Unit 2 Strategy AY2024-25 PDF

MGT1005 Unit 2a Strategy (On-Campus Lecture) AY2024-25 Dr Peter Keenan Adam Smith Business School University of Glasgow  Unit 2 Unit 2a Unit 2b Conceptualizing strategy...

MGT1005 Unit 2a Strategy (On-Campus Lecture) AY2024-25 Dr Peter Keenan Adam Smith Business School University of Glasgow  Unit 2 Unit 2a Unit 2b Conceptualizing strategy Strategy & Stakeholder Management Understanding strategic purpose (‘Live’ lecture on campus) 1. WATCH 'Central tenets of stakeholder theory' (2m 57secs), 'BBC2: Turkey: Empire of Erdogen (11m 08 secs) 2. READ Bridoux, F., & Stoelhorst, J. (2022). Stakeholder theory, strategy, and organization: Past, present, and future. Strategic Organization, 20(4), 797-809. 3. DO the 5 practice MCQ's (on MS Forms on Moodle)  Unit 2 Themes Conceptualising strategy What do we mean by ‘strategic purpose’? How can we identify strategic purpose through words and action? Do organizations always successfully fulfil their strategic purpose?  Unit 2 ILO’s 1) Critically discuss the nature of management 2) Describe a range of key concepts and theories related to the different areas of strategy, entrepreneurship, marketing, international business, operations management and organisational behaviour 3) Demonstrate understanding of these by drawing on evidence from various business context and examples 4) Evaluate and synthesise competing concepts and theories by drawing on reasoned explanations and conclusions  What is strategy? “Strategy is the long-term direction of an organisation….and can include both deliberate, logical strategy and more incremental, emergent patterns of strategy. Because strategy typically involves managing people, relationships, and resources...managing is always important to strategy. Good strategy is about the practicalities of managing as well as the analysis of strategizing.” (Johnson et al, 2017: pp4-7) “Strategy is the craft of collectively rising to a significant challenge and accomplishing more than might be reasonably expected as a result of self-knowledge, resolve, foresight, creativity and genuine capabilities cultivated over the medium to long term.” (MacIntosh et al, 2023: p3) “Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. (Chandler, 1962: p15)  Deliberate (rational-analytic) versus emergent (learning) strategy Source: Mintzberg, H. & Waters, J.A. (1985) Of strategies deliberate and emergent. Strategic Management Journal, Vol.6, No.3 (Jul-Sep), pp257-272  Strategy characteristics (Johnson et al, 2017:16) Rational-analytic view Emergent-learning view Precise intentions, articulated with great There is an absence of precise intentions detail before taking action There must be order (consistency of action All people within the collective must agree over time) in an absence of intention The environment must be completely benign Strategies must be perfectly flexible and/or predictable to realize strategies Emerge out of opportunities precisely Often innovative Heavy emphasis on tools and techniques for Serendipity and luck analysis Logical ‘top-down’ goals cascaded down throughout the organization  Case examples Rational-analytic Emergent-learning Bank of England setting interest IKEA’s flat-packing approach to selling rates furniture and homeware (+) License-seeking for exploration work Decca Records rejecting the signing of in the North Sea by oil companies The Beatles in 1962 (-) Awarding take-off and landing slots Westminster Government’s handling of to airlines at Glasgow Airport the COVID-19 pandemic in 2020(?)  Strategy without a plan “Without guidance, individuals do the things they think are important, often resulting in uncoordinated, divergent, conflicting decisions and actions. Without the benefit of a logical approach, execution suffers or fails because managers don’t know what steps to take and when to take them. Having a model or roadmap positively affects execution success; not having one leads to execution failure and frustration.” (Hrebiniak, 2006:17)  Strategy (over) emphasizing planning and little (or no) learning Plans by their very nature are designed to promote inflexibility Planning can undermine commitment to strategy making Plans bureaucratize the strategy process Planning can act as a ‘control tool’ rather than a ‘facilitating tool’ Implementation needs to [iteratively] inform formulation BBC2 State of Chaos (Sep.23)  Strategy: perhaps a wee bit of both planning and learning? ‘ ‘Virtually all real-world strategies have umbrella characteristics….as in no organization can the central leadership totally pre-empt the discretion of others, and in none does the central leadership defer totally to others’ (Mintzberg & Water’s, 1985: p263). Source: Mintzberg, H. & Waters, J.A. (1985) Of strategies deliberate and emergent. Strategic Management Journal, Vol.6, No.3 (Jul-Sep), pp257-272 Karl Weick (1995) on plans Q. What does Weick's narrative tell us about the concept of a plan?  