Strategy in action - explained simply
Key concepts (9)
What is module 6 about?
In modules 1 to 5 you chose a strategy. Module 6 asks: does that strategy actually happen? Strategies fail more often through poor execution than through a bad idea. Reus explains three things that determine execution: people, structure and culture and systems.
Purpose and stakeholders
Purpose is the value an organisation wants to create for its stakeholders, financial and non-financial. Stakeholders are people and groups who depend on you and on whom you depend. There are five types: economic, social/political, technological, community and internal.
Not every stakeholder is equally important. For that there is the power/attention-matrix:
- Key players (high power, high attention): cultivate support.
- Sleeping giants (high power, low attention): keep them satisfied.
- Gadflies (low power, high attention): provide information. They can wake up a sleeping giant.
- Low power and low attention: minimal effort.
Positions differ per issue. BlackRock is a key player on sustainability, but perhaps not on other issues.
CSR: four stances
CSR starts above the legal minimum. The four stances, from weak to strong:
- Laissez-faire: comply with the law and make a profit.
- Enlightened self-interest: responsible behaviour is good for business (Larry Fink on diversity).
- Forum for stakeholder interaction: you accept that profit sometimes suffers.
- Shaper of society: you want to change society.
Place a company on what it does, not on what it says. Rio Tinto had fine values, but acted laissez-faire.
Culture
Organisational culture is the taken-for-granted assumptions and behaviours in an organisation. Schein describes four layers, from visible to invisible: values, beliefs, behaviours and assumptions. The deeper, the stickier. According to Reus, culture is the informal twin of structure. The cultural web shows what keeps the culture in place: stories, symbols, rituals and routines, power structures, organisational structures and control systems, around the paradigm.
A culture that does not move along causes strategic drift: changing too slowly while the environment speeds up. It runs in four phases: incremental change, strategic drift, flux, and then transformation or death. Nokia died, Microsoft transformed.
People
- Founders leave an imprint (imprinting theory).
- A founder is not always an entrepreneur. According to Schumpeter, an entrepreneur destroys something old by creating something new: creative destruction. A pizza baker who does the same as the rest is a founder, not an entrepreneur.
- Owner and manager are not the same person in larger firms. That gives the agency problem: the manager has own interests. There are two variants. Adverse selection is before the contract: the agent knows more than you. You screen. Moral hazard is after the contract: the agent behaves differently. You monitor and give incentives.
- Corporate governance is the set of rules that make managers do what is good for the owners: a supervisory board and pay.
- Top managers set the vision, design the organisation and set the example themselves. Middle managers are champions, sense makers and adapters.
Structure
Structure follows strategy and strategy follows structure, like the legs of an ostrich. Structure is about complexity. The growth path:
- Simple structure: the owner does everything. Crisis: leadership.
- Functional structure: managers per function. Crisis: autonomy.
- Divisional structure (M-form): per region or product. Danger: knowledge stays put, duplication, fights over money.
- Matrix: two bosses. Danger: loyalty conflicts and costs.
Evaluating and changing
With gap analysis you see how far performance is from the goal. SAFE tests a new strategy: Suitable, Acceptable (risk, return, reactions), Feasible. The forcefield-analyse (forcefield analysis) lists forces for and against change. If the balance is negative, first strengthen the forces for change.
Soft implementation is about people. Communication is not understanding: people make their own meaning (sensemaking). A fair process helps (procedural justice, with three E’s: engagement, explanation and clarity of expectations). Kotter’s eight steps give the order, starting with urgency.
What do you take away?
Can you place a company on the power/attention-matrix, determine a CSR stance, choose the right structure and follow Kotter’s order? Then module 6 is done.
Strategy in action - exam level
Key concepts (15)
Exam question types from the 2022 sample exam, question 6: explain creative destruction (5p, 20 words) and assess whether a wide or narrow zone of indifference fits (5p); the marking model rewards a wide zone. Write full sentences, use the English technical terms and do not translate them.
Purpose, stakeholders and the power/attention-matrix
Definition. Purpose is the value an organisation creates for its stakeholders, financial and non-financial, and must be consistent with the culture. Freeman: stakeholders and organisation are mutually dependent. Five types: economic, social/political, technological, community/society and internal.
| Quadrant | Power | Attention | Approach |
|---|---|---|---|
| A key players | high | high | cultivate support |
| B sleeping giants | high | low | keep satisfied |
| C gadflies | low | high | information provision |
| D | low | low | minimal effort |
Applying. Determine per issue the position of each stakeholder. Petrobras: the truckers were a sleeping giant that woke up.
