Advanced Strategic Man. Lecture 1 (complete) PDF

👋🏻 Advanced Strategic Man. Lecture 1 (complete) Review of Fundamental Concepts External & Internal analysis (SWOT analysis) Advanced Strategic Man. 1  Porter’s 5 Forcers 1. Threats of new entrant...

👋🏻 Advanced Strategic Man. Lecture 1 (complete) Review of Fundamental Concepts External & Internal analysis (SWOT analysis) Advanced Strategic Man. 1  Porter’s 5 Forcers 1. Threats of new entrants 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threat of substitute products or services a. Threat of complement products or services 5. Rivalry among existing competitors —> Framework that looks at an industry (non-profit thinking can also apply), structured approach —> when rivalry increases, entering market is less profitable Examples of failed disruptive innovation: Kodak, Polaroid, Nokia, Blackberry Internal Context Resource based view of the firm Resources (what a firm has) Capabilities (what a firm does) Core Competencies (what a firm does particularly well) Competitive Advantage emerging Advanced Strategic Man. 2  Why is imitation difficult? External aspect: cheaper to imitate others Imitating and adding features builds a competitive advantage Causal Ambiguity → you don’t why it works, it just does. Social Complexity → personal connections cant be replicated. If the right people are helping you, competitors wont be able to get there Historical Conditions Levels of Strategy (pyramid) Corporate Level (high level choice: creating initiatives and projects that push the business) Business Level (from where to how: what metrics should be followed, who should we hire) (how do we create, configure, capture value?) Functional Level (people that do, how are things done?) Advanced Strategic Man. 3  Types of Scope → Vertical Scope → Product Scope → Geographical Scope Digital scope is coming up Value creation (how big is the pie) Value capture (how much am I getting from the pie) Value Configuration Advanced Strategic Man. 4  Trends in Strategic Management Strategy in digital world AI is becoming practical and accessible Managing growth and innovation Hypercompetition Examples: E-commerce, Food-Tech Common Hypercompetition Effects Discount Blood High Customer Churn Consolidation (survival of fattest) Merger mania (2021) & Crowd mania (2011) Social Forces growth in sustainable investments is outpacing traditional investment AI ethics, Google responsible Ai etc. Lecture 2 (complete) Strategy in a Digital World Advanced Strategic Man. 5  What strategies can we apply to digital platforms? What is a digital experience? Digital Journey/Transition from Place to Space Transition from pipeline to platform Emergence of digital ecosystems and multi-sided platforms Strategic Decisions in designing multi-sided platforms Number of sides Design Pricing Governance Digital Business Models PLACE → → SPACE Tangible products, physical stores → More intangible products, digital stores Product based → Service based Oriented towards customer transactions → Oriented towards customer experience Experience Platform Content (what is it like to be (digitized business (what is consumed) a consumer?) processes) Advanced Strategic Man. 6  Produces its own Printed media, Custom build Place news, stories, photos newspaper with own production and etc. style and design delivery Not strictly Offering on different Combining internal proprietary; Obtains Space devices (mobile, PC, and external content from other TV) anywhere platforms sources Pipeline vs. MSP business model Pipeline MSP Resource orchestration (manage the community Resources Control Resources of procedures) Optimization Internal Optimization External interaction & coordination Customer Value & Ecosystem value, value exchanges between Focus Sales users and providers → From supply side to demand side economies MSP enable direct interactions between different groups Advanced Strategic Man. 7  MSP’s cross-side network effects Cross-network effects High Entry Barriers (scale advantage) As soon as platform unwinds: the other side will also leave Network effects can also lead to a decline Competition Threat: MSPs are everywhere Advanced Strategic Man. 8  MSP Strategic Decisions 1. How many sides/users should the platform have? Users 2. How do the users interact? Tech 3. What do they pay for what → are all sides charged equally? Pricing 4. What are the rules of the MSP? Rules CambridgeAnalytica (case where data was sold for political purposes) Advanced Strategic Man. 9  LinkedIn: large cross network effects, larger scale, diversified revenue Conflicts of interest among groups MSP Strategies 4 strategic decision in designing multi-sided platforms: → Increasing Number of Sides +Larger cross network effects +Larger scale +Diversified