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T. 39B. U. –. D S. R A T E G IC M ANA G E M E NT IN THE B UI L T E N V IR O NM E NT. Lesson T h r ee : St r a t e g y In Action P a r t One :. T he. St r a t e gic Man a gement P r ocess. sl/B M BE/2016. 1. D39BU – Strategic Management in. the. Built. Environment.

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  1. T 39B U – D S RATEGICMANAGEMENTINTHEBUILTENVIRONMENT Lesson Three: StrategyIn Action PartOne : The StrategicManagement Process sl/BMBE/2016 1

  2. D39BU–StrategicManagementin the Built Environment REFERINGTOTEXTBOOKUNIT 4 sl/BMBE/2016 WHAT WHAT STRATEGY? STRATEGICMANAGEMENT? IS IS 2

  3. D39BU–StrategicManagementintheBuiltEnvironment ACCORDING … strategy TOWHITTINGTON(2001)… should betreatedasthecontested and imperfectpracticeit reallyis ….which meansthatstrategyis elusiveandabstract sl/BMBE/2016 as it is a very long term development. 3

  4. D39BU–StrategicManagementin theBuiltEnvironment WHATISSTRATEGY? Accordingto Chandler(1962) Strategyisthe determination sl/BMBE/2016 ofthebasic Long termgoalsandobjectives ofanenterprise Andtheadoptionofcoursesofaction andtheallocationofresourcesnecessarytoachieve thosegoals…. 4

  5. Other definitionsof strategy… sl/BMBE/2016 Strategyis the skill in managing planning…or or “Strategyis the primary meansof reaching thefocalobjective. 5

  6. D39BU – StrategicManagement intheBuiltEnvironment OTHERDEFINITIONSOFSTRATEGY The art or scienceof theplanning andconduct war – Collins(1995) Strategyis supposedtoleadan organisation through changesandshiftsto secureitsfuture of   sl/BMBE/2016 growth andsustainablesuccess- Cleggs(2005) The processof formulating,implementing of  actionsderivedfrom a competitiveposition which is basedon distinctivecapabilitiesto have relationshipwith customers,suppliers,employees etc. --Kay 1993 6

  7. D39BU–StrategicManagementintheBuiltEnvironment STRATEGIC MANAGEMENT BUSINESSPOLICY Providingtheroad map thedestination/goals TOP Mgt/CEO and sl/BMBE/2016 DIVISIONAL THEROLE MANAGERS StrategicBusiness UnitPOLICY OF EACH TACTICALOR OPERATIONAL PLANS Restof organisation 7

  8. D39BU–StrategicManagementintheBuiltEnvironment SO M S EOFTHECOMMONSTRATEGICISSUE 1.Growthconcerns- sl/BMBE/2016 2.Diversificationissues andproblems 3.Issuesofcompetitive advantage 8

  9. e v ? D39BU–StrategicManagement intheBuiltEnvironment Knowingwhereyour organisation Isheadingandhowtogetther MEANINGOF PLANNING STRATEGIC 70 Settingclearobjectivesand mobilisingresourcestoachie theobjectives e sl/BMBE/2016 50 30 Thinkinginlongterm Takingintoaccountthemacro environmentinwhichthe 10 - organisationoperates–looking atwhatyoucandobetterthan competitors Yr1 Yr2 Yr3 Yr4 Forexample: GrowthofBusiness 9

  10. D39BU–StrategicManagementintheBuiltEnvironment STRATEGICISSUES&CONCERNS Addressinganddevelopingorganisationaims& goals Examining valuesand culturesunderpinning organisation the sl/BMBE/2016 Assessingtheappropriatenessof structure future directions Exploring marketplacerelationshipsand stakeholders’concerns for Exploring currentandfutureexpectationson ROI etc 10

  11. D39BU–StrategicManagementintheBuiltEnvironment STRATEGICPLANNINGISAIMEDWITHTHE FOLLOWINGOBJECTIVES To To To maximiseshareholders’values achievecompetitivepositioning andpower helpgrow profitsandexpandtheorganisation sl/BMBE/2016 To To satisfycustomers provideemployment for thecommunity (RefertoPg4 Unit 4) 11

  12. D39BU – StrategicManagement intheBuiltEnvironment Overview of developmentofstrategicmanagement … DYNAMICFORMULATIONAND IMPLEMENTATION COMPLEXITY STRATEGIC PROCESSES sl/BMBE/2016 COMPETITIVEADVANTAGE PHASEOFGENERALISATION STRATEGICPLANNING FORMULATION IMPLEMENTATION 12 Competitiveness Valuechain Genericstrategies Strategic plans/SWOT Lifecycle/ portfolio/ PIMS Strategy processes Orgnlearning BPR Mergerandacquisition TIME

