Strategy: an overview

1. Strategy: an overview Jonny Holmström Web: jonnyholmstrom.com Email: jonny.holmstrom@informatik.umu.se Twitter: jonnyholmstrom

2. IT Management Group • www.itmanagementgroup.se

3. Outline Definitions Forms of Strategy Coherence in Strategic Direction Information Systems Vs Information Technology The importance of vision/mission The organizational context for strategies: Mintzberg’s structure in fives

4. “Strategies are both plans for the futureand patterns from the past”- Henry Mintzberg

5. Definition of Strategy A strategy is a plan of action designed to achieve a vision. It derives from the Greek "στρατηγία” (strategia), "office of general, command, generalship” (Wikipedia).

6. Aspects of Strategy • Statement of ends, purposes and intent • High level plan • Element of leadership • Positioning for the future • Building capability • Fit between capabilities and opportunities • Pattern of behaviour resulting from embedded culture

7. Strategic Management • Strategic management is the study of why some firms outperform others • How to create a competitive advantage in the market place that is unique, valuable, and difficult to copy • “Total organization” perspective, integrating across functional areas • Strategies put together an understanding of the external environment with an understanding of internal strengths and weaknesses

8. Definition of Strategic Management Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages (Dess, Lumpkin, & Eisner, Strategic Management: Creating Competitive Advantage, 3rd Ed., p. 9).

9. Attributes of Strategic Management • Directs the organization toward overall goals and objectives • Includes multiple stakeholders in decision making. • Needs to incorporate short-term and long-term perspectives • Recognizes trade-offs between efficiency and effectiveness • Efficiency describes the extent to which time or effort is well used for the intended task or purpose; Effectiveness is the capability of producing a desired result

10. Mintzberg’s Views of Strategy • Plan - consciously intended course of action • Ploy - maneuver to outwit opponent • Pattern - consistency in behavior • Position - location in environment • Perspective - way of perceiving the world

11. Forms of Strategy • Formal versus informal - associated with size of firm and stage of development • Intended versus realized - intended strategies are the plans managers develop; realized strategies are the actions that actually take place over time

12. Forms of Strategy Source:H. Mintzberg and J. A. Waters, “Of Strategies, Deliberate and Emergent,”Strategic Management Journal 6 (1985), pp. 257-72.

13. Hierarchy of Goals Coherence in Strategic Direction • Company vision • Massively inspiring • Overarching • Long-term • Driven by and evokes passion • Fundamental statement of the organization’s • Values • Aspiration • Goals Company vision

14. Company vision Hierarchy of Goals Coherence in Strategic Direction • Mission statements • Purpose of the company • Basis of competition and competitive advantages • More specific than vision • Focused on the means by which the firm will compete Mission statements

15. Company vision Mission statements Hierarchy of Goals Coherence in Strategic Direction • Strategic objectives • Operationalize the mission statement • Measurable, specific, appropriate, realistic, timely, challenging, resolve conflicts that arise, and yardstick for rewards and incentives Strategic objectives

16. Example: Coca Cola’s Vision and Mission • Vision: ”The Coca-Cola Company exists to benefit and refresh everyone it touches. The basic proposition of our business is simple, solid, and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business.” • Mission: “Everything we do is inspired by our enduring mission: • To Refresh the World… in body, mind, and spirit. • To Inspire Moments of Optimism… through our brands and our actions. • To Create Value and Make a Difference… everywhere we engage.”

17. Payroll System IS Vs IT INFORMATION TECHNOLOGY Hardware Software Databases Networks Other related components Inventory System are used to build INFORMATION SYSTEMS Marketing System Customer Service System

18. IT vs IS Strategy • Carr (2003): IT doesn’t matter • Since everybody can buy the same technology strategic advantages cannot be found in having IT in the organization • IS matter! • Merely having IT is not enough; what matters is what you do with it

19. Mintzberg’s ‘Structure in fives’: An organisation has five main parts • Strategic apex • Middle line • Support staff • Technostructure • Operating core

20. Five main configurations • Mintzberg proposes five main configurations, or kinds of organisations • These are contexts where strategies are played out!

21. Simple structure • A small shop • A new agency • A start-up company led by a very dominant person

22. Machine bureaucracy • A traditional airline • A paper and pulp factory

23. Professional bureaucracy • University • Hospital

24. Divisional form • A major corporation • Umeå municipality

25. Adhocracy • A project based consulting or R&D company • Some highly innovative companies or agencies (e.g. North Kingdom)

26. When analyzing strategies in organizations • We will meet mixed configurations • Thus, in your project, in the two seminars, and in the essay assignments: you may see cases that tend to confirm, falsify or call for elaboration of Mintzberg’s five types

27. When analyzing IT strategies in organizations (Peppard et al., 2014)