Strategy and Organization Types

Week 1: Strategy and Basic Types of Organizations

• No simple definition exists for strategy and strategic management.

• Long-term goals play a crucial role, with a strategy being "good" if it leads to a defensible competitive advantage.

• Strategic management involves formulating, implementing, and evaluating decisions to enable an organization to achieve its long-term goals.

• Strategic management consists of analyzing the internal and external environment, setting strategic goals, and developing plans and policies to achieve those goals.

• A good strategy helps organizations achieve a sustainable and defensible competitive advantage, ensuring continuity and in adapting to internal and external developments.

• Bradley et al. (2011) defines 10 criteria (tests) to determine the strength of a strategy, including the ability to beat the market:

• Have competitive advantages over market developments and an economic surplus by exploiting market imperfections.

• A strategy should be based on a real source of advantage with >2 sources:

• Position-based: based on structurally attractive markets.

• Unique capabilities: scarce and exclusive resources like patents or mineral reserve leases.

• Market segmentation should be detailed to gain a strategic advantage, dividing the market into 30-50 smaller, objective segments.

• Anticipating new trends is essential instead of confirming the existing situation.

• Develop insights by assessing information and strategic models, generating new data by viewing the world from the customer's perspective.

• Assess the stability of a chosen strategy for uncertainty, considering how external changes impact the strategy.

• High uncertainty encompasses multiple identifiable outcomes needing preparation, outcomes represented by probability distribution, or total ambiguity.

• Balance obligations, necessary for stability, with the flexibility to adapt to changes.

• Commitment lowers flexibility, while flexibility enables companies to make timely commitments.

• Assess the risk of flawed logic effectively, avoiding over-optimism, anchoring valuation to arbitrary reference points, loss aversion, confirmation bias, herd behavior, and champion bias.

• Two pitfalls can lead to incorrect conclusions and decisions in business:

  • Attribution error: incorrectly attributing observed factors after the fact and assuming that replicating the actions of another company will lead to similar results.
  • Survival bias: Analysis based on a surviving population without accounting for those who could not tell their story.

• A strategy needs to be clearly presented and implemented to be believed, with the management sharing new beliefs supported by the strategy.

• Translate strategy into action plan and actively allocate resources, making responsibilities clear to everyone.

• Market-oriented organizations operate in a market situation and earn revenue through the market.

• Non-market-oriented organizations do not generate profits through the market and operate in the public domain.

• Tompkins (2005) outlines four basic elements for a generic management model, including forming clear goals and mission; delegating authority and responsibilities, clarity of desired outcomes and results, and linking employee behavior and rewards.

• Non-market organizations that want to integrate management elements face limitations:

  • Basis goals are determined by legislators.
  • Legislative bodies define goals that lack clarity and concreteness.
  • Decision-making processes enable external parties to exert influence on goal definition and achievement.
  • Organizations are assigned multiple, potentially conflicting, goals.

• Legislators and elected officials are hesitant to grant autonomy to others, limiting their own influence.

• Top managers are reluctant to delegate powers and responsibilities, fearing they can be held accountable for subordinates' mistakes.

• An ambiguous and abstract definition of goals encourages supervisors and managers to apply procedural rules for accountability.

• Ambiguous/elusive goals cannot formulate suitable performance indicators and measure results effectively.

• Absence of performance indicator prevents linking rewards to results.

• Linking rewards to results is only correct if desired results can be achieved if resources are lacking or if factors play a role without being influenced by the organization.

• Public sector managers lack the authority and resources to reward exceptional performance.

• Public organizations are also responsible for secondary objectives such as fairness, openness, and receptiveness.

Week 2: Organizational Purpose

• Objectives are important and influence strategic thinking and formation.

• Organizations must consider different groups inside and outside the organization and can be divided into stakeholders and shareholders.

• Stakeholder definition depends on broad or narrow perspectives:

  • Broad: based on empirical reality that companies can be vital to almost everyone.
  • Narrow: limited resources and attention of managers to deal with external constraints,.

