Poster 6: Strategy in action
Module 6: Strategy in action
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BM22 Strategic Management · Module 6

Strategy in action

Erasmus RSM

Stakeholders and CSR

  • Purpose = value for stakeholders; must fit the culture.
  • Power/attention-matrix: key players (cultivate support), sleeping giants (keep satisfied), gadflies (information provision), rest minimal effort. It is attention, not interest. Positions differ per issue.
  • CSR: above the legal minimum. Stances: laissez-faire, enlightened self-interest, forum for stakeholder interaction, shaper of society. Place on behaviour, not on words.

Culture

  • Schein: values, beliefs, behaviours, assumptions. The deeper, the stickier.
  • Cultural web: paradigm plus stories, symbols, rituals & routines, power structures, organisational structures, control systems.
  • Identity (insiders), image (outsiders), culture (what really happens).
  • Strategic drift: incremental change, strategic drift, flux, transformation or death. Causes: uncertainty, lock-in/core rigidities, cultural entrenchment, powerful people.

People

  • Creative destruction (Schumpeter): creating something new destroys something old. A founder is not automatically an entrepreneur.
  • Agency problem: manager is not owner. Principal-principal: large versus small shareholders.
  • Adverse selection = before contract (screening, signalling, due diligence). Moral hazard = after contract (monitoring, incentives).
  • Corporate governance: board/supervisory board, shares and bonus.
  • Leadership: top (envisioning, aligning, embodying), middle (champions, sense makers, adapters). Transformational = soft levers, transactional = hard levers.
  • Barnard's zone of indifference: what an employee does without objection.

Structure

  • Chandler: structure follows strategy, and vice versa. Structure follows complexity.
  • Growth path: simple structure, leadership crisis, functional structure, autonomy crisis, divisional structure (M-form), matrix (two bosses).
  • Coordination: standardisation of work, skills, output.
  • Goold & Campbell: planning influence versus business unit accountability: strategic planning, financial control, strategic control.

Evaluating and changing

  • Gap analysis: three dimensions (product markets, accounting profitability, market measures) and three comparisons (targets, trends, comparable organisations).
  • SAFE: Suitability, Acceptability (Risk, Return, stakeholder Reactions), Feasibility. If one fails, do not do it.
  • Forcefield-analyse (forcefield analysis): negative balance, first strengthen the forces for change.
  • Culture change: 4 R's (recruitment, retraining, reward, reinforcement).
  • Sensemaking: fracturing, differentiated understanding, mutual adjustment. Communication is not the same as understanding.
  • Procedural justice: the three E's: Engagement, Explanation, clarity of Expectations. Distributive justice: equality or equity.
  • Kotter: urgency, coalition, vision, communicate, empower, short-term wins, consolidate, institutionalise.

Pitfalls

A founder is not an entrepreneur. Adverse selection is not moral hazard. Agency is not principal-principal. Identity, image and culture differ. Drift is not doing nothing. Laissez-faire is not unethical. Planning is not financial control. When in doubt: do not translate.

Key terms (never translate)

purposestakeholderspower/attention-matrixkey playerssleeping giantsgadfliesCSRlaissez-faireenlightened self-interestforum for stakeholder interactionshaper of societyorganisational culturecultural webstrategic driftimprinting theorycreative destructionentrepreneuragency problemcollective actionprincipal-principaladverse selectionmoral hazardcorporate governancezone of indifferencegap analysisSAFEforcefield-analysedivisional structurematrixstrategic planningfinancial controlsensemakingprocedural justicedistributive justiceKotter

Everything