sources of revenue -One of the sides may not be economically viable -Complexity -Conflicts of interest among groups -More difficult to solve chicken-egg problem → Design Which side should features favor? Information Collection (Advertiser vs. User) Rating Systems (Drivers vs. Passengers) → Pricing No transaction price between sides: charge more to side that benefits more Each side independently: higher price for less price sensitive; bargaining power of MSP over each group Existing transaction price: charge more to the side that can extract more value from the other side (subsidization) → Governance Decision between quality and quantity Centralization / Decentralization to manage this trade-off Advanced Strategic Man. 10  Cost of Looser Rules: Lemon’s Problem (insufficient transparency, information regarding quality) high quality people in the beginning leave and what is left is not attractive Too much competition Lack of complementarities → Costs Costs of tighter rules Centralized MSP costs Technological: eg., designing and including security chips for video consoles Operational: eg., analyzing profiles of individual applicants Costs of looser rules Lemon’s problem: insufficient transparency, information regarding quality (ratings of users?) Too much competition: low incentive to invest in high quality products Lack of complementarities: making sure there is enough offers among sides (eg., diverse geopgraphies in Airbnb) Pipeline or platform examples (netflix, instagram, amazon) Advanced Strategic Man. 11  Lecture 3 (complete) Digital Strategy Resource ad Need Matching on Platforms From Value Chain to Digital Ecosystem Digital scope in Corporate Strategy AI in Organizations AI changes tasks and job descriptions Generation tasks are more exposed than analysis tasks AI use has to be moderated AI in strategy: diagnose, search, choose and monitor Digital Value Creation Digital Strategy across levels Functional Level → Business Level → Corporate Level Digital Value Creation: 4 Configurations: Traditional Business (firm as an integrator) Ecosystems (firm as a collaborator) Multi-sided platforms Firm as a transaction enabler (Uber) Advanced Strategic Man. 12  Firm as a bridge provider (Google Users Ads) → Scale Identifying and matching new needs & resources Identifying the owners of resources & selecting Resource crowd-sourcing (airbnb, Uber, Bridge, ParkEase) Observing and synthesizing customer’s needs Iterative testing (multiple channels, A/B testing) (ExpatEase) → Scope Bridging needs with resources Experimenting with unfamiliar connections (Square) Retail store: institutional investors, business service providers Starts with existing resources, looks for needs (Example: Big Mama) Streamlining unfamiliar connections (Pinterest) Reduces incompatibilities and uncertainties → New needs & resources can be identified with digital Value Creation in Value Chains Advanced Strategic Man. 13  Digital Services → Analytics → Connectivity → Data Sampling capturing value in a digital world: example of lightbulbs Digital Twins (What is digital-twin technology: McKinsey) Corporate Strategy: different types of scope AI in Organizations Organizations execute a collection of tasks & are a collection of tasks Advanced Strategic Man. 14  What tasks are going to be replaced by AI: Exposure Analysis High paying occupations & difficult to learn occupations are exposed Skills for critical thinking & learning are not exposed Re-allocating tasks (people need to be ready to re-skill) Example of Case-Study: critical thinking case where humans perform better Now focusing on the Business & Functional level: Where does organizational change come from? How easy is AI transformation: pre-transformation vs. post-transformation? AI & Social Acceptability AI Explainability High stakes contexts Identity Threats → Uncertainty, risk and loss → need high distributional and procedural fairness for high trust involve stakeholders in algorithm design Advanced Strategic Man. 15  make sure algorithm is easier to understand help people go from manager to system architect include respected peers → Tasks that are non-routine and require high cognitive complexity are likely to attract resistance Classic Strategy Making With AI 1.⁠T ⁠ esla's Resources and Capabilities vs. Established Automakers Tesla’s Unique Capabilities: ⁠ ⁠Battery Technology: Tesla's advanced lithium-ion battery technology and in- house expertise give it a significant edge in range and efficiency. ⁠⁠Software Expertise: Tesla develops its own software, enabling continuous updates and advanced autonomous driving capabilities. Advanced Strategic Man. 16  ⁠⁠Supercharger Network: Proprietary charging infrastructure provides a convenience advantage over competitors. ⁠⁠Brand and Vision: Tesla has built a strong, innovative brand around sustainability and cutting-edge technology, attracting loyal customers. Comparison with Traditional Automakers: Legacy automakers like GM, Ford, and Toyota have more experience in manufacturing, supply chain management, and economies of scale. However, they face challenges in pivoting to electric vehicles due to entrenched ICE (Internal Combustion Engine) systems and cultural inertia. 