Introduction to Strategy PDF

1 - introducing strategy fredag 22. november 2024 11:30 Definitions of strategy Peter drucker - "A firms theory about how to gain competitive advantage" Henry mintzberg - "A pattern in a stream of decisions" Micheal Porter - "Competitive strategy is about being different. It means deliberatly choo...

1 - introducing strategy fredag 22. november 2024 11:30 Definitions of strategy Peter drucker - "A firms theory about how to gain competitive advantage" Henry mintzberg - "A pattern in a stream of decisions" Micheal Porter - "Competitive strategy is about being different. It means deliberatly choosing a different set of activities to deliver a uniqe mix of value" Exploring strategy - "The long-term direction of an organization" Three horizons for strategy Horizon 1 - extend and defend core business Current core activities Horizon 2 - build emerging businesses Should provide new sources of profits Horizon 3 - create viable options Typically risky RnD projects, startup ventures, Strategic hierarchy Levels of strategy Corporate-level strategy The scope of the organisation Portfolio analysis Orgnaisation design Resource allocation Business-level strategy Competitive/best value strategy Innovation Responses to rivals moves Strategy's three branches Context (internal and external) Research:  Macro-environmental Industry analysis Cultural analysis Resource-based view Content (strategic options) Research: Choice and performance Process (formation and implementation) Research: Strategic planning Choice and change Strategy-as-practice Strategic position - elements that influence a company's strategy Macro-environment : what are the macro-environmental opportunities and threaths? Industry and sector : how can the organisation manage industry forces? Resources and capabilities : what resources and capabilities support the strategy? Stakeholders and governance : what resources and capabilities support the strategy? History and culture : how does culture fit the strategy? Strategic choices Business strategy and models : how should business units compete? Corporate strategy and diversification : which businesses to include in a portfolio? International strategy : where should the organisation compete internationally? Entrepreneurship and innovation : Is the organisation innovating appropriately? Mergers, acquisitions and alliances : Should the organisation buy other companies, ally or og it alone? Strategy in action Evaluating strategy : Are strategies suitable, acceptable and feasable? Strategy development processes : What kind of strategy-making process is needed? Organising and strategy : What are the required organisation structures and systems? Leadership and strategic change : how should the organisation manage necessary changes? The practice of strategy : who should do what in the strategy process? Different strategy lenses Strategy as design Strategy as experience Strategy as variety Strategy as discourse 2 - macro-environment analysis tirsdag 26. november 2024 12:44 Macro-environment- consists of broad environmental factors that impact to a greater or lesser extent many organisations, industries and sectors Forecasting Megatrends Inflexion points Weak signals Prediction emphasis Scenario analysis Learning emphasis Pestel analysis Political, economic, social, technological, ecological and legal Nonmarket and market environment Market environment consists of suppliers, customers and competitors Nonmarket environment involves primarily the social, political, legal and ecological factors, but can also be impacted by economic factors. Politics The role of the state. In many countries and sectors, the state is often important as a direct economic actor, for instance as a customer, supplier, owner or regulator of businesses Exposure to civil society organisations Political risk analysis The macro-micro dimension. The macro dimension of political risk refers to the risks associated with whole countries Internal-external dimension. The internal dimension of political risk relates to factors originating within the countries, for example government change or pressure from local campaigning groups Economics Currency, interest rates, economic growth Three sub cycles for economic growth: The Kitchen or stock cycle -three to four years The juglar or investment cycle - 7-11 years Kuznets or infrastructure cycle - 15 - 25 years Some industries are particularily vulnerable to economic cycles for example: Discretionary spend industries. Industries where purchasers can easily put off their spending for a year or two High fixed cost industries. Airlines, hotels and steel suffer from economic downturns because high fixed costs in plant, equipment and labour tend to encourage price-cutting when demand is low Social Social factors that influence supply and demand  Demographics Distribution (of wealth) Geography Technology Rnd budgets Patenting activity Citation analysis New product announcements Media coverage Ecological Direct pollution obligations Product stewardship- commitment to sustainable value chain Sustainable development Legal Taxation, labour, consumer regulations Three different types of capitalism: Liberal market economies Coordinated market economies Developmental market economies Forecast approaches Single-point forecasting is