Pitfall. The axis is called attention, not interest. Positions differ per issue, and a gadfly can wake a sleeping giant. Mission, vision and objectives must be aligned.
CSR and the four stances
Definition. CSR is the commitment of organisations to behave ethically and contribute to economic development, with attention to workforce, community and society, above the legal minimum.
| Stance | Rationale | Leadership | Mode | Relation |
|---|---|---|---|---|
| laissez-faire | comply with the law | peripheral | defensive | unilateral |
| enlightened self-interest | sound business sense | supportive | reactive | interactive |
| forum for stakeholder interaction | triple bottom line | champion | proactive | partnership |
| shaper of society | societal change | visionary | defining | multi-organisation alliances |
Applying. Place the organisation on what it does, not on what it says: Rio Tinto (Juukan Gorge) is laissez-faire, BlackRock under Fink is enlightened self-interest.
Pitfall. Laissez-faire is not the same as unethical: the company keeps to the law.
Networks and legitimacy
Organisations are networks. Granovetter: the strength of weak ties. Global networks are vulnerable, hence stakeholder due diligence is needed. Subsidiaries have internal and external legitimacy (Bartlett & Ghoshal 1990).
Schein and the cultural web
Definition. Organisational culture is the taken-for-granted assumptions and behaviours. Schein has four layers: values, beliefs, behaviours, assumptions. The deeper the layer, the stickier. Subcultures can exist.
The cultural web has the paradigm in the middle, surrounded by stories, symbols, rituals & routines, power structures, organisational structures and control systems (Huawei wolves).
Identity is how insiders see the organisation, image how outsiders see it. Culture is what really happens. Merck, Carlsberg and WeWork are examples of organisational identity in the book, not of culture.
Pitfall. Identity, image and culture are three different concepts. Reus: culture is the informal twin of structure, and Schein sees two functions: external adaptation and internal integration.
Strategic drift
Definition. Strategic drift is the emergence of a gap because the organisation changes more slowly than its environment. Four phases: incremental change, strategic drift, flux, transformation or death (Nokia versus Microsoft under Nadella).
Four causes: uncertainty, lock-in/core rigidities, cultural entrenchment and powerful people (Kodak).
Pitfall. Drift is not doing nothing: the organisation does change, but too little and too slowly.
Founders and creative destruction
Imprinting theory: founders leave their mark on the organisation. A founder is not automatically an entrepreneur. Schumpeter: creative destruction is “a process of industrial mutation that continuously revolutionizes the economic structure from within”. The entrepreneur creates something new and thereby destroys something old. A pizza baker who does the same as his competitors is a founder, not an entrepreneur.
Examples: the music industry (gramophone, cd, Apple mp3), Netflix, Uber, Wikipedia, Booking.com.
Entrepreneurship has three elements: the entrepreneur (or team), the environment (trends and marketplace gaps) and resources and capabilities. Six steps: opportunity recognition, feasibility, business plan, industry analysis, business model/strategy and financing. The process is iterative (pivoting, Starbucks). Forms of enterprise: sole proprietorship, partnership/VOF, BV, NV and public.
Model answer (20 words). “Creative destruction is the process in which an entrepreneur, by creating something new, at the same time destroys existing firms or products, like the mp3 did to the cd.”
Agency and corporate governance
Definition. In the agency problem (principal-agent) the manager as agent does not act in the interest of the owner, for example through empire building. The collective action problem arises with fragmented owners. In the principal-principal problem large and small shareholders clash.
| Adverse selection | Moral hazard | |
|---|---|---|
| Moment | before the contract (pre-contract) | after the contract (post-contract) |
| Problem | agent knows more about his quality or intentions | agent behaves differently |
| Remedy | screening, signalling, due diligence | monitoring, incentives |
Applying. Car mechanic: the seller knows more about the car than you do (adverse selection), or he works more sloppily after the sale (moral hazard). Corporate governance (board/supervisory board, shares and bonus) limits these problems.
Pitfall. Do not confuse adverse selection with moral hazard: it is about the moment. Agency is also something other than principal-principal.
Leadership and Barnard’s zone of indifference
Top: envisioning, aligning, embodying. Middle: champions, sense makers, adapters. Entrepreneurial: opportunity spotter, resource marshaller, risk taker. Styles: transformational (soft levers), transactional (hard levers) and situational (continuum).
Barnard’s zone of indifference is the range of instructions that an employee carries out without objection. A wide zone fits trust, clear interests and a strong culture; a narrow zone means the employee tests every instruction critically. Exam answer (marking model of the 2022 sample exam, 5p): a wide zone of indifference, because people then accept many different requests and orders without asking questions. Support this with evidence from the case.