2.⁠R ⁠ ationale for Tesla’s Strategy ⁠ ⁠Focus on Vertical Integration: Tesla’s strategy includes controlling multiple layers of the value chain (e.g., battery production via Gigafactories, direct sales model, and software development). This reduces dependency on external suppliers and ensures better quality control. ⁠ ⁠First-Mover Advantage: By focusing on high-performance EVs (e.g., Model S), Tesla created a premium market segment, avoiding direct competition with established automakers in the mass market initially. ⁠⁠Learning Curve and Innovation: Tesla adopts a fast iteration cycle, learning and improving its vehicles rapidly through data collected from its fleet. ⁠⁠Optimal Strategy for Strengths and Weaknesses: Tesla leverages its innovative culture and technology leadership while minimizing risks associated with mass production by focusing initially on niche markets. 3.⁠A ⁠ ssessment of Tesla’s Open Patent Decision Background: In 2014, Tesla made its patents publicly available to encourage competition and accelerate the adoption of EVs. Potential Benefits: ⁠ ⁠Market Expansion: Sharing patents could expand the EV ecosystem, indirectly benefiting Tesla by creating more demand for batteries and charging Advanced Strategic Man. 17  infrastructure. ⁠ ⁠Reinforcing Leadership: This move positioned Tesla as a leader in sustainable transportation, enhancing its brand image. Risks and Downsides: Competitors could leverage Tesla’s innovations to develop rival products. However, Tesla likely calculated that its continuous innovation and proprietary infrastructure (e.g., Superchargers, software) would maintain its competitive edge. How to Engage in Class: For Question 1, emphasize Tesla’s focus on innovation and vertical integration versus the scale and manufacturing expertise of traditional automakers. For Question 2, discuss the long-term vision and strategic rationale behind Tesla's decisions, including its bold moves in innovation and market creation. For Question 3, highlight the strategic significance of sharing patents to grow the market while still maintaining Tesla's lead in technology and infrastructure. BYD as a global leader Tesla built their own charging stations, with market growth → exponential growth in the ecosystem (cross-side network effects) Example Ample: assumption that every car uses the same battery system (whose battery is going to be stored in the locations) Lecture 4-6 (complete) Managing Growth & Innovation Managing Innovation Invention Innovation Creative process of thinking of a device, Innovation is finding a place where this solution, software technology fits in the existing economy Applying solution to a real-world Basic knowledge to solution problem Advanced Strategic Man. 18  Why is it difficult to imitate? Causal Ambiguity Social Complexity Historical Conditions (Elon Musk: first car company that never used gas before) Appropriation of Value Regime of appropriability: Conditions that influence the distribution of the value created by innovation Property rights in innovation Protect the returns to inventors (intellectual property: patents, copyrghts) Tacitness and complexity of tech Ease with which the technology can be comprehended and replicated Lead time Window of opportunity for the innovator to build on initial advantage ( capabilities and market position) Complementary resources Resources and capabilities required to finance, produce and market the innovation Protecting Invention: Intellectual Property Advanced Strategic Man. 19  Property Rights in Innovation Patents (exclusive rights to a new product process, substance or design) Copyrights (exclusive rights to artistic, dramatic and musical works) AI generated art can’t be protected by copyright law Trademarks (exclusive rights to words, symbols or other marks to distinguish goods and services; trademarks are registered with the Patent Office → trademarks don’t expire) Trade Secrets (protection of chemical formulae, recipes and industrial processes) When is it good to give access to intellectual rights? Winning standard wars Growing the market Counteracting the power of suppliers (Apple: only apple can repair) Innovation Diffusion: The s-curve Disruptive Innovation → Threat of an Entrant to the the Established Trajectory-sustaining or disruption? (Paper: Customer