Lecture 1 – Introduction
This course will be about strategy formation and strategic management. We will focus
on the different perspectives of how strategy is formed in organizations. We are
going to look at ten school of thoughts, every lecture we will discuss one school of
thought.
Prescriptive schools = how strategy should be made, rules and how to use it
Descriptive schools = how strategy is made
Little black dress = strategy that fits all
Lecture 2 – Design school
Strategy
What is strategy? 5P’s:
Plan (consciously intended direction, guide, or course of action to move from a
present state to a future state)
Ploy (a maneuver to outwit an opponent)
Pattern (recognizable similar actions that emerge (intended or unintended)
over time
Position (the organization’s location in the imaginary landscape of the
competitive environment)
Perspective (the interpretation of managers of the organization and its
environment)
Characteristics of design school
Design school: characteristics & premises:
Strategy formation as a deliberate process of conscious thought
One person develops strategy (CEO or Head of organization)
Process of strategy formation should be simple and informal
Strategies should be one of a kind: strategy developed to attain match or fit
between internal capabilities and external possibilities:
- SWOT analysis
- Environment needs to be taken into account, navigated through but not
interacted with
The strategy design process is complete when strategy appears fully
formulated as a perspective
This strategy is explicit
Implementation follows formulation and articulation
,Process
The strategist
Strategist: CEO / Head of organization
Tasks:
- Gather information
- Analyze information
- Organize information
- Formulate strategy
Structure follows strategy. Strategy determines long-term goals and objectives, the
course of action and allocation of resources. Structure is the design through which to
administer the strategy. Changes in organization’s strategy lead to problems that
require a new structure.
Assumptions
The CEO / head of organization has complete and perfect information
The CEP / head of organization has the mental and cognitive capacity to
accurately process all information
The environment can always be understood
Situations and environment are predictable
All information is documented and available
Strategy is centrally formulated
Criticism
Criticism and limitations of the design school:
Structure follows strategy (unrealistic for most organizations)
Assumption of universality
The capacity to learn is ignored by analytical assessment of environmental
and internal capabilities
Promotion of inflexibility (hierarchical, centralized, and explicit strategy
formulation)
Detachment of thinking from acting
CEO / head of organization is unlikely to have all and perfect information and
the capacity to process this information
Economic man / homo economicus = agent who has complete information
about the options available for choice, perfect foresight of the consequences
, from choosing those options, and the wherewithal to solve an optimization
problem that identifies an option which maximizes the agent’s personal utility
Bounded rationality = rationality is limited, and individuals make imperfect
decisions because of the difficulty of the problem, boundaries to cognitive
capability and limited time
Contributions
Contributions from the design school:
Vocabulary and tools
Grand strategy
Basic notion (fit between external environment and internal capabilities)
Started to promote the relevance of strategy in organizations and as a field of
research
Marketing myopia = only seeing yourself as just selling product, not satisfying need
Marketing hyperopia = worrying about future so much, not focused on selling now
Marketing macropia = overly broad view of your industry, trying too hard
Summarize:
Lecture 3 – Planning school
Planning school = strategy formation as a formal process
Summary:
Full-blown, detailed, and explicit strategies are formulated
Hierarchy of plans: objective setting formulation of plans implementation
CEO / head of organization is responsible for overall process, staff planners
are responsible for execution
Clear focus on the future; scenario thinking; real options
Planning = the establishment of goals, policies, and procedures for a social or
economic unit
In strategy this means a formalized procedure to produce articulated results by using
an integrated system of decisions.
Characteristics and premises
This course will be about strategy formation and strategic management. We will focus
on the different perspectives of how strategy is formed in organizations. We are
going to look at ten school of thoughts, every lecture we will discuss one school of
thought.
Prescriptive schools = how strategy should be made, rules and how to use it
Descriptive schools = how strategy is made
Little black dress = strategy that fits all
Lecture 2 – Design school
Strategy
What is strategy? 5P’s:
Plan (consciously intended direction, guide, or course of action to move from a
present state to a future state)
Ploy (a maneuver to outwit an opponent)
Pattern (recognizable similar actions that emerge (intended or unintended)
over time
Position (the organization’s location in the imaginary landscape of the
competitive environment)
Perspective (the interpretation of managers of the organization and its
environment)
Characteristics of design school
Design school: characteristics & premises:
Strategy formation as a deliberate process of conscious thought
One person develops strategy (CEO or Head of organization)
Process of strategy formation should be simple and informal
Strategies should be one of a kind: strategy developed to attain match or fit
between internal capabilities and external possibilities:
- SWOT analysis
- Environment needs to be taken into account, navigated through but not
interacted with
The strategy design process is complete when strategy appears fully
formulated as a perspective
This strategy is explicit
Implementation follows formulation and articulation
,Process
The strategist
Strategist: CEO / Head of organization
Tasks:
- Gather information
- Analyze information
- Organize information
- Formulate strategy
Structure follows strategy. Strategy determines long-term goals and objectives, the
course of action and allocation of resources. Structure is the design through which to
administer the strategy. Changes in organization’s strategy lead to problems that
require a new structure.
Assumptions
The CEO / head of organization has complete and perfect information
The CEP / head of organization has the mental and cognitive capacity to
accurately process all information
The environment can always be understood
Situations and environment are predictable
All information is documented and available
Strategy is centrally formulated
Criticism
Criticism and limitations of the design school:
Structure follows strategy (unrealistic for most organizations)
Assumption of universality
The capacity to learn is ignored by analytical assessment of environmental
and internal capabilities
Promotion of inflexibility (hierarchical, centralized, and explicit strategy
formulation)
Detachment of thinking from acting
CEO / head of organization is unlikely to have all and perfect information and
the capacity to process this information
Economic man / homo economicus = agent who has complete information
about the options available for choice, perfect foresight of the consequences
, from choosing those options, and the wherewithal to solve an optimization
problem that identifies an option which maximizes the agent’s personal utility
Bounded rationality = rationality is limited, and individuals make imperfect
decisions because of the difficulty of the problem, boundaries to cognitive
capability and limited time
Contributions
Contributions from the design school:
Vocabulary and tools
Grand strategy
Basic notion (fit between external environment and internal capabilities)
Started to promote the relevance of strategy in organizations and as a field of
research
Marketing myopia = only seeing yourself as just selling product, not satisfying need
Marketing hyperopia = worrying about future so much, not focused on selling now
Marketing macropia = overly broad view of your industry, trying too hard
Summarize:
Lecture 3 – Planning school
Planning school = strategy formation as a formal process
Summary:
Full-blown, detailed, and explicit strategies are formulated
Hierarchy of plans: objective setting formulation of plans implementation
CEO / head of organization is responsible for overall process, staff planners
are responsible for execution
Clear focus on the future; scenario thinking; real options
Planning = the establishment of goals, policies, and procedures for a social or
economic unit
In strategy this means a formalized procedure to produce articulated results by using
an integrated system of decisions.
Characteristics and premises