where organisations have such confidence about the futyre that they will provide just one forecast number. For example population in a market will rise by 5 %. Range forecasting is where organisations have less certainty, suggesting a range of possible outcomes Alternative futures forecasting typically involves even less certainty, focusing on a set of possible yet distinct futures. Directions of change Megatrends are large-scale political, economic, social, technological, ecological or legal movements that are typically slow to form, but which influence many other activities and views, possibly over decades. Inflexion points are moments when trends shift in direction, for instance turning sharply upwards or downwards Weak signals are advanced signs of future trends and are partivularly helpful in identifying inflexion points Scenario analysis Scenarios offer plausible alternative views of how the macro-environment might develop in the future, typically in the long term Defining scenario scope. Scope refers to the subject of the scenario analysis and the time span Identifying the key drivers for change comes next. Example pestel analysis Developing scenario stories  Identifying impacts of alternative scenarios on organisations is the next key stage of scenario building Monitor progress 3 - Industry and sector analysis onsdag 27. november 2024 12:20 An industry is a group of firms producing products and services that are essentially the same. A market is a group of customers for specific products or services that are essentially the same Porters five forces framework 1 - Extent or rivalry between competitors 2 - Threat of entry 3 - threat of substitues 4 - power of buyers 5 - power of suppliers Competitive rivalry Five factors tend to define the extent of rivalry in an industry or market Competitor concentration and balance Industry growth rate High fixed costs High exit barriers Low differention Threat of entry Important entry barriers: Scale and experience (economies of scale) Access to supply or distribution channels Expected retaliation Legislation or government action Incumbency advantages Threat of substitutes Price/performance ratio is critical to substitution threats Extra-industry effects are the core of the substitution concept. Substitutes come from outside the incumbents industry and should not be confused with competitors threaths from within the industry Power of buyers Buyer power is likely to be high when some of the following four conditions apply: Concentrated buyers  Low switching cists Buyer competition threat Low buyer profits and impact on quality Power of suppliers Concentrated suppliers High switching costs Supplier competition threat Differentiated products Implications of the five forces Next step is thus to understand the implications of these: Which industries to enter (or leave)? How can the five forces be managed? How are competitors affected differently? Industry types Monopoly One firm Often unice product or service Very high entry barriers Very low competitive five forces threat Oligopoly Few competitors Product and service differences varies High entry barriers Competitive five forces threat varies Perfect competition Many competitors Very similar products or services Low entry barriers Very high competitive five forces threat Industry life cycle Blue oceans are new market spaces where competition is minimised Red oceans are industries already well defined and rivalry is intense 4 - resources and capabilities torsdag 28. november 2024 10:28 What are resources and capabilities? What type of resources and capabilities can contribute to competitive advantage and superior performance? How can resources and capabilities be evaluated? How can resources and capabilities be developed and managed? Resources and cabilities of an organisation contribute to its long-term survival and potentially to competitive advantage Resources: what we have Capabilities: what we do well Intangible assets Brands, capabilities Threshold resources and capabilities are those needed for an organisation to meet the necessary requirements to compete in a given market and achieve parity with competitors in that market. Distinctive resources and capabilities are required to achieve competitive advantage. VRIO: Value: di resources and capabilities exists that are valued by costumers and enable the organisation to respond to environmental opportunities or threats? Rarity: do resources and capabilities exists that no (or few) competitors posses? Inimitability: are resources and capabilities difficult and costly for competitors to obtain and imitate? Organisational support: Is the organisation appropriately organised to exploit the resources and capabilities? Complexity The resources and capabilities of an organisation can be difficult to imitate because they are complex and involve interlinkages. Internal linkages: there may be linked activities and processes that, together, deliver customer value External interconnectedness: organisations can make it difficult for others to imitate or obtain their bases of competitive advantage by developing activities together with customers or partners such that they become dependent on them. Example is apple Causal ambiguity Competitors find it difficult to discern the causes and effects underpinning an