Chapter 2: Strategic Leadership - Managing the Strategy Process - PDF

CHAPTER 2 Strategic Leadership: Managing the Strategy Process Professor Sam Yul Cho, PhD LEARNING OBJECTIVES Compare and contrast the roles of corporate, business, and functional managers in strategy formulation and implementation. Evaluate top-down strategic planning, scenario plannin...

CHAPTER 2 Strategic Leadership: Managing the Strategy Process Professor Sam Yul Cho, PhD LEARNING OBJECTIVES Compare and contrast the roles of corporate, business, and functional managers in strategy formulation and implementation. Evaluate top-down strategic planning, scenario planning and strategy as planned emergence.  DQ The Strategy Process Corporate strategy concerns the questions of where to compete. Industry, markets, and geography. Business strategy concerns the questions of how to compete. Cost leadership, differentiation, or value innovation. Functional strategy concerns the questions of how to implement a chosen business strategy. Different strategies will require different activities across the various functions.  Strategic Formulation and Implementation DQ across Levels: Corporate, Business, and Functional Strategy Strategic Formulation Strategic Implementation Exhibit 2.3 Three Approaches to Organizational Strategy Strategic leaders design a process to formulate and implement strategy. Top-down strategic planning: A formal, top-down approach. Scenario planning: A formal, top-down approach. Strategy as planned emergence: Begins with a strategic plan, but it is less formal.  DQ Top-Down Strategic Planning Managers attempt to program future success through analysis of the past. Data-driven strategy process. Prices, costs, margins, market demand, head count, production runs, five-year plans and budgets, performance monitoring. Shortcomings Information flows one-way. Formulation is separate from implementation. E.g., Apple was one of the few successful tech firms using a top-down strategic planning process.  DQ Scenario Planning Managers ask “what if” questions: In the analysis stage. Managers brainstorm to identify possible future scenarios. In the formulation stage. Managers develop different strategic plans to address the possible future scenarios. In the implementation stage. Managers execute dominant strategic plan, which is the option that most closely matches the current reality. If the situation changes, managers can quickly implement any of the alternatives developed in the formulation stage. Scenario Planning within the AFI Strategy Framework Exhibit 2.6 Strategy as Planned Emergence Henry Mintzberg proposes a third approach. Strategy can be planned or emerge from the bottom-up. In contrast to the two approaches, this one is a less formal and less stylized approach to the strategy development. It relies on data, plus: Personal experience. Deep domain expertise. Front line employee insights. Strategy as Planned Emergence Intended strategy: Managers begins with a top-down strategic plan. Emergent strategy: Any unplanned strategy initiatives bubble up from the bottom of the organization Such initiatives can influence and shape a firm’s overall strategy. Realized strategy: Formulated through a combination of top-down intended strategy and bottom-up emergent strategy. Realized Strategy Is a Combination of Top- Down Intended Strategy and Bottom-Up Emergent Strategy Bottom-up Emergent Strategy Autonomous Actions Exhibit 2.7 LEARNING OBJECTIVES Compare and contrast the roles of corporate, business, and functional managers in strategy formulation and implementation. Evaluate top-down strategic planning, scenario planning and strategy as planned emergence. Thank You