• Freeman defines stakeholders as groups or individuals affecting or affected by an organization's objectives.

• Stakeholders include people, groups, neighborhoods, organizations, institutions, or broader society.

• The group with which an organization should account for depends on three characteristics:

  • Power: ability to influence the organization or outcome of a situation (financial/legal).
  • Legitimacy: recognition that a stakeholder's interests, claims, or actions are justifiable.
  • Urgency: the degree to which a stakeholder's claims or interests require immediate attention. Latent stakeholders are those with only one of the three characteristics, with low presence and influence. Slumbering stakeholders possess power but do not act due to lacking a legitimate relationship or urgent claim.

• Example: Major investor with shares that doesn't interfere with decision-making but can exert pressure.

• Discretionary stakeholder have legitimacy but no influence and no urgency.

• Example: Library regular with concerns about opening hours but no power or urgency to influence.

• Demanding stakeholder have urgent claims, but lack power and legitimacy, appearing difficult with little influence.

• Expectant stakeholders can become definitive if they gain the missing characteristic (power, legitimacy, or urgency).

• Dominant stakeholders have power and legitimacy, exerting significant influence.

• Example: Company X works with an investor providing financials and having a direct interest in the company's performance.

• Definitive stakeholders have power, legitimacy, and urgent demands, taking an important position, requiring immediate attention.

• Example: If company X risks bankruptcy, the investor becomes a definitive stakeholder with added urgency.

• Example: Citizens worried about a new power plant but reliant on others changing plans due to a lack of juristic/financial power. .

• Shareholders are individuals or entities owning shares, with a financial stake and influence through voting rights.

• The value of a shareholder versus stakeholder is an organization to be considered as an instrument with the organizational goal to serve the owner.

• The measurement of success as both the stock proce and dividend, acting as an agent towards the principal with middle and end goals for the individual.

• There are two perspectives on mission and vision:

  • Shareholder Perspective: Top management must pursue shareholder interests.
  • Stakeholder Perspective: Every individual with is entitled to demand that the organization works for the company.

• Corporate missions are drivers and goals of a company.

• Corporate missions consist of the elements:

  • Reason for existence.
  • Assumption on surrounding and success.
  • Contribution to identity.
  • Clear identity and direction.

• The vision is the scheme of the desired future, consisting of the elements:

  • The intended contetual surrounders
  • The intended industrial surroundings, future organizational function, and time horizion.

• The vision and mission include direction to limit strategic options and steer the organization, legitimizing value to show to stakeholders, and inspiring support to individuals to work as a team.

• The board helps determining the corporate mission activities such as corporate governance, strategic choices, and actions made by the management.

• Forms of Corporate Governance:

  • Two-tier: Supervisory board and management board.
  • One-tier: One board with managing and supervising direction.

• Board Membership: Compilation and background of board members with knowledge, experience, and independence.

• Task and responsibilities of the board differ per country and company.

Week 3: Strategy as a Key Issue

• Strategy: A plan of action to achieve an organization's goals.
• Formulation vs. Creation of Strategy:
  • Formulation: Process to develop an intended strategy.
  • Creation: Process to develop a realized strategy.
• Activities in strategy forming include Identify problematical issue and diagnosing root problems, determining types if handling is needed.
• Roles include the top-, middke- and lowers levels with lines and Staff function and Internal vs external roles.
• To discover what will be successful in the market, you should experiment.
• Feedback from your own experiences provides insight into what really works.
• Learning is intensive, but essential for strategy formation.
• The benefits and disadvantages of the 'incrementalism perspective' are discussed.
• Paradox of Awareness vs. Spontaneous
  • There is a paradox between (1) predicting the future and responding to it and (2) learning from unpredictable events in the future and responding flexibly to them.
• Deliberate strategy leads to intended strategy, while Emergent strategy leads to spontanious intentiosn,
• Benefits include direction, engageement, coordination, optimisation, and promgraming.
• Drawbacks include planing based on the future that is hard to be told.