organisation's advantage Characteristic ambiguity: where the significance of the characteristic itself is difficult to discern or comprehend Linkage ambiguity: where competitors cannot discern which activities and processes are dependent on which others to form linkages that create distinctiveness Organisational knowledge is the organisation-specific, collective intelligence, accumulated through formal systems and people's shared experience Value chain describes the categories of activities within an organsation which, togheter, create a product or service Value system is the set of inter-organsational links and relationships that are necessary to create a product or service Benchmarking Used as a means of understanding how an organisation compares with others. Two approaches: Industry/sector benchmarking: comparing to other organisations in the same industry sector Best-in-class benchmarking: compares an organisation's performance or capabilities against "best-in-class" perfrmance. From the same or from a different industry. For example southwest airlines improved refuelling times by studying formula one pit stops Two limitations Surface comparisons Simply achieving competitive parity Ikke glem swotty swott swot analysen Dynamic capabilities an organisation's ability to renew and recreate its resources and capabilities to meet the needs of changing environments Three generic types: Sensing: implies scanning, searching and exploring opportunities across various markets Seizing: once an opportunity is sensed it must be seized and addressed through new products or services Reconfiguring: To seize an opportunity mau require renewal and reconfiguration of organisational capabilities and investments in technologies, markets etc 7 (8 i 2023 boka)- mandag 2. desember 2024 11:38 Competitive strategy er bare en liten del av dette kapittelet Competitive strategy is concerned with how a company, business unit or organisation achieves competitive advantage in its domain of activity Competitive advantage is about how a company, business unit or organisation creates value for its users both greater than the costs of supplying them and superior to that of rivals Cost-leadership strategy involves becoming the systematically lowest-cost organisation in a domain of activity. Ex ryanair Four key drivers that can help deliver cost leadership: Input costs. Ex. Labour or raw materials. Can be achieved by outsourcing to countries with low labour costs Economies of scale. Most important when there is high fixed costs Product/process design also influences cost. Efficiency can be designed in at the outset Also needs: Parity with competitors in product or service features Proximity to competitors in terms of features Differention strategy Involves uniqeness along some dimension that is sufficiently valued by customers to allow a price premium. Product and service attributes. Ex. Dyson with better suction than its competitors. Customer relationship. Ex. Zalando with free shipping and returns and bill me later service Complements. Build on linkages to other products or services. Ex is the apple ecosystem Focus strategy Targets a narrow segment or domain of activity and tailors its products or services to the needs of that specific segment to ethe exclusion of others. Cost focusers identify areas where broader cost-based strategies fail because of the added costs of trying to satisfy a wide range of needs Differentiation focusers look for specific needs that broader differntiators do not serve so well Successful focus strategies depend on at least one of three key factors: Distict segment needs Distinct segment value chains Viable segment economics Hybrid strategies Combine different generic strategies Blue ocean strategy (find new markets) The strategy canvas tool compares competitors according to their performance on critical success factors (CFSs) in order to establish potential strategies for the future. Critical success factors are those factors that either are particularly valued by customers or provide a significant advantage in terms of cost Value curves are a graphic depiction of how customers percieve competitors relative performance across the CSFs Value innovation is the creation of new market space by excelling on established CSFs on which competitors are performing badly and/or by creating new critival success factors representing previously unrecognised customer wants Game theory Encourages an organisation to consider competitors likely moves and the implications of these moves for its own strategy Get in the mind of the competitors. Put themselves in the position of competitors to consider their next move  Think forwards and reason backwards. Strategists should choose their competitiive moves on the basis of understanding the likely responses of competitors Business models Describes a value proposition for customers and other participants, an arrangement of activities that produces this value, and associated revenue and cost structures. (hvordan de tjener penger) Value creation Value configuration Value capture Business model patterns Razor and blade (gillette) Freemium (linkedin, spotify) Peer-to-peer (P2P) - attempts to avoid a middle man. 8 (9 i 2023 boka) - corporate strategy and diversification Products/ services mandag 2. desember 2024 12:04 existing new