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Strategy: an overview. Jonny Holmström Web: jonnyholmstrom.com Email: [email protected] Twitter: jonnyholmstrom. IT Management Group. www.itmanagementgroup.se. Outline. Definitions Forms of Strategy Coherence in Strategic Direction - PowerPoint PPT Presentation
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Strategy: an overviewStrategy: an overview
Jonny Holmström
Web: jonnyholmstrom.com
Email: [email protected]
Twitter: jonnyholmstrom
IT Management GroupIT Management Group
www.itmanagementgroup.se
OutlineOutline
Definitions
Forms of Strategy
Coherence in Strategic Direction
Information Systems Vs Information Technology
The importance of vision/mission
The organizational context for strategies: Mintzberg’s structure in fives
““Strategies are both plans for the futureStrategies are both plans for the futureand patterns from the past”and patterns from the past”
- Henry Mintzberg- Henry Mintzberg
Definition of Strategy
A strategy is a plan of action designed to achieve a vision. It derives from the Greek "στρατηγία” (strategia), "office of general, command, generalship”
(Wikipedia).
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Aspects of Strategy
Statement of ends, purposes and intent High level plan Element of leadership Positioning for the future Building capability Fit between capabilities and opportunities Pattern of behaviour resulting from embedded culture
Strategic Management
• Strategic management is the study of why some firms outperform others
• How to create a competitive advantage in the market place that is unique, valuable, and difficult to copy
• “Total organization” perspective, integrating across functional areas
• Strategies put together an understanding of the external environment with an understanding of internal strengths and weaknesses
Definition of Strategic Management
Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages (Dess, Lumpkin, & Eisner, Strategic Management: Creating Competitive Advantage, 3rd Ed., p. 9).
Attributes of Strategic Management
• Directs the organization toward overall goals and objectives
• Includes multiple stakeholders in decision making.
• Needs to incorporate short-term and long-term perspectives
• Recognizes trade-offs between efficiency and effectiveness• Efficiency describes the extent to which time or effort is well
used for the intended task or purpose; Effectiveness is the capability of producing a desired result
Mintzberg’s Views of Strategy
• Plan - consciously intended course of action
• Ploy - maneuver to outwit opponent
• Pattern - consistency in behavior
• Position - location in environment
• Perspective - way of perceiving the world
Forms of Strategy
• Formal versus informal - associated with size of firm and stage of development
• Intended versus realized - intended strategies are the plans managers develop; realized strategies are the actions that actually take place over time
Forms of Strategy
Source:H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and Emergent,” Strategic Management Journal 6 (1985), pp. 257-72.
Hierarchy of Goals
Coherence in Strategic Direction
Company vision• Massively inspiring
• Overarching
• Long-term
• Driven by and evokes passion
• Fundamental statement of the organization’s• Values
• Aspiration
• Goals
Company visionCompany vision
Hierarchy of Goals
Company visionCompany vision
Coherence in Strategic Direction
Mission statements
• Purpose of the company
• Basis of competition and competitive advantages
• More specific than vision
• Focused on the means by which the firm will compete
Mission statementsMission statements
Hierarchy of Goals
Company visionCompany vision
Mission statementsMission statements
Coherence in Strategic Direction
Strategic objectives
• Operationalize the mission statement
• Measurable, specific, appropriate, realistic, timely, challenging, resolve conflicts that arise, and yardstick for rewards and incentives
Strategic objectivesStrategic objectives
Example: Coca Cola’s Vision and Mission
• Vision: ”The Coca-Cola Company exists to benefit and refresh
everyone it touches. The basic proposition of our business is simple,
solid, and timeless. When we bring refreshment, value, joy and fun to
our stakeholders, then we successfully nurture and protect our brands,
particularly Coca-Cola. That is the key to fulfilling our ultimate
obligation to provide consistently attractive returns to the owners of
our business.”
• Mission: “Everything we do is inspired by our enduring mission:• To Refresh the World… in body, mind, and spirit.
• To Inspire Moments of Optimism… through our brands and our actions.
• To Create Value and Make a Difference… everywhere we engage.”
INFORMATION TECHNOLOGY
Hardware
Software
Databases
Networks
Other related components
are used to buildINFORMATION SYSTEMS
Payroll System
Inventory System
Marketing System
Customer Service System
IS Vs ITIS Vs IT
IT vs IS StrategyIT vs IS Strategy
Carr (2003): IT doesn’t matter– Since everybody can buy the same technology
strategic advantages cannot be found in having IT in the organization
IS matter!– Merely having IT is not enough; what matters
is what you do with it
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Mintzberg’s ‘Structure in fives’: An Mintzberg’s ‘Structure in fives’: An organisation has five main partsorganisation has five main parts
1. Strategic apex
2. Middle line
3. Support staff
4. Technostructure
5. Operating core
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Five main configurationsFive main configurations Mintzberg proposes five main configurations, or kinds of
organisations These are contexts where strategies are played out!
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Simple structureSimple structure A small shop A new agency A start-up company led by
a very dominant person
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Machine bureaucracyMachine bureaucracy A traditional airline A paper and pulp factory
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Professional bureaucracyProfessional bureaucracy University Hospital
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Divisional formDivisional form A major corporation Umeå municipality
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AdhocracyAdhocracy A project based consulting
or R&D company Some highly innovative
companies or agencies (e.g. North Kingdom)
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When analyzing strategies in When analyzing strategies in organizationsorganizations
We will meet mixed configurations Thus, in your project, in the two seminars, and in the essay
assignments: you may see cases that tend to confirm, falsify or call for elaboration of Mintzberg’s five types
When analyzing IT strategies in organizations When analyzing IT strategies in organizations (Peppard et al., 2014)(Peppard et al., 2014)