence, promote the general Welfare, and secure the
Blessings of Liberty to ourselves and our Posterity, do ordain and
establish this Constitution for the United States of America.