SBU - strategic business unit Scope is concerned with how far an organisation should be diversified in terms of two different dimensions: products and markets Parenting advantage is the value-adding effect of head office to individual SBUs, that make up the organisation's portfolio Growth matrix is a classic corporate stratgy framework for generating four basic directions for organisational growth Diversification involves increasing the range of products or markets served by an organisation. Related diversification involves expanding into products or services with relationship to the existing business. Ansoffs matrix Conglomerate (unrelated) diversification involves diversifying into products or services with no relationships to existing businesses Market penetration implies increasing share of current markets with the current product range Retaliation from competitors - can increase industry rivalry Legal constraints - can raise concerns from official competition regulators Product development New resources and capabilities - involves mastering new processes or technologies Project management risk - typically subject to the risk of delays and increased costs due to project complexity and changing project specifications over time Market development New users - example alumunium, whose original users, packaging and cutlery manufacturers, are now supplemented by users in aerospace and automobiles New geographies - internationalisation, spread of retailer into new towns Diversification drivers: Four potentially value creating drivers for diversification: Economies of scope - refer to efficiency gains made through applying the organisation's existing resources or competences to new markets or service Dominant logic - is the set of corporate-level managerial competences appled across the portfolio of businesses Exploiting superior internal processes Increasing market power Synergies are benefits gained where activities or assets compement each other so that their compined effect is greater than the sum of the parts (2+2=5) Three potentially value destroying diversification drivers: Responding to market decline Spreading risk Managerial ambition Vertical integration describes entering activities where the organisation is its own supplier or customer Backward integration is movement into input activities concered with the company's current business. Ex. Aqcuiring a supplier of parts for a car manufacturer. Forward integration is movement into output activities concerned with the company's current business (i.e. further forward in the value network) Ex. Going into car repairs, retail or servicing for a car manufacturer Outsourcing is the process by which activities previoulsy carried out internally are subcontracted to external suppliers Decision to integrate or subcontract rests on the balance between: Relative stratic capabilities - does the subcontractor have the potential to the work significantly better Risk of opportunism - is the subcontractor likely to take advantage of the relationship over time? Transaction cost framework suggests that the costs of opportunism can outweigh the benefits of subcontracting to organisations with superior resources and capabilities. Divestment occurs when the organisation decides to pull out of one or more of its businesses. Two main types:  Sell off: the SBU is sold to another company. If the acquirer uses a lot of debt to buy the sell-off this is termed a leveraged buy-out (LBO), if the SBU management team raises finance to buy the business, it is a managed buyout (MBO) Spin off: the shares of the SBU are distrubuted to parent organisation shareholders and the business is listed on the stock exchange Value adding activities Envisioning : the corporate parent can provide a clear overall vision or strategic intent for its business units Facilitating synergies: The corporate parent can facilitate cooperation and sharing across business units, so improving synergies from being within the same corporate organisation Coaching: The corporate parent can help business unit managers develop capabilities, by coaching them to improve their Proving central services and resources Interving: finally the corporate parent can also intervene within its business units to ensure appropriate performance Value destroying activities Adding management ciosts: corporate staff and facilities are expensive Adding bureaucratic complexity Obscuring financial performance Portfolio manager operates asan active investor in a way that shareholders in the stock market are either too dispersed or too inexpert to be able to do. In effect the portfolio manager is acting as an agent on behalf of financial markets and shareholders with a view to extracting more value from the various businesses than they could achieve themselves. Synergy manager is a corporate parent seeking to enhance value for business units by maaging synergies across business units. Achieving such synergistic benefits involves at least three challenges: Excessive costs Overcoming self-interest Illusory synergies The parental developer seeks to employ its own central capabilities to add value to its businesses. This is not so much about how the parent can develop benefits across business units or transfer capabilities between business units, as in the case of managing synergy. Two