  13. D39BU –StrategicManagementintheBuiltEnvironment Overallview of Strategic Management sl/BMBE/2016 Step1 Step3 Step4 Step2 Opportunities & Risks–assessments Byconsidering Resourcesand capability Implementing strategiesand actionplans Evaluationof Bestmatchbetween Opportunitiesand resources Environmental scanning 13

  14. g y D39BU – Strategic DIMENSIONSOF Management intheBuiltEnvironment STRATEGY implementation Scope Acquisition andinternaldev Content Activities/resources/technolo sl/BMBE/2016 Diversification/growth process STRATEGY Centralordecentralorgn/structure philosophy Report/plan/whatmodel? Method Analytic/deductive/ enterpreneurial/system 14 Timeframed Ownership Howmanyyearframes? Specialists/topmgt/employees

  15. D39BU–StrategicManagementintheBuiltEnvironment HIERARCHY OFSTRATEGY CorporateHQ Corporate Strategy sl/BMBE/2016 Business Unit Business Unit Business Unit Business Strategy Functional/ operational Strategy Operations Finance Marketing Research& development Human resources 15

  16. D39BU– DIFFERENCE StrategicManagementintheBuiltEnvironment BETWEENSTRATEGIC & OPERATIONALMANAGEMENT StrategicMgt OperationalMgt Broadlevelaccountability Middlelevelaccountability sl/BMBE/2016 Dotherightthings Dothethingsright Concernsoverfuture growth&competitive position&financialgrowth Concernsoverdept performance&budgets& salestargets&quality Longtermfocus Shorttermanalysis Highlevelofcomplexity& uncertainty Lesscomplexandstable 16 RefertoPg5 Unit4

  17. D39BU–StrategicManagementintheBuiltEnvironment ACCORDINGTO … strategyshould imperfect practice strategyis elusive term development. WHITTINGTON… betreatedasthecontestedand it reallyis ….which meansthat sl/BMBE/2016 andabstractasit is a very long He developswhatwe know asthe 2 x2 framework or the 4perspectives of managementapproach 17

  18. D39BU–StrategicManagementintheBuiltEnvironment 4 PERSPECTIVESON STRATEGY– EACH WILLHAVE DIFFERENT IMPACTON MANAGEMENT STYLE OFORGANISATION LEADERSHIP sl/BMBE/2016 Classical Evolutionary Processual Systematic 18

  19. D39BU–StrategicManagementintheBuiltEnvironment DIAGRAM ONTHE4PERSPECTIVESONSTRATEGY Outcomes profit maximisation CLASSICAL EVOLUTIONARY sl/BMBE/2016 Processes Deliberate emergent SYSTEMATIC PROCESSUAL plural/mixed 19

  20. D39BU–StrategicManagementintheBuiltEnvironment ClassicalPerspective Rational planningbecauseprofitabilityisthe supreme goal of business; Strategicposition of the firm isvitalto achieveprofit maximisation asit istheaimofbusinesstoearna returnon capital sl/BMBE/2016 Topdown , rationalmanagementapproach to decision making and focuson long termgoalsthroughlogical cascadingofactionsand resource Refertothesupplementarynotes “BritishLibrary:the world’sknowledge” 20

  21. D39BU–StrategicManagementintheBuiltEnvironment ADVANTAGESOFCLASSICALAPPROACH Accountabilityandcontrolbytopmanagementso that middle managementcanconcentrateonoperational matters; sl/BMBE/2016 Militarytraditionofstrategymeansthatdecision making is centredontheleaderwhohastheforesight andtheexperiencetoplanandexecuteproper command Rationalandwell thoughtlongtermplanningfocussed on fulfillingobjectivesset 21

  22. D39BU–StrategicManagementintheBuiltEnvironment DISADVANTAGEOFCLASSICALPLANNING Top managementmaynot beableto knowall the issues at handandact rationally Bureaucraticandslowprocessthuscausingtime sl/BMBE/2016 wastage Decisionmakingmay notbeforthe benefitofall stakeholdersas it is toorigid 22

  23. D39BU–StrategicManagementintheBuiltEnvironment EVOLUTIONARYAPPROACHTOSTRATEGY Based ongroupsof managersto planandstrategize usingthebest possiblemethodssuchas cost-benefit sl/BMBE/2016 analysis andotherwaysto mapoutresourcesand strategiesforbusinessdevelopmentandgrowth Decisionmakingis basedonvariousoptionsand consensusby managersandexpertsinthefield, takingintoaccountcompetitioninthe marketplace 23

  24. D39BU–StrategicManagementintheBuiltEnvironment ADVANTAGESOFEVOLUTIONARYPERSPECTIVE Take intoconsiderationcompetitiveenvironmentin whichbusinessoperates; sl/BMBE/2016 Let naturetakesits courseso thedecisionmakers considermanyfactorsintheecologyof businessand select thebestalternativefor survivalandgrowth 24