Defining strategic purpose “…is an affirmation of the reason for the “Purpose is concerned with the value organization’s existence. Their activities an organization seeks to create for its are often articulated in forward-looking stakeholders, potentially including both statements about the organization’s financial land and non-financial activities.” partners.” (Mackay et al, 2020:121) (Whittington et al, 2023:157)  Understanding strategic purpose It should address two questions: How do organizations define their strategic purpose? 1. How does the organisation make a difference? 1) A mission statement 2) A vision statement 2. And for whom does the organisation 3) Statement of corporate values. make that difference? 4) Objectives (Montgomery, 2008) (Johnson et al, 2017)  Profit v Purpose (1) “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as its stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” Milton Friedman (1970) – New York Times.  Profit v Purpose (2) “We have a catchphrase [at Factory Records] which is, ‘We didn’t make money, me made history’. I suppose I would rather have made history.” Anthony Wilson, Founder of Factory Records and The Hacienda, Manchester. Source: The Guardian (October 2000)  John Lewis Partnership: ‘A Partnership with Purpose’. “As co-owners we all have a share in the business and a shared commitment to go above and beyond for each other and our customers. We have a unifying Purpose created by Partners, for Partners. Our Purpose makes it clear why we exist - our ultimate aim as a business - and gives us an exciting opportunity to do things differently.” Sourced: 07/09/23  Strategic purpose: can it change over time? Port Authority of New York & New Jersey Strategic purpose can be linked to ‘organisational identity’ How did their purpose evolve and come to be re-evaluated? (Dutton & Dukerich,1991) Maintaining strategic purpose over time Glasgow Celtic FC (1887-2024)  Critically evaluating strategic purpose Corporate Social Responsibility (CSR) What is the Business & Management research telling us about CSR? Does it work in practice? The relevance of Corporate Governance in relation to Strategy? What is the Business Management research telling us? i.e. Do all organizations abide by Corporate Governance?  Unit 2a Summary Conceptualising strategy What do we mean by ‘strategic purpose’? How can we identify strategic purpose through words and action? Do organizations always successfully fulfil their strategic purpose?  Unit 2a ILO's Summary 1) Critically discuss the nature of management 2) Describe a range of key concepts and theories related to the different areas of strategy, entrepreneurship, marketing, international business, operations management and organisational behaviour 3) Demonstrate understanding of these by drawing on evidence from various business context and examples 4) Evaluate and synthesise competing concepts and theories by drawing on reasoned explanations and conclusions  Unit 2a References 1. BBC2 (2023) State of Chaos, 27th Sep. 2. Chandler, A. (1962) Strategy and structure. Cambridge Publishing. 3. Clegg, S., Sweitzer J., Whittle, A. & Pitelis, C. (2019) Strategy: theory and practice. Sage Publications. 4. Dutton, J.E. & Dukerich, J.M. (1991) Keeping an eye on the mirror: image and identity in organization adaptation. Academy of Management Journal, Vol. 34, No.3, pp517-554 5. Friedman, M. (1970) The purpose of business is to increase its profits. New York Times Magazine, September, 13, pp122-126. 6. Hrebiniak, L.G. (2006) Obstacles to effective strategy implementation. Organizational Dynamics, 35(1), p12-31. 7. Mintzberg, H. (1994) The rise and fall of strategic planning. FT Prentice-Hall. 8. Mintzberg, H. & Waters, J.A. (1985) Of strategies deliberate and emergent. Strategic Management Journal, Vol.6, No.3 (Jul-Sep), pp257-272 9. John Lewis Partnership (2023) https://www.johnlewispartnership.co.uk/purpose.html 10. Johnson, G., Whittington, R. Scholes, K., Angwin, D. & Regner, P. (2017) Chapter 1: Introducing strategy, pp2-27. In Exploring strategy: text and cases. 11th Edition, Pearson Education Ltd. 11. MacIntosh, R., MacLean, D. & Robinson, (2023) Strategic management: strategists at work. Bloomsbury Academic Publishing 12. Mackay, B., Arevuo, M. Mackay, D. & Meadows, M. (2020) Strategy: theory, practice, and implementation. Oxford University Press. 13. Montgomery, C. A. (2008) Putting leadership back into strategy. Harvard Business Review, 88(1), pp31-39. 14. Weick, K. (1995) Sensemaking in organizations. Sage Publications. 15. Whittington, R., Angwin, D. Regner, P., Johnson, G. & Scholes, K. (2023) Exploring Strategy: Text & Cases. 13 th Edition, Pearson Education.  Unit 2 Off-campus activity Unit 2a Unit 2b Conceptualizing strategy Strategy & Stakeholder Management Understanding strategic purpose (‘Live’ lecture on campus) 1. WATCH 'Central tenets of stakeholder theory' (2m 57secs), 'BBC2: Turkey: Empire of Erdogen (11m 08 secs) 2. READ Bridoux, F., & Stoelhorst, J. (2022). Stakeholder theory, strategy, and organization: Past, present, and future. Strategic Organization, 20(4), 797-809. 3. DO the 5 practice MCQ's (on MS Forms on Moodle) UoG Student Support  Thank You Dr Peter Keenan Adam Smith Business School University of Glasgow