crucial challenges to manageing a parental developer: Parental focus. Corporate parents need to be rigorous and focused in identifying their uniqe value adding capabilities The "crown jewel" problem. Some diversified companies have business units in their portfolios that are performing well but to which the parent adds little value. These can become crown jewels, to which corporate parents become excessively attached. Portfolio matrices The BCG matrix uses market share and market growth criteria for determioning the attraciveness and balance of a business portfolio Star is a business unit within a portfolio that has a high marjet share in a growing company Question mark (or problem child) is a business unit within a portfolio that is in a growing market Cash cow is a business unit within a portfolio that has a high market share in a mature market Dogs are businnes units within a portfolio that have low share in static or decling markets and are thus worst of all combinations However thare are at least four potential problems with the BCG matrix: Definitional vagueness. It can be hard to decide what high and low growth or share mean in particular situations. Capital market assumptions. The notian that a corporate parent needs a balanced portfolio to finance investment from internal sources (cash cows) Unkind to animals. Both cash cows and dogs recieve ungenerous treatment, the first simply being milked, the second terminated or cast out of the corporate home. Ignores commercial linkages. The matrix assumes there are no commercial ties to other business units in the portfolio. Other matrixes include: directional policy matrix, which categorises business units into those with good prospects and those with less good prospects. (by mckinsey) Parenting matrix which focuses upon synergy creation from parenting and introduces parental fit as an important criterion for including businesses in the portfolio. existing Market penetration New products and services Markets Conglomerate diversification new Market development 10 - international strategy tirsdag 3. desember 2024 20:25 International strategy refers to a range of options for operating outside an organisation's country of origin Global strategy involves high coordination of extensive activities dispersed geographically in many countries across the worlds Internationalisation drivers Yips globalisation framework sees international strategy potential as determined by market drivers, cost drivers, government drivers and competitive drivers Market drivers. A critical facilitator of internattionalisation is standardisation of market characteristics. Cost drivers. Costs can be reduced by opertaing internationally. Example suppliers, production. Government drivers. Reduction in barriers to trade and investment has accelerated internationalisation Competitive drivers. These relate specifically to globalisation as an integrated worldwide strategy rather than simpler international strategies For example, a business with a plant in Mexico that sources parts in Brazil and serves both the USA and the Japanese markets must coordinate carefully between the different locations. Geographic sources of advantage' New entrants from overseas typically starts with disadvantages relative to local competitors. Locals have superior knowledge of market and institutions. Locational advantage: Porter's diamond Suggests that locational advantages may stem from local factor conditions; local demand conditions, local related and supporting industries, and from local firm strategy structure and rivalry. For interacting determinants of locational advantage: Factor conditions. These refer to the "factors of production" that og into making a products or service (ie raw materials, land and labour) Home demand conditions. The nature of the dinestuc customers can become a source of competitive advantage Related and supporting industries. Local clusters of related and mutually supporting industries can be an important source of competitive advantage. Firm strategy, industry structure and rivalry International value system Global sourcing: purchasing services and components from the most appropriate suppliers around the world, regardless of their location. Two locational advantages Cost advantages. Ie facebook servers in sweden Unique local capabilities International strategies Global integration encourage organisations to coordinate their activities across diverse countries to gain efficient operations Local responsiveness implies a greater need to disperse operations and adapt to local demand Global-local dilemma The extent to which products and services may be standardised across national boundaries or need to be adapted to meet the requirements of specific national markets Four basic international strategies are: Export strategy. This strategy leverages home country capabilities, innovations and products in different foreign countries Multi domestic strategy. This is a strategy that maximises local responsiveness. Based on different product or service offerings and operations in each country depending on local market conditions and customer preferences. Global strategy. A strategy that maximises global integration. In this strategy, the world is seen as one marketplace with standardised products and services that fully exploits