  25. D39BU–StrategicManagementintheBuiltEnvironment PROBLEMSENCOUNTEREDUSING EVOLUTIONARYPERSPECTIVE Organisationsmaylack capacityto achieve differentiationandadaptationto sustain sl/BMBE/2016 competition; Marketsareunpredictableandtheenvironment can be dynamicandturbulentwhichresultsin changes whichmay betoorapidfortheorganisationsto slowly evolve.. 25

  26. D39BU–StrategicManagementinthe PROCESSUALAPPROACHTO BuiltEnvironment STRATEGY Similarto evolutionaryapproach butmore cautiousbytakingsmallsteps procedurallyand carefullyto achieveobjectives; sl/BMBE/2016 Internalproceduresandexternalcomplexitiesare weighedbymanagersindecisionmaking Takingfeedbackfromthe groundandenabling people’sopinion so thata satisfactoryoptionis presentedfor implementation 26

  27. D39BU–StrategicManagementintheBuiltEnvironment ADVANTAGESOFPROCESSUALAPPROACH This kindof managementtakesintoconsideration individualinterestvia theboundedrationality deriveat adecision to sl/BMBE/2016 Strategiesarechosennot programmed– dependingontheemergentissuesthatarise Decisionsaremadeafterconsideringhuman factors andbehavioursto integratebestdecisions 27

  28. D39BU–StrategicManagementintheBuiltEnvironment THECHALLENGESOFPROCESSUALAPPROACH Time consumingdueto theneedto considermany variablesandcouldendangertheorganisation’s longtermsurvival; sl/BMBE/2016 Doesnottakerationalthinkingseriously Lack of sufficientmanagerswith therightskillsand knowledgeto ensuresuccessof this kindof strategy sodecisionsmaynotbetheoptimal solutions– mayjust besatisfyingonesonly 28

  29. D39BU–StrategicManagementintheBuiltEnvironment SYSTEMICPERSPECTIVEONSTRATEGY Examinesthevarioussocialsystemswithin the organisationand evolvedecisionsthatconsider sl/BMBE/2016 both economicandsocialimplications Dependingon theinternalcorporateculture,the decisionmakersgo by therulesof themajority so as to getviablegoalsachievedwhich maynotbe the profit maxmisationobjectivebut achieve overall stakeholders’satisfaction 29

  30. D39BU–StrategicManagementintheBuiltEnvironment ADVANTAGESOFSYSTEMS All stakeholdersareinvolvedin of theorganisation; VIEW the social systems sl/BMBE/2016 Take intoembeddedsystems withintheorganisation andconsiderall socialgroups’inputssuchas culture andvalues 30

  31. D39BU–StrategicManagementintheBuiltEnvironment DEMERITSOFTHESYSTEMICPERSPECTIVE Varioussocialandculturalsystems mayhave sl/BMBE/2016 conflicts with unhappiness eachothercausingdissentand withintheorganisation; May resultin somedominantdecisionmakers who may pushthroughtheirideasanddecisions 31

  32. D39BU–StrategicManagementintheBuiltEnvironment TABLESHOWINGTHEVARIOUSELEMENTSASSOCIATEDWITHTHE 4 PERSPECTIVESONSTRATEGY Classic Processual Evolutionary Systemic Strategy Formal Crafted Efficient Embedded Goals ProfitMax Mixedgoalsof bothprofitand satisfaction Survival Stakeholders’ satisfaction sl/BMBE/2016 Focus Internal planning Political planning External market External societal planning cultures Processes Analytical Learning Darwinian evolution Socialcreation Keyinfluences Military Psychology Economics Sociology Keygurus Chandler/ Porter Mintzberg Hannan& Freeman Granovetter & Whitley Periodof emergence 1960s 1970s 1980s 1990s

  33. D39BU–StrategicManagementintheBuiltEnvironment INESSENCE… The 4approaches/theoriesorperspectivesshowdifferent ways in whichmanagementlookatstrategicdecisions. The classicalschoolconfidentlyprescribesarational detachedandsequentialapproachtolongtermstrategic management; sl/BMBE/2016 The evolutionaryandprocessualperspectivesare morecautiousandplanaccordingtohierarchy which work well in stableenvironmentswhile thesystems accountthe approach is morerelativistic takinginto socialsystems andtheenvironmentinteractio33n

  34. … D39BU–BusinessManagementintheBuiltEnvironment Anotherlook at strategicpositioning ASORGANISATIONSAREOPERATINGINA COMPETITIVE WORLD,STRATEGIESARE DEVELOPEDTOCOPEWITHTHENEEDTO SURVIVEINTHEMARKETPLACE. in reality sl/BMBE/2016 STRATEGICMANAGEMENTISSUPPOSEDTO HELPORGANISATIONSSTEERTHROUGH CHANGESANDSHIFTSINTHEENVIRONMENT TO SECUREFUTUREGROWTHANDSUSTAINABLE SUCCESS. 34