Power, Strategic investment and failure of leading firms, Strategic management journal) (hybrid electric vehicle are trajectory sustaining (adding a battery onto previous technology), keeping on the same path and incrementally improving/refining Advanced Strategic Man. 20  product) Disruption → new technology Opening up Innovation Risks Risk of Appropriation risk that partner is going to steal innovation (between innovation & diffusion: less value capture) Risk of Misalignment (with partners, also within an organisation) Idea of complementary resources resource-based view shows that only something needs to be done very well, the rest can be outsourced Risk of Miscoordination Closed vs. Open Innovation: Differences and Trade-offs Open innovation: risk of not being able to appropriate value runs into risk of delays Which kind of investment? Trade-off: Resource Intensity vs. Risk of Appropriation Limited investment → limited returns → Market Licensing Risk of licensee lacks motivation or Transactions steals innovation Limited capital investment → Market Outsourcing certain functions Potential dependence on supplier Transactions or partner Flexibility vs collaborative capability → Non-Market Strategic alliances Pool of resources and capabilities Agreements of multiple firms Advanced Strategic Man. 21  Shared investment & risk, requiring collaborative capability → Non-Market Joint Venture Pool of resources and capabilities Agreements of multiple firms Large investment → larger risk → Internal Commercialization Benefits of control in required Internalization resources and capabilities (M&A?) Complementary Resources Innovation in Ecosystems - Manage Expecations Match your innovation strategy to your innovation ecosystem (2006, Adner, R.) Risk of Miscoordination: The tale of two drones (dji vs. BDR) Closed vs. Open Innovation Knowledge Outflows Knowledge Inflows Inside-out or Knowledge Outflows Outside-in or Knowledge Inflows Leverages internal knowledge through external Leverages external knowledge commercialization processes (selling or revealing) sources through internal processes Advanced Strategic Man. 22  Knowledge inflows Knowledge outflow Research consortia Out-licensing IP and technology Venture capital Donating IP and technology Collaboration with intermediates, Spin-outs suppliers and customers Corporate venture capital Acquisition Corporate incubators Outsourcing Joint ventures and alliances Crowdsourcing (crowds & user communities) Closed Innovation Open Innovation External knowledge has a Equal role external and internal supplemental role knowledge Focus on Centrality of the securing “best and brightest” business model Lack of process to manage “false Opportunity to market projects not fitting negative” projects → Outbound flows as firm’s business model → innovation markets spin outs/spill-overs as real options Knowledge is Knowledge is widely distributed scarce, hard to find IP facilitates innovation markets IP as Intermediates as a significant trend defensive Metrics: % internal innovation, time to Innovation intermediates not relevant market Metrics: R&D % sales, # new products Lecture 5 (complete) Guest Lecture: Brisa Group They operate in the physical and in the digital world When innovating risk has to be reduced (need for more control) Innovation funnel Ecosystem-level innovation Open vs. closed innovation External Growth Strategies Advanced Strategic Man. 23  Alliances & M&A → Alliances are more agile, yet risk of value appropriation and management differences → M&As offer more control, yet costly and risky to succeed Which kind of investments? Trade-off: Resource intensity vs. risk of appropriation Licensing Limited investment → limited returns Risk of licensee lacks motivation or steals innovation Outsourcing certain functions Limited capital investments Potential dependance on supplier or partner → Market Transactions Strategic Alliances Flexibility vs. collaborative capability Pool of resources and capabilities of multiple firms Joint Venture Share investment and risk requiring collaborative capability Pool of resources and capabilities of multiple firms → Non-Market Agreements Internal Commercialisation Large investment → larger risk Benefits of control in required resources and capabilities → Mergers & Acquisitions Strategic Alliances & Joint Ventures Advanced Strategic Man. 24  SA: Collaborative arrangement between two or more firms to pursue agreed common goals (may or may not involve equity participation) JV: Particular form of equity alliance where the partners form a new company that they jointly own Potential Benefits and Problems of Alliances Access or acquisition through learning of resources and capabilities Shorter innovation time-to-market Risk sharing