integration and efficiency in operations Transnational strategy. Tries to maximise both responsiveness and integration Market selection and entry Country and market characteristics Pestel - Dette kan du! CAGE framework emphasises the importance of cultural, admistrative, geographical and economic distance Country markets can be assessed according to three critera: Market atractiveness to the new entrant, based on pestel, gace, five forces Defenders reactiveness, likely to be influenced by the market's attractiveness to the defender but also by the extent to which the defender is working with a globally integrated, rather than multi domestic strategy. Defenders clout, that is the power that the defender is able to muster in order to fight back. Entry mode strategies Entry mode strategies differ in the defree of resource commitment to a particular market and the extent to which an organisaiton is operationally involved in a particular location. Exporting Licensing Franchinsing Joint venture The staed international expansion model proposes a sequential process whereby companies gradually increase their commitment to newly entered markets, as they build knowledge and capabilities Challenged by two phenomenon Born global firms are new small firms that internationalise rapidly at early stages in their development Emerging country multinationals often move quickly through entry modes Subsidiary roles and strategies in multinatinoal firms Strategic leaders are subsidiaries that not only hold valuable resources and capbailities, but are also locatied in countries that are crucial for competitive success because of, for ex, the size of the local market or the accesasability of key technologies Contributors are subsidiareis located in countries of lesser strategic significance but with sufficiently valuable internal capababilities to nevertheless play key reles in a multinational organisations competitive success. Implementers, though not contributing substantially to the enhancement of a firms competitive advatage are importnat in the sence that they hlp generate vital financial resources. Black holes are subsidiaries located in countries that are crucual for competitive success but with low level resources or capabilities. 15 - implementing strategy onsdag 4. desember 2024 12:43 Implementation refers to the translation of a chosen strategy into organisational action in order to achieve strategic goals Hard implementation Structures give people formally defined roles, responsibilities and lines of reporting Systems support and control people as they carry out structurally defined roles and responsibilities Structural types Functional structure divides responsibilities according to the organisation's primary specialist roles such as production, marketing and finance Divisional structure is built up of separate divisions based on products, services or geographical areas Matrix structure combines different structural dimension simultaenously, for example, product divisions and geographical territories or product divisions and functional specialisms Agile teams are small, entrepreneurial groups given the autonomy to respond quickly to the needs of costumers Planning systems Strategic planning style Financial control style Strategic control style Performance targeting systems KPI- key performance indicators Performance targeting can be particularly appropriate in certain situations: Within large businesses, to control SBUs In regulated markets, In the public services, governments typically set targets for outputs Three potential problems with targets: Inappropriate measures of performance are quite common. For example, managers often prefer indicators that are easily measured based on inadequate understanding of real needs on the ground Inappropriate target levels Excessive internal compitition. Sub units competing with each other leads to not incentive cooperation Soft implementation Includes cultural change, sansemaking and procedural justice. Cultural change: five step process Determine the required culture Analyse the gap between the existing culture and the required culture Develop a plan to bridge the gap between the existing culture and the required culture Implement the plan: four Rs Recruitment  Retaining Reward Reinforcement Review the culture change for its success and its consistency with the strategy and take action to sustain the change or adjust it Sensemaking The cocgnitive and emotional process through which managers understand, interpret and make coherent their chaning environments The fracturing, or breaking down, of old ways of understanding the organisation's strategy The differentitated understanding of the new strategy, according to the local sensemaking of particular groups of managers The mutual adjustment of differentiated understandings as managers come to sufficient concensus to work together as a coherent organisation, at the same time as retaining the local interpretations rewuired to deal with specific circumstances Procedural justice Refers to the fairness of the process by which decisions are made Engagement. Involving individuals in decision that affect them Explenation, meaning that everyone affected by a decision understands why it was made that way and why some ideas and inputs were finally overridden Clarity of