  35. D39BU–BusinessManagementintheBuiltEnvironment Strategicpositioningin reality … Justlike youand I, without a long term goal,  we will be aimless,so goals, vision, mission through thestormsof in themarketetc.. organisationsneed to enablethemto sail competition,changes sl/BMBE/2016 In fact,strategicplanning issimilar to the art of war (Sun Tze)– youneedto understandstrategicpositioningandalso the processofanalysis,formulationand then implementationof yourtacticsand operationsin order to succeedin business 35

  36. D39BU–BusinessManagementintheBuiltEnvironment STRATEGIESAREBASEDONCERTAIN SCHOOLSOFTHOUGHTSONWHICHDIFFERS THEWAYSTRATEGICPLANNINGISDONE IN sl/BMBE/2016 3 basicthoughtsvia … Classicalor rationalplanning The designschool The positioning school school 1. 2. 3. 36

  37. D39BU–BusinessManagementintheBuiltEnvironment 1.CLASSICALORRATIONALPLANNING SCHOOL is fashionedafterAlfred Chandler’smodel, where planning is top down, bureaucraticapproachof centraldecisionwhich iscascadeddown to the bottom of thehierarchyin theorganisation sl/BMBE/2016 IgorAnsoff’smodelof 3 levelsof decisions: Strategic---thenOperational---Administrative a pyramidalformatlike thisbelow: in Strategiclevel Operationallevel 37 Administrativelevel

  38. D39BU–BusinessManagementintheBuiltEnvironment 2.THEDESIGNSCHOOLOFTHOUGHT Fashionedlikethe planningschoolexcept that thereis internalfocuson SWOT externalanalysisof theenvironment This processis adoptedby most and sl/BMBE/2016 organisationstoday - 7 stepsto strategicplanning discussed………nextslide will be 38

  39. D39BU–BusinessManagementintheBuiltEnvironment DIAGRAM SHOWINGTHEPROCESSOFSTRATEGICPLANNING– A7-STEPMODEL Vision& Swotanalyss mission 39 STEEP&ScenariosPlanning Strategicanalysis&options decisionmaking Implementation sl/BM BE/2 Evaluation& monitoring

  40. D39BU–BusinessManagement in the Built Environment VISIONANDMISSION 40 Discussin pairsthevarious vision andmission of theseorganisationsgivenin the (5minutes) exercise Write yourown visionandmission beyond for2017& sl/BM BE/2

  41. D39BU–BusinessManagementintheBuiltEnvironment 3. THEPOSITIONINGSCHOOL MICHAELPORTER’SMODEL– EVOLUTIONARY/COMPETITIVE : ALSOPARTOFTHE PERSPECTIVE sl/BMBE/2016 This isthe strategicapproach basedon competition–survivalof thefittest. Porter argues that profitabilityof an of theorganisationto othersin theindustry capabilitiesto handle organisationliesin the power positionitselfagainstthe andhow it usesits its bargainingpositionto sustaingrowth andsuccess. 41

  42. D39BU–BusinessManagementintheBuiltEnvironment MICHAELPORTER:GURUOFSTRATEGIC MANAGEMENT His theoriesinclude: Diamond Model sl/BMBE/2016 Generic Businessstrategies 5 ForcesModel Value ChainAnalysisetc.. 42

  43. MICHAELPORTER’SSTRATEGIES Will be discussed in detail in Lesson 4 sl/BMBE/2016 43

  44. DISCUSSTHEFOLLOWINGQUESTIONS: Assignment 1. What arethe environmental sl/BMBE/2016 issues thatwillaffect theBuilt Environment Industry? Listand describeat least3 ofthem 2. Whichstrategicapproachdoyouthinkis adopted your seniormanagement? by 44

  45. D39BU–StrategicManagementintheBuiltEnvironment COREREADINGFORMODULE Carter,C.,Clegg,S.,Kornberger,M(2008)Averyshort, fairlyinterestingandreasonablycheapbookaboutstudying organisations,Sage,London Clegg,S.,Kornberger,M.,Pitsis,T.(2005)Managingand ◦ sl/BMBE/2016 ◦ Organisations:Anintroductiontotheoryandpractice,Sage, London (2nd Whittington,R.(2001) Ed.)WhatisStrategy–anddoes ◦ itmatter?,Thomson,London Mintzberg,H.,Ahlstrand,B.,Lampel,J.(1998)Strategy Safari:thecompleteguidethroughthewildsofstrategic management,PrenticeHall,London Langford,S.,Male,S.(2001)StrategicManagementin Construction,Blackwell,Oxford Journalpapers..................... ◦ ◦ 45 ◦

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