Flexibility Management of differences between partners Benefits seldom shared equally Vision of the alliance purpose Appropriability of contribution Company absorptive capacity M&A Acquisition → Purchase of one company by another (friendly or unfriendly) Merger → Amalgamation of two companies to form a new one (typically companies of similar size) Benefits & Problems of M&As Strategic geographical extension consolidation (horizontal & vertical mergers) resources & capabilities Financial under-valued companies Advanced Strategic Man. 25  tax efficiency asset stripping or unbundling Managerial personal ambition bandwagon effect (imitation) Failure of M&A’s Acquiring firms suffer significant loss (10%) in 5 yr post-merger period Target management attitutes and cultural difference no post acquisition integration planning lack of knowledge of industry or target poor management of target no prior acquisition experience A Cultural Perspective Choosing the Right Path to Grow Advanced Strategic Man. 26  Horizons of Growth → Maintaining business → Growing and adapting business → Transforming business Airbnb Case Advanced Strategic Man. 27  Entrepreneurial Strategy → Causation: Setting a goal and looking for the way → Effectuation: Allowing goal to emerge Expectations vs. reality (adapting business model, uncertainty) Opportunity: Discovery or Creation Discovery Perspective Creation Perspective Opportunities exist independent Opportunities are intimately linked with entrepreneurs from entrepreneurs -> external and their iterative actions, understanding of and (technological, social, regulatory) engagement with potential new shocks products or services Advanced Strategic Man. 28  Entrepreneur’s alertness or particular skills Entrepreneurs create opportunities may lead them to by interacting with and developing identify existing opportunities their beliefs about customer needs earlier than others Analyze, plan and execute Execute, get feedback, adapt first choose the ends and then first acknowledge the means at hand and then choose look for the means to achieve a possible end those ends Causation Effectuation Choose between different means to achieve a given effect Choose possible effects that can be created from a Excellent at exploiting existing given set of means knowledge Excellent at exploiting contingencies More useful in planning for a More useful in controlling aspects of an predictable future (existing unpredictable future (new markets created) markets) To the extent we can control the future, we don’t To the extent we can predict a need to predict it future, we can control it Strategy IRL Idea came up when she was living in London as a Portuguese women Case online 4pm Identity statements one brow at a time national presence + stores in brasil 200 employees robust dynamic organization cultue continous training 10 mio € revenue in 2023 Target group: 95% women 5% men 20-50 years old (higher concentration between 30-40) Advanced Strategic Man. 29  Rebranding for male audience closeness (end of 23) Task: Going through their second horizon task is between horizon 2 & 3 without putting horizon 1 in too much danger Justify why we are porposing the next step for Wink the way we are Maximum 5 slides + 1 slide executive summary right use of strategic frameworks + stay true to Wink and their ideas in the case Is our idea feasible to implement? Lecture 7: Social Forces (complete) Purpose over profits, sec filing and ESG targets are more common Creating Shared Value → during setup of business value: how can it be designed according to social good corporate scope (product, industries, geographies, digital scope), improving efficiency without forgetting social good, investing in the ecosystem Difference between creating shared value and CSR Porter & Kramer Capitalism is a form of organizing to accomplish more than if we were alone ; dont blame the game, blame the player Advanced Strategic Man. 30  1. Reconceiving Products & Markets Businesses potentially more effective than governments and NGOs (resource scarcity around NGOs & businesses can just go for it) New opportunities to differentiate, innovate, and grow Emergence of social entrepreneurs (often faster than mainstream businesses) → Horizontal Scope (address societal needs through products and services) → Geographic Scope (Serving unmet needs in underserved communities) Example: Fidelidade (driving app with gamification features, digital platform) rethink the product of the company and increase profit margins by helping others (shared value) 2. Redefining productivity in the value chain Value Stick Framework Walmart’s package reduction initiative Advanced Strategic Man. 31  3. Build Supportive Industry Clusters What are suppliers inefficient or missing