expectations. Individuals have a firm understanding of what is expected of them, before, during and after adecisions are made Strategic alignment Refers to how strategy and organisation should flow logically from the organisation's central goals (or purpose or mission) Strategic configuration Configurations are the set of organisational design elemts that fit together in order to support the intended strategy Mckinseys seven S  Style refers to the leadership style of top managers May be collaborative participative, directive or coercive Staff is about the kinds of people in the organisation and how they are developed Skills relate to staff but, in the 7S framework, refers more broadly to capabilities in general Superordinate goals (sometime known as shared values) refers to the overaching purpose of the organisation as a whole, including the mission, vision and objectives. 16 - leadership and strategic change onsdag 4. desember 2024 14:49 Leadership is the process of influencing an organisation (or group within an organisation) in its efforts towards achieving an aim or goal Top managers Three key roles for top managers, especially CEOs Envisioning future strategy Aligning the organisation to deliver that strategy Empodying change Middle managers Middle manager leadership roles include: Champions of strategic issues. Middle managers are often the closest to market or technological shifts that might signal the need for strategic change. Sense makers of strategy. Top management may set a strategic direction, but how it is explained and made sense of in specific context is up to middle managers Adapters to unfolding events. Uniquely qualified to renterpret and adjust strategy because they have day to day responsibility for implementation at a loval or departmental level Entrepreneurial leaders Three key roles: Opportunity spotters Resource marshallers Risk takers Leadership styles Transformational leaders emphasise soft levers for change such as building a vision for their organisation. Transactional leaders emphasise hard levers of change such as designing systems and controls. Situational leadership encourages strategic leaders to adjust their leadership style to the context they face. Forcefield analysis Compares the forces at work in an organisation acting either to block or to facilitate change What apects of the current situation would block change, and how can these blocks be overcome? What aspects of the current situation might facilitate change in the desired direction? What need to be introduced or developed to add to the forces for change? (7S) The change kaleidoscope Highlights how centextual features can take various forms supporting or resisting change. p. 1233 Strategic transformation Digital transformation is persvasive and discountinous change triggered and shaped by the wodespread use of digital technologies Sustainability transformation is persvasive and discountinuous change of organisational business models, capabilities and operations aimed at creating positive economic, social and environmental impact Turnaround Turnaround strategies emphasise rapidity in change, cost reduction and/or revenue generation, with the aim of fast recovery. Crisis stabilisation. The aim is to regain control over the deteriorating position. Management changes. Changes in management may be required, especially at the top. This usually includes a new chairman or ceo. Gaining stakeholder support. Eg. Banks, shareholders, customers, employees) Clarifying the target markets and core products. Financial restructuring Ambidecterity Organisational ambidexterity is the capacity both to exploit existing capabilities and to explore for new capabilities Four kinds og approaches: Structural ambidexterity Diversity rather than conformity. Mainting a diversity of views within the organisation can help promote abidextierity. The role of leadership. In turn, this has implications for leadership roles in organisations. Tight and loose systems. All this suggests that there needs to be a balance between tight systems of strategy development that can exploit existing capabilities - perhaps employing the disciplines of strategic planning - and looser systems that encourage new ideas and experimentation Levers for strategic change Kotters eight steps for change Symbolic management Some examples: Many rituals of organisations are concerned with effecting or consolidating change Changes in physical aspects of the work encironment The behaviour of managers, particularly strategic leaders The languageused by change agents Timing Should not be ignored. Some examples: Building on actual percieved crisis is especially useful the greater the degree of change needed Windows of oppurtinity in change processes may exist. The arrival of a new ceo, introduction of a new product. Problems of formal change Death by planning. The risk is emphasising planning the change programme rather than delivering it. Organisational exhaustion. Change is often not a one-off process. Ongoing over years Behavioural compliance. Where organisation members comply superficially with the change programme without actually buying into it Misreading scrutiny and resistance The need for resilience Resilience refers to the capacity of organisations to recover from shocks fast and easily after they have happened.