Business Strategy
Business strategy
Workbook 1
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Contents
Learning objectives .......................................................................... 4
1.1 Organisational strategy .............................................................. 5
1.1.1 Definition of organisational strategy ........................................ 5
1.1.2 Corporate strategy ............................................................... 7
1.1.3 Business/service strategy ...................................................... 8
1.1.4 Operational strategy ............................................................. 8
1.2 Influences on strategy ............................................................... 9
1.2.1 Stakeholder value ................................................................ 9
1.2.2 The nature of value ............................................................ 12
1.2.3 Sustainable competitive advantage versus sustainable community
benefit................................................................................ 21
1.2.4
1.2.5
1.2.6
1.2.7
1.2.8
1.2.9
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Learning objectives
1) Define organisational strategy and discuss the different levels of
strategy
2) Identify key stakeholders and demonstrate how such stakeholders
influence strategy
3) Analyse value and demonstrate the impact of business,
stakeholders and public value on strategic choice
4) Compare sustainable competitive advantage and sustainable
community benefit
5) Explain vision and mission, demonstrating their applicability with
examples
6) Define core values and demonstrate how they may influence
organisational strategy
7) Analyse culture into different types and apply the cultural web
8) Discuss how laws and regulations in the public sector influence
organisational strategy
9) Discuss the impact of ethics and corporate social responsibility
(CSR) on strategic choice and analyse the CSR approaches
10) Discuss the impact of limited resources on organisational
strategy
11) Define resources and competences
12) Evaluate alternative approaches to developing organisational
strategy including environmentally driven strategy, the systemsbased approach, the resource-based approach, rational strategy,
emergent strategy, incremental strategy, freewheeling
opportunism, creative strategy and learning organisations.
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external environment
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Corporate
Operational
Tactical
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Exercise 1.2
Consider your own organization and outline how corporate strategy may
be applied.
1.1.3 Business/service strategy
The middle level of organisational strategy is known as business or
service strategy which is ...about how the individual businesses should
compete in their particular markets.4 Johnson et al5 explain that in the
public sector, business-level strategy could include the way in which
individual hospitals or schools provide their services. The business or
service strategy could also be considered as part of the organisation,
such as the Maternity Department within a hospital. Such units within
an organisation may be referred to as Strategic Business Units (SBUs),
which supply ...goods or services for a distinct domain of activity.6 In
both the private and public sector, each division specialising in providing
a particular product or service could be identified as being a SBU.
Exercise 1.3
Consider your own organization and outline how business or service
strategy may be applied.
1.1.4 Operational strategy
The lowest of the three levels of organisational strategy is operational
strategy which is ...concerned with how the components of an
organisation deliver effectively the corporate- and business-level
strategies in terms of resources, processes and people.7 Although
operational strategy is how activities are undertaken at the lowest level
within the organisation, it is crucial to ensure that both business or
service and corporate strategies are implemented successfully.
An example in an NHS Acute Trust would be the introduction of online
appointment management. This front line change could be supportive
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local authorities
general practitioners
local community
central government
lobbying groups
carers
universities
trust executive
ambulance trusts
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managers thinking about what is most valuable in the service that they
run and to consider how effective management can make the service
the best that it can be9
It can thus be seen, as the quote states, as being analogous to the
attempts of businesses to maximise value added through effective
management, but within a distinctive public sector ethos. This could
mean that public bodies seek to add value in ways that markets may
not do by, for example:
Public Value: The Next Steps in Public Service Reform, The Work
Foundation, 2008
10
Ibid.
9
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selfish and altruistic. In public service terms, this means people want
services that give them what they, or their family, need, but they also
usually want public services to operate in public-spirited, altruistic
ways helping the poor and needy regardless of their ability to pay.
We value public services for both things, and it makes it very
complicated satisfying such contradictory desires.
But I would add a third dimension to self-interest and public interest:
procedural interest. A 2002 book, Happiness and Economics,
illustrates this desire with various experimental and survey evidence.
Essentially, authors Bruno Frey and Alois Stutzer argue that humans
value 'fair play' even when they personally lose. And 'fair play', in a
public service context, includes not only fair processes in deciding who
gets what, but fair and inclusive processes for deciding public policy in
the first place i.e., democracy. With some fascinating data they
show that the Swiss cantons that most use referendums achieve higher
levels of happiness with public institutions than others.