locally? What institutional weaknesses or community deficits create internal costs for the firm? → Strong local clusters improves company productivity (greater supply chain efficiency, lower environmental impact, better access to skills) → Collaborative work between companies and the local cluster → Strengthens the link between a company’s success and community success Example: Nestlé Nespresso in Colombia Corporate Social Responsibility vs. Creating Shared Value CSR CSV Value: economic and societal benefits relatovie to Value: doing good cost → Citizenship, philanthropy, → Joint company and community value creation sustainability → Integral to competing → Discretionary or in response to → Integral to profit maximization external pressure → Agenda is company specific and internally → Separate from profit maximization generated → Agenda is determined by external → Realigns the entire company budget reporting and personal preferences Advanced Strategic Man. 32  → Impact limited by corporate footprint and CSR budget Critical Assessment of CSV Strengths Weaknesses csv gives government a clear role in CSV is not original only add on is responsible behavior thinking about social goals csv adds rigor to ideas of conscious CSV ignores the tensions between capitalism and provides an umbrella social and economics goals construct for loosely connected CSV is naive about the challenges concepts of business compliance Doing good? CSR → Clearly articulated and communicated policies and practices of corporations that reflect business responsibility for some of the wider societal good. Caroll’s Pyramid What is the expectation of society on organizations? that its economically profitable, responsible behave well Information Asymmetry Definition → Information asymmetry occurs when one party to an economic transaction possesses greater material knowledge than the other party. One party Other party Markets Buyer Seller Advanced Strategic Man. 33  M&As Acquirer Target Platforms One side Other side AI Corporate Level Functional Level → also barrier to imitations → competitive advantage Greenwashing Example: Fiji and innocent, Ryanair Behaviour or activities that make people believe that a company is doing more to protect the environment than it really is (Cambridge Dictionary) Example: H&M & BP Study on Philanthropy as an Insurance (donations from oil companies) (read paper) Study shows that CSR can be a form of insurance by donating to social causes Advanced Strategic Man. 34  Employees & Company Hidden Motives Study in a management consulting company with Corporate Social Initative (CSI) Expectation: Involvement in CSI → Employee motivation and retention Financial Viability: Reduced expense budgets and personal salary cut (25-50%) interested apply HR screens and offers employees accept or reject offer Advanced Strategic Man. 35  CSR difficult for everyone because of 1) Insurance 2) Greenwashing and 3) Hidden Motives Measuring Impact Sustainability → Avoidance of the depletion of natural resources in order to maintain an ecological balance ESG → Set of standards typically assessed for investment purposes measuring a business's impact on society, the environment, and how transparent and accountable it is Advanced Strategic Man. 36  Difficulties measuring environmental, social and governance standards barely any alignment, big blob, difficulty for companies choosing a rating company, not transparent how which rating company evaluates ESG scores → limited convergence among raters look into paper ESG+ from EY Maersk Sustainability report (moodle) → they have owners of every governance category Assessing Environmental Impact in Scopes Advanced Strategic Man. 37  IKEA Case Lecture 8 (complete) Stakeholder Management Problem of Ethics Problem of Value Creation Problem of Managerial Mindset and Capitalism What are the How should managers think about In a rapidly changing and connections management to better global business context, how between create value and explicitly connect is value created and traded? capitalism and business and ethics? ethics? Value Creation by Ethics of Managerial Mindset through Holistic Capitalism Thinking Advanced Strategic Man. 38  Customers, suppliers, Managing relationships, distribution of employees, financiers Concerns value, rethinking problems in (stockholders, questions of presence of cinflict, improving bondholders, banks, values, choice, and emergent trade-offs for all sides etc.), communities, and potential harms managers and benefits for a large group of groups and individuals Suggestion by Stakeholder Theory: “Adopting as a unit of analysis the relationships between a business and the groups and individuals who can affect or affected by it, then we have a better chance to deal