Introduction to the Dissertation

January 2009

Agenda

Course Structure Strategy Purpose Mission

FTMBA Strategic Management
Lecture 1:
Lecturer:
______________ 2011 MacKay

Vision Case Study Google Inc.

What is strategy? Purpose, Mission, Vision

Dr. Brad MacKay, Head, Strategy and International Business Group

Learning Outcomes

To begin defining what strategy is; To differentiate between corporate purpose, vision and mission; To develop an understanding of the differences and connection between strategy content, context and process. Strategy is the creation of a unique and valuable position involving a set of different activities.

Source: Porter, M. 1996. What is Strategy? Harvard Business Review. November-December

Strategy as patterns of decisions

Corporate Strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities.

So what is strategy?

The consultants and theorists jostling to advise businesses cannot even agree on the most basic of all questions: What precisely is a corporate strategy.

Source: Andrews, K. 1987. The concept of corporate strategy. Homewood: Irwin.

Source: The Economist. (1993). Eenie, meenie, minie, mo; business Strategy. March 20. p. 106

Introduction to the Dissertation

January 2009

To the Ancient Greeks

To the Ancient Chinese

Strategos An ancient Athenian position (508 BCE) Stratos Army spread out over ground Stratum and Agein To lead

[Strategic Planning is] the means by which all actions are coordinated and all resources allocated ~ Sun Tzu (2, 400 BCE) The Art of War -

Strategy as a plan
Military: [strategy is] drafting the plan of war shaping the individual campaigns and within these, deciding on the individual engagements ~ (Von Clauswitz 1976: 177); Game theory: a complete plan: a plan which specifies what choices [the player] will make in every possible situation ~ (von Newman and Morgenstern 1944: 79); Management: strategy is a unified, comprehensive, and integrated plan designed to ensure that the basic objectives of the enterprise are achieved ~ (Glueck 1980: 9).

Strategies
Strategies serve to structure, organize and give meaning to the complex operations of business organizations. They determine what is produced, where it is sold and how it is marketed, how resources are paid for and how they are allocated. They provide stability and direction, and help firms to cope with the uncertainties of the business environment. They shape the routines and discursive structures of an organization and, importantly, they are in turn shaped by these: strategies are recursively reproduced by the very practices they produce. On the other hand, the discourses of strategy and the role-definitions of strategists are very largely concerned with change. Strategy, for practitioners as well as academics, is explicitly concerned with the future, and with how this might differ from the present: with what should be rather than what is

Source: Hendry, J. and Seidl, D. (2003). The structure and significance of strategic episodes. Journal of Management Studies, 40, 1, p. 177.

Strategic management

Operational Effectiveness vs Strategy

Strategic management is a process that deals with the entrepreneurial work of the organization, with organizational renewal and growth, and more particularly, with developing and utilizing the strategy which is to guide the organizations operations

Seeking operational effectiveness through best practices such as benchmarking, TQM, outsourcing, partnering, reengineering, change management etc., is important, but not sufficient. Operational effectiveness is about doing similar things to other companies better = efficiency

Strategy is about delivering greater value to customers or comparable value at lower costs. It means being different choosing a different set of values to deliver a unique mix of value for the customer. Strategy is about how to establishing a difference that can be preserved over time = competitive advantage

Source: Schendel D. and Hofer, C. 1979. Strategic management: A new view of business policy and planning. Little Brown. p. 11.

Source: Porter, M. 1996. What is Strategy? Harvard Business Review. November-December

Introduction to the Dissertation

January 2009

Purpose

Corporate Purpose
Pixars Purpose: To combine proprietary technology and world-class creative talent to develop computeranimated feature films with memorable characters and heart-warming stories that appeal to audiences of all ages. IKEAs Purpose: [To offer customers] a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

What business are we in? What sort of an organization do we want to be? What is our scope of activities? What are the values/principals that underpin our organization? Strategic Intent: Ambition/goals and criteria for achieving them.

Vision
A vision statement outlines what the organization aspires to be. It focuses on the future and both galvanizes stakeholders and provides clear decision-making criteria. S M A R T Specific Measurable Achievable Relevant Time-bound

Vision

"McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.

Source: Doran, G. T. (1981). There's a S.M.A.R.T. way to write management's goals and objectives. Management Review, Volume 70, Issue 11(AMA FORUM), pp. 35-36.

Vision

Mission

Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way

Mission: Defines the fundamental purpose of an organization, its broad directions and the logic and values that underpin it. Basically, a mission statement describes why the organization or enterprise exists. Indicative statement + declarative statement Or 5 Journalists Questions: Who? What? Where? Why? How?

Introduction to the Dissertation

January 2009

Mission

Mission
We believe that we're on the face of the earth to make great products and that's not changing. We're constantly focusing on innovating. We believe in the simple, not the complex. We believe we need to own and control the primary technologies behind the products that we make and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects so that we can focus on the few that are meaningful to us. We believe in deep collaboration and cross pollination in order to innovate in a way others cannot. We don't settle for anything other than excellence in any group in the company, and we have the self-honesty to admit when we're wrong and the courage to change.

Apple designs Macs, the best personal computers in the world, along with OSX, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.

4 Cs of Strategy Cs
Network Strategy

Case: Google Inc.

Syndicate Group Discussion Questions:
Values

Culture/Process

Corporate Strategy

Fit

Fit Cognition/ Leadership Fit

Organizational Structures

Business Strategy

Power Structures/ Micro-behaviours

Content
Functional Strategy

Context
Systems of Control Inner Outer

What aspects of Googles strategy can you identify? What is their purpose? What is their vision and how important is this to Googles strategy? What is their mission and how important is this to Googles strategy? What recommendations would you give, as a strategic consultant, to the Board of Directors of of Google for the long-term sustainability of their purpose, vision, and mission?