So public value is a trade-off between self, public and procedural
interests. The weight given to each of these aspects varies
considerably. For example, we tend to value procedural fairness very
highly when it comes to things such as paying taxes, collecting benefits
and locking people up. We favour, usually, public-spirited action when
it comes to helping the very poor or the very sick or victims of manmade or natural disasters. We place a high value on personal interest
when it comes to things such as schools for our children.
None of these balances is, however, fixed and none can ignore the
other two completely. In many ways, the recent education debate can
be seen in these terms: self-interest (parental choice) versus public
interest (no two-tier education system) versus procedural interest (fair
selection processes).
Creating public value is a constant process of balancing and
rebalancing these trade-offs by finding out what the public actually
wants from services. Moreover, this three-way yardstick has to be
applied at all levels from what resources we dedicate to services,
through to the outputs and outcomes they produce.
This might seem to be a fiendishly complicated process, as indeed it is.
But when it doesn't work, it soon becomes apparent. If a public
service satisfies individuals but ignores public and procedural interests,
taxpayers and voters will soon think twice about supporting it. Those
in the government who claim that services can be completely
'customer-driven' would soon find that, if they were, the public would
stop wanting to pay for them. But the reverse is also true if a
service is oblivious to the needs of the individuals who use it, they will
soon let their dissatisfaction be known either verbally or often these
days through the courts.
To all those who think this is airy-fairy nonsense and what is needed is
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as the Brundtland Report after its chair, the Norwegian Prime Minister
Gro Harlem Brundtland. Sustainable development is subsequently
defined as Development that meets the needs of the present without
compromising the ability of future generations to meet their own
needs. 11 Keep this sustainability definition in mind as we go on to
explore sustainable competitive advantage and sustainable community
benefit.
Sustainable competitive advantage refers to how an individual
organisation can be better (and continue being better) than other
organisations trying to achieve the same goal on an on-going basis. In
the private sector this competitive advantage can be intuitively
understood such as one company offering a better product than its
competitor. A high profile on-going competition example includes that
between Pepsi and Coca Cola in the fight for carbonated cola soft drinks
sales. Of course, individual customers have different views on which
company provides the better drink. This links back to section 1.2.2,
where value provided was explored.
Competition in the public sector is less obvious but does still exist. Most
notably public sector organisations are competing for resources. For
example, central government will allocate a certain amount of its overall
budget to the Department of Health and a certain amount to the
Department for Communities and Local Government. Such government
departments are, consequently, in competition to obtain resources from
central government. Similarly at a lower level, individual local
authorities will be competing against each other to obtain their share of
the resources.
Aside from resources, other competition is evident in the public sector,
such as through the publication of league tables and individual
organisations competing to be the best or higher up the league table.
Examples include school league tables which may be used by parents to
choose which schools to send their children. Competition in the NHS
has become increasingly important due to choice being brought in for
patients regarding which hospital they are referred to for treatment.
These hospitals are now in competition with each other for patients
choosing them.
Gaining good performance often provides public sector organisations
with additional strategic freedom. For example, Monitor, the
11
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now move on to consider vision and mission it should also be noted that
in varying texts you will come across differing definitions.
Although organisations often formalise their mission or vision in a
statement, this is not essential and some organisations will have a more
informal mission or vision which is not formally documented.
Mission
The mission of an organisation relates to its goals or overriding
purpose12. The mission statement ...aims to provide employees and
stakeholders with clarity about the overriding purpose of the
organisation.13 Senior managers within an organisation may get
together to devise the mission or they may consult with employees
throughout the organisation. They may even contract external
consultants to phrase their ideas in a catchy statement.
Missions can be beneficial to an organisation by setting out clearly what
the long term focus of the organisation actually is, making it clear to the
organisations employees and other stakeholders. Mission statements
tend to cover the following areas:
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As discussed with the mission and mission statements earlier, there are
both potential benefits and criticisms of an organisations vision. It
would be useful for an organisation to have a clear vision of where the
organisation is heading and what they want to achieve. In effect, this is
a mini strategy in a sentence, providing a guide for all on where the
organisations is heading. However, summarising all that an
organisation wants to achieve in the next few years in a single sentence
can be extremely difficult, especially for all stakeholders to understand
and accept.
As with mission statements, then, the potential benefits and criticisms
of vision statements depends on how specifically they are written and
the attention given to them by the organisation.
Exercise 1.8
Access the Internet and search for the websites of at least five major
public service organizations. When you have found relevant websites, try
to identify each organizations mission and vision. Compare these with
those of your own organization and reflect on the variations you find.