effectively with these three problems.” Stakeholder Ecosystem Higher Financial Performance through Stakeholder Management Collective Action Reliability and Flexibility Value Generation - Mutually beneficial - Avoidance of negative - Excellent reputations are stakeholder outcomes/risk reduction more attractive in the relationships can enhance creates marketplace to the wealth-creating capacity more predictably stable potential business partners, of the corporation returns employees and customers - Extension from - Eliminating the need for - Source of competitive stockholders to elaborate safeguards and advantage, as the firm is stakeholders motivates contingencies that require presented with a managers to draw together detailed monitoring larger number of better Advanced Strategic Man. 39  stakeholders in efficient - Enhanced adaptability business opportunities from manner to achieve financial through effective which to select objectives management of multilateral - Stakeholders are more likely - Facilitates the formation of contracts to reveal valuable information alliances, long-term - Greater organizational that can lead to greater contracts flexibility efficiency and and joint ventures innovation Financial Returns due to Reliability and Stability Gold mining industry - 26 mines in 20 countries Almost no market forces at work Consumers can’t differentiate between gold from one mine or company or another No monetary rewards to more responsible mining by investors Corporate Activism Firms are embedded in conflicting web of relations same colors have good relationships with each other dash red line indicates a kind of conflict Good relationships with some and bad relationships with others Horizontal Inequalities → are “differences in the distribution of economic, political, and social assets between identity groups across demographic divides” Advanced Strategic Man. 40  Intentional corporate activism such as Corporate donations to historically Black colleges and universities Sponsorships to train female engineers Apprenticeship programs for rural youth Unintentional corporate activism such as Amplifying pre-existing economic advantages: Existing rural elite in Indonesia capitalizing on increased vegetable oil demand → At a time of political polarization, immigration crises, wealth inequality, racism and lack of capacity for consensus on action, what to keep in mind? Corporate Activism in the Market How can actions be actively taken in the market? Bridging disconnected groups by creating diverse new ties Pathways to Health Care Career programs of CVS working with US DoL, faith- based organizations, academic institutions, and health-care sector Mindful of exclusion vs inclusion decisions Marriott International’s commitment to diverse workforce CEO leading Global Diversity and Inclusion Council 15,000 champions for TakeCare program Respect for All internal platform Aiming to erode faultlines Advanced Strategic Man. 41  IBM’s Allyship Initiative extensive sensitivity training program “understand race, ethnicitiy, nationality, and how to combat discrimination” 88.3% IBM employees can be their authentic selves Carefully identifying and collaborating with existing communities and civil society Collaborating with National Urban League or the NAACP Legal Defense Fund that have long-existed in the aftermath of George Floyd murder Corporate Activism in the Non-Market Four critical perspectives Legal Analysis Based Corporations form to govern stakeholders who willingly assemble because they anticipate that the value that will be created by the group will be greater than the sum of the parts Initial unawareness of long-term consequences Possibility of coerced or irreversible cooperation Lack of corporate knowledge on unintended activity Heterogeneity in capacity for commitment, power, exit Advanced Strategic Man. 42  Password subgroup assigment pyhjowKozhezboqby9! Lecture 9 (complete) Wink Presentations Lecture 10 (complete) Organization Design Why do organizations restructure? Organization are collections of tasks → Organizational design is a tool to achieve the company’s strategy Communication between channels Shape of hierarchy: flat vs. tall flat (more room for innovation) tall (more room for efficiency) Choice of technology, HR decision (who should be hired, how should job descriptions look like) Forms of Organizing Why do organizations restructure? symbolic reasoning to define a functional role (github case) Functions of a manager Coordination Conflict Resolution Direction Setting Exception Management Advanced Strategic Man. 43  Execution Monitoring → Pressure to redesign due to having a high level view → grouping tasks under different departments Functional Departments (Operations, Finance, marketing, HR) Divisional