Performance evaluation and gap analysis
Three dimensions: product markets, accounting profitability, market measures. Three comparisons: targets, trends and comparable organisations. Gap analysis compares desired and actual performance.
SAFE and the forcefield-analyse
SAFE tests strategic options:
- Suitability: does the option fit the gap and the situation (gap analysis, SWOT)?
- Acceptability: the 3 R’s: Risk, Return and stakeholder Reactions.
- Feasibility: financial, people and skills, and the change context (forcefield).
If one component fails, you do not do it.
Forcefield-analyse (forcefield analysis): weigh forces for and against change. If the balance is negative, first strengthen the forces for change.
Pitfall. Return is only a part of acceptability. A financially strong option can fail on stakeholder Reactions.
Structure and growth path
Chandler: structure follows strategy. The reverse also holds (ostrich). Structure follows complexity: internal for coordination, external for customers, markets and countries.
| Phase | Structure | Crisis or disadvantage |
|---|---|---|
| 1 | simple structure | leadership crisis |
| 2 | functional structure | autonomy crisis |
| 3 | divisional structure (M-form) | knowledge not shared, duplication, fights over resources, holding |
| 4 | matrix | two bosses, loyalty, contradictory demands, expensive |
The book also mentions the agile team. Coordination mechanisms: standardisation of work (kitchen), skills (R&D) and output (sales).
Goold & Campbell and KPIs
Goold & Campbell distinguish strategy styles on two axes: planning influence and business unit accountability. Three styles: strategic planning, financial control and strategic control. The diagonal is consistent. High central influence with strict accountability is unfair. KPI problems: inappropriate measures and inappropriate target levels.
Pitfall. Planning and financial control are different styles.
Soft implementation
- Culture change in five steps with the 4 R’s: recruitment, retraining, reward, reinforcement. Cultures are sticky.
- Sensemaking (Balogun & Johnson): fracturing, differentiated understanding, mutual adjustment. Communication is not the same as understanding: implementation is the strategy.
- Procedural justice (fair process) with the three E’s: Engagement, Explanation and clarity of Expectations. Distributive justice is about the outcome: equality or equity. Haspeslagh & Jemison: justification and voice.
Pitfall. Procedural and distributive justice are different.
Kotter
Eight steps: urgency, coalition, vision, communicate, empower, short-term wins, consolidate, institutionalise. At the Festival d’Aix-en-Provence urgency was weak until COVID, a coalition of Audi and Vienne emerged (the middle manager as sense maker and adapter), short-term wins followed (donations 20 percent of revenues in 2019, 25 in 2021 and 31 expected in 2022) and an extension to 2027.
Exam help
- Always name the model, apply it to the case and give a judgement.
- For BlackRock: economic stakeholder with social values, purpose “financial well-being”, Fink calls the culture “not perfect”.
- When in doubt: do not translate.
Strategy in action - as the lecturer says it
Key concepts (10)
The lecturer of module 6 is Taco Reus. For this module there is no lecture transcript. The quotes come from his video lectures 6.1 to 6.3 and from the slides. They stay in Dutch, exactly as spoken, and each has an English note. The speaker of the videos is inferred from the module structure. The transcripts are automatic, so errors in words (such as “strijsvogel” for struisvogel and “tweelingsbordje”) are kept literally. An explicit exam hint is missing. The best signal is what the videos and slides emphasise, together with question 6 of the 2022 sample exam (creative destruction and zone of indifference).
Strategy in action: people, structure and culture
Gezegd door Taco Reus in Video 6.1, minuut 00:00:
Om strategie in actie te krijgen moeten we rekening houden met mensen, organisatiestructuren of culturen.
In English: to get strategy into action we must take people, organisational structures or cultures into account. This is the common thread of the module.
Founders and imprinting theory
Gezegd door Taco Reus in Video 6.1, minuut 02:03:
Imprinting Theory gaat over dit effect van oprichters.
In English: imprinting theory is about this effect of founders, the lasting mark a founder leaves on the organisation.
A founder is not an entrepreneur
Gezegd door Taco Reus in Video 6.1, minuut 03:05:
Hij legde uit dat je als je een bedrijf opricht niet automatisch een entrepreneur bent.
In English: he explained that founding a company does not automatically make you an entrepreneur.
Gezegd door Taco Reus in Video 6.1, minuut 03:05:
Het idee is dat ondernemers door iets nieuws te creëren tegelijkertijd iets ouds kapot maken.
In English: entrepreneurs destroy something old by creating something new. This is the core of creative destruction (Schumpeter) and it is also on the sample exam.
