An Introduction to Strategy

1. An Introduction to Strategy Kevin Hinde

2. Aims • Introduce the economic problem of scarcity and relate this to the concept of strategy. • Explore the meaning of organisational strategy and competitive strategy. • Investigate the processes by which strategy is formulated within the organisation.

3. Learning Outcomes • Summarise the economic problem and relate this to the issue of strategy through a self-assessment activity. • Analyse the various definitions of strategy and critically consider which is more appropriate to your organisation. • Critically examine the meaning of strategic management and contrast this with a ‘Rationalist ‘ perspective via note taking.

4. The Economic Problem of Scarcity • Insatiable Wants • Scarce Resources • Choices • Opportunity Cost

5. Marvellous Markets? • Markets are complex social institutions where exchange takes place. • Markets can fail to function properly (Market Failure) • Information Asymmetry • Market Dominance • Externalities • We will look at Information.

6. Information Asymmetry • Differences between simple and complex exchange. • Contrast buying a newspaper with the purchase of a road. • Information problems with complex exchange. • Opportunism and the ‘hold up’ problem • resolved by quasi-market behaviour or integration • Whatever happened to ‘Trust’?

7. Marvellous Government? • Do we always need regulation when markets fail? • Self-regulation • market adjustment mechanisms • Do we need Government to provide ‘public goods’? • What about the ‘merit good’ argument? • How good is government?

8. Summary so far……..

9. How does strategy fit in? • strategy is the process by which individuals and organisations make choices about scarce resources so as to satisfy wants over time in an environment of uncertainty. They are aided in this process by market and non-market forces.

10. Organisational Strategy • “A strategy is defined as a pattern, of purposes, policies, programmes, actions, decisions, or resource allocations that define what an organisation is, what it does, and why it does it. Strategies can vary by level function, and by time frame.” (Bryson, 1995, p.32)

11. Competitive Strategy • Strategy is the direction and scope of an organisation over the long term: which achieves advantage for the organisation through its configuration of resources within a changing environment, to meet the needs of markets and to fulfil stakeholder expectations” (Johnson and Scholes, 1999. p.10).

12. Outwitting a rival Place in the market A powerful group A consciously intended course of action, general or specific Mintzberg’s 5 P’s • Strategy can be characterised as a • Ploy • Position • Perspective • Plan • Pattern

13. Forces determining Strategy affect Intentions and realisations Emergent Strategies Intended strategy Realised strategy Unrealised strategy Intended, emergent and realised strategies

14. Planning and Strategic Management. • "[Strategic management] is a means of understanding the strategic position of the organisation: formulating courses of action, evaluating them and choosing between them; as well as planning how the choice of strategy can be put into effect and managing the resultant changes." Johnson and Scholes (1994)

15. Planning and Strategic Management. • planning is a sequence of analytical and evaluative procedures to formulate an intended strategy and the means of implementing it. (Johnson and Scholes, 1999) • is Planning unconcerned with emergent strategy?

16. And Finally…. • Summary • Have you covered the learning activities? • Any questions?