Departments (Games, consoles, Platforms) Choosing the structure Flat → Hierarchy Functional (more efficient, more siloed) Product (more flexible in the way of reacting) Matrix (having both) Cisco goes from division to devision (product → consumer → tech): restructuring approach (setting up boundaries; the more specialization) Centralization Which strategic question is being answered by whom? Who is making decisions? ( I vs we) Centralized → I've decided that we'll launch the new product in the European market first. Please coordinate with the team to ensure all preparations align with this plan Decentralized → We're considering expanding into new markets, and I'd like you to assess which region would be the most viable option. Please analyze the possibilities and let me know your recommendation i make the decision because I am most informed & knowledgeable when decisions are made horizontal coordination and integration have to be considered Work Specialization What skills/expertise do employees have? Advanced Strategic Man. 44  Specialized → Your main responsibility is to manage our social media accounts. Please focus on creating and scheduling posts for our Facebook and Instagram pages according to the content calendar. Ensure that you adhere strictly to the branding guidelines and leave customer inquiries to the customer service team General → While your primary role is managing our social media accounts, I'd like you to also engage with other departments to identify opportunities for cross- promotion. Feel free to respond to customer inquiries and collaborate with the product team to gather content ideas. You're encouraged to take initiative beyond your usual tasks to help us improve overall engagement Specialization brings expertise & efficiency Specialization reduces ability to integrate, operate seamlessly & increases silos → lack of work specialization Span of Control Regulating managerial load for conflict resolution Large Span of Control → In my role as a retail store manager, I supervise a team of 25 sales associates and cashiers. I focus on setting sales targets and ensuring the team understands our promotions. With efficient delegation and clear communication, I'm able to manage a large team effectively. Narrow Span of Control → As the lead engineer on advanced research projects, I directly supervise a specialized team of 4 scientists. Due to the innovative and complex nature of our work, I provide close guidance and collaborate closely with each team member to navigate technical challenges flat vs. tall hierarchy large span () narrow span (lead engineer with specialized team) Managing more people on average increases overview of company information and coordination Managing more poeple on average increases managerial load and reduces inefficiency Advanced Strategic Man. 45  Boundary Spanning Hot to connect across silos? Horizontal communication/coordination Boundary spanner → Could you please collaborate with our counterparts in the overseas R&D department and also reach out to some key clients to gather feedback on the prototype? Your insights from both internal teams and external customers will be crucial in refining our product before launch Internal → I'd like you to focus on updating the technical specifications based on our internal testing results. Please work within your team to ensure all documentation is accurate and up-to-date Communication horizontally across departments improves innovation, diversity of knowledge and lateral coordination Communicating horizontally across departments reduces focus and efficiency Chain of Command Who is resolving potential conflicts? Clarity in chain → Although our organization uses a matrix structure, for your upcoming assignments, I'd like you to report directly to me only. I'll coordinate with the project managers on your behalf to streamline communication and decision-making. This way, you'll have a clear line of authority, and we can avoid any potential confusion. Lack of clarity in chain → Given our matrix structure, you'll be reporting to both me as your functional manager and to Alex, the project manager for the XYZ initiative. Please ensure that you keep both of us updated on your progress. For any functional issues, consult with me, and for project-specific decisions, coordinate with Alex. It's important to manage both lines of communication effectively Clarity in whom to report improves coordination, progress and efficiency (profitability increase) Advanced Strategic Man. 46  Clarity in whom to report reduces the effectiveness of matrix structure due to focus on one boss than the other (lack of effectiveness) → choices have to fit together, same strategic purpose Orga Summary Advanced Strategic Man. 47