Gezegd door Taco Reus in Video 6.1, minuut 05:09:
Dan is zij volgens Schumpeter wel een oprichter, maar niet per se een entrepreneur.
In English: according to Schumpeter she is a founder, but not necessarily an entrepreneur.
Dia 6 uit Slides - MIM-P Module 6 Clip slides 2026:
process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one
Agency: collective action, principal-principal, adverse selection and moral hazard
Gezegd door Taco Reus in Video 6.2, minuut 02:07:
Dat noemen we ook wel het collective action probleem.
In English: we also call that the collective action problem.
Gezegd door Taco Reus in Video 6.2, minuut 03:10:
Dat noem je dan het principal-principal probleem.
In English: you call that the principal-principal problem.
Gezegd door Taco Reus in Video 6.2, minuut 03:10:
Bij adverse selection weet de agent meer over wat hij kan of wil dan jij, en gebruikt hij dat in zijn voordeel als afspraken gemaakt moeten worden.
In English: with adverse selection the agent knows more about what he can or wants than you, and uses it to his advantage when agreements are made. Adverse selection therefore happens before the contract.
Gezegd door Taco Reus in Video 6.2, minuut 04:18:
Bij moral hazard, gaat de agent zich anders gedragen zodra het contract getekend is.
In English: with moral hazard the agent behaves differently once the contract is signed. Moral hazard happens after the contract.
Gezegd door Taco Reus in Video 6.2, minuut 04:18:
Daarom heb je corporate governance.
In English: that is why you have corporate governance.
Gezegd door Taco Reus in Video 6.2, minuut 05:24:
Die raad houdt de topmanagers in de gaten en kan ze zo nodig vervangen.
In English: that board watches the top managers and can replace them if necessary.
Structure and growth path
Gezegd door Taco Reus in Video 6.3, minuut 00:00:
Structuur volgt strategie en strategie volgt structuur. Zoals de benen van een strijsvogel elkaar volgen.
“Strijsvogel” is an ASR error for struisvogel (ostrich). The message: the relation runs both ways.
Gezegd door Taco Reus in Video 6.3, minuut 01:02:
Als een structuur niet goed past bij de complexiteit waar het bedrijf mee kampt, dan lopen de kosten snel op.
In English: if a structure does not fit the complexity the company faces, costs rise quickly.
Gezegd door Taco Reus in Video 6.3, minuut 02:04:
Dat noemen we dan een leiderschapscrisis.
In English: we call that a leadership crisis.
Gezegd door Taco Reus in Video 6.3, minuut 05:15:
Dit kan leiden tot een zogenaamde autonomiecrisis.
In English: this can lead to a so-called autonomy crisis.
Gezegd door Taco Reus in Video 6.3, minuut 06:16:
Bovendien kan deze structuur leiden tot duplicatie.
In English: moreover this structure can lead to duplication.
Gezegd door Taco Reus in Video 6.3, minuut 07:18:
Als gevolg van deze dubbele chain of command, hebben werknemers dan twee bazen.
In English: because of this double chain of command, employees have two bosses. This is the disadvantage of the matrix.
Dia 17 uit Slides - MIM-P Module 6 Clip slides 2026:
Interne complexiteit
In English: internal complexity.
Culture as the informal twin of structure
Gezegd door Taco Reus in Video 6.3, minuut 08:21:
Organisatie cultuur kun je dan zien als het informele tweelingsbordje van structuur.
In English: the culture of an organisation can be seen as the informal twin of structure.
Gezegd door Taco Reus in Video 6.3, minuut 08:21:
Namelijk zich aanpassen aan de buitenwereld, en intern goed samenwerken.
In English: namely adapting to the outside world and cooperating well internally. These are the two functions of culture according to Schein: external adaptation and internal integration.
Gezegd door Taco Reus in Video 6.3, minuut 09:27:
Over Microsoft ging het verhaal bijvoorbeeld dat afdelingen als eilandjes waren die met elkaar concurreren.
In English: the story about Microsoft was that departments were islands competing with each other.
Slides from the lectures
Dia 14 uit Slides - MIM-P Module 6 Clip slides 2026:
Envisioning future strategy
Dia 17 uit PMIM Module 6 COLLEGE PPT 2026:
the commitment by organizations to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large
This is the CSR definition on the slides.
Dia 21 uit PMIM Module 6 COLLEGE PPT 2026:
Mensen letten van nature op rechtvaardigheid, in allerlei situaties
In English: people naturally pay attention to fairness, in all kinds of situations.
Dia 22 uit PMIM Module 6 COLLEGE PPT 2026:
Gelijkheid (equality)
In English: equality, a form of fairness of the outcome.