Week 4: Substantive Strategy Emphasis at the Organizational Level

• Strategies debated at different level:
  • Functional: for every functional part.
  • Business: on organisation level, covering everything.
  • Corporate: more organisation covering
• A business level strategy focuses on how a company competes within its line and befits the product and market segment to achieve advantage.
• The advantage can only be reached if the business model create value for the buyers.
• Every businessmodel should include resources to execute, activities to through put and services for output to create value to customer.
• This model consists fo businessmodel elements including:
  • The better the product or server is fitting for the customer than competitors the better value proposition.
  • Superiour products or services need for the efficiency.
• There are 3 elements in the resource base, including matireal like buidings, relaional aspects with the sorrounding and capabilities to perforn well:
  • KNowledge: rules and insights
  • Abilifity: Portential to execute actitivities
  • MIndset: Mentaity and wilkingness within organaisatuon..
• There are different appraoches for the businesslevel strategy such as inside-outs and outside in:
  • Outside in Focuses on the maarket as the startingpoint and Focuses on market development such as first moving and compentencies.
• MVO also counts as the heartfactor of the business model in all the elemetns with its logic and waalues such as shell and esso.

Week 5:International context

• 3 degrees of globalization:
  • Worldwide scope
  • Worldwide similarity
  • Worldwide integration 3 important intagration mechanism
  • Standerization
  • Coordintation
  • sentralization

Week 6: Business Models - From Strategy to Marketing

• Marketing involves activities and processes such as creating, communicating, delivering, and exchanging offers to customers, partners, and society.
• Value proposition elements that matter for the customers include:
  • Points of difference better then competitors
  • Points of paritity equal then competitors.
• The model describes an organizations ability to generate value like value proposition, customer releationships, revernue streams, distribution channels, costumer segments, core capacties and partenr networks.
• Ways to relate in consumer relationships are:
  • Personal Assistance
  • Dedicated Personal assistance
  • Self-service
  • Automated services
  • Communities
  • Co-creation
• A way to generate revenue include:
  • subscriptions, baseprice, Addvertisement, Fremium, etc.

Week 7: Marketing Strategy - Segmentation and Positioning

• Marketing strategy involves choosing groups and positioning the merk with the approach as:
  • Segnementation: Dividing the total market in homogenic consumergroups.
  • Targetting: Foicissing on a given segmnent
  • Positonig: Creating a clear and distingusinh position for the product in respect with competitors.
• The 3 segement variables include:
  • Preosn bound, cotagry and brand bonded as segement vartables. There are 3 brandfunctions for customer such as identifiabliity and symbolic functions as quality.

Week 8: Business Marketing

• The type of function in Marting SImon (1989) can be detrimined by the ability wether it does cappaticitc or product focus, and if it is an task or market organization.
• A task organization consists of a mother that has to work for the mother.
• The probelmatica in some of those functions of mixing them all and can caues strategic ability.
• A main supplier is repsonbilbe for deveölopment etc aan all 3 keyelments..
• Th strateies should be in line wiht supply, value and resources to creat effiency.
• Criterais for the markets and its segments incldue code like SBI and locations as customer value to be determend.

Week 9: Online marketing

• Algorithmes are used in determine who to target and how .
• Influencer Marketing; By influencing people on sicilaemidia with other people.
• Ambassedeurs have several talks about stay stimueld and speend

Week 10: supply chain management

• Managetment of the functions
  • techtial
  • Logistiacal
  • Commefrcial
• There strateies how the inkoop strateies could coulnect and by contribue to the product and pricess throuhg leveranciers.
• Linkate with the inkoop and the requirements on inkoopmarket is to aansilut upon market.
• The complesity supply are has its advantages.
• In koop is to create a free enviroments and there has. ro be no dependice on somene.