Ultimately devising an organisations mission and vision must come as a
result of considering the existing and future plans, consulting the
various stakeholders and, in effect, summarising the overarching
strategy of the organisation. Clearly, some organisations will achieve
this difficult task more successfully than others. Furthermore, there will
be a wide range of differences in the extent that organisations use their
mission and vision statements to guide their everyday work compared
with them simply being statements in a file on a dusty shelf.
1.2.5 Core values
In addition to having a strategy in place, with a mission and vision
statement, organisations have been increasingly developing a set of
core values that ...are the underlying principles that guide an
organisations strategy.18 In the public sector, emergency services
such as the ambulance or fire and rescue services have the underlying
principle to save lives to the extent that employees will break strike
action or risk their own lives to attend emergencies and save others.19
The core values in the private sector may not be quite as extreme as in
18
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this emergency services example, but core values apply to both the
private and public sector.
Of course, the core values of any organisation need to be consistent
with their strategy and may also be linked to mission, vision and
stakeholder values. However, when considering an organisations core
value a distinction should be made between what their core values
actually are at the present time and the core values the organisation
would like to aspire to in the future.20
As an example from the public sector, the following are the core values
of the NHS21:
1.2.6 Culture
Culture is important in understanding an organisation, but it also
facilitates in appreciating the extent to which potential strategies will be
supported on implementation. For example, if you were to be looking
at a strategy of alliance between two organisations with very different
cultures, then there are likely to be problems in amalgamating
employees.
20
21
ibid
http://www.connectingforhealth.nhs.uk/resources/corevaluesposter.pdf
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Beliefs which are more specific than values and can be seen in the
way that individuals talk about the issues the organisation faces.
For example, an organisation may believe they should not invest in
unethical companies. You will look at ethics further in section 1.2.8.
22
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There are two key tools that are useful to explore the culture both
within and across different organisations; namely the cultural web and
Handys cultural types. The following sections look at both of these
tools in turn. These tools can be applied to both the private and public
sectors.
Cultural web
The cultural web is a tool used to understand an organisations existing
culture and its effect, allowing a practical, organisation-based approach
to identifying aspects of culture. However, the cultural web tends to be
primarily descriptive rather than being an analytical or normative tool.
It is basically a means of showing ...the behavioural, physical and
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Remember that we have defined the central paradigm as being the set
of assumptions held in common and taken for granted in an
organisation.27 We could see the paradigm as shaping many of the
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Stories
Symbols
Power
Organisational structure
Controls
Exercise 1.10
In this exercise you will apply the theory to your workplace by completing
a cultural web for your organization. Be as objective as you can: try to
look at your organization as if from the outside, recognising stories and
rituals for what they are. In completing your cultural web you may find it
helpful to think through the following questions:
Stories
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Symbols
Do lease cars, office size, chair size, parking space, mobile phone
denote anything?
Power
Controls
Organizational structures
Paradigm
Perhaps most challengingly, what do you think the underlying paradigm
is? What do all the clues above tell you about the way people in your
organization think and feel about your organization?
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Cultural types
Handy defines four main cultures based on how power is exerted29:
As you can see from the above examples, Handys cultural types can be
used to consider different patterns of culture within and across public
and private sector organisations. The culture within an organisation is
likely to differ between the private and public sector, which links back to
the values and beliefs. For example, public sector organisations will
tend to have a bureaucratic culture focussed on helping the public
through services provided but keeping within a tight budget. Private
sector organisations will be much more competitive and money
oriented, with individuals focussing on obtaining power and financial
rewards.
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Exercise 1.11
The role culture is perhaps the one most closely identified with the
public sector, which is often seen as being hierarchical and
unresponsive. Try to identify examples of the other three categories in
public or not-for-profit examples. You may want to use whole
organizations for your examples or particular functions/subcultures
within larger organizations.
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Statutes, regulations and rules outlining what must (or must not)
be done by the organisation.
This process, known as the regulatory cycle, is repeated over and over
again.
Regulation
Regulation has become increasingly important in the public sector over
recent years with various bodies established to regulate how public
sector organisations are run. Central government and the public place
reliance on such regulators to ensure that the public sector
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Care Quality Commission that regulates all health and adult social
care services in England, including those provided by the NHS, local
authorities, private companies or voluntary organisations.
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The MPs call for the Department for Transport to review the regulators
powers, while the ORR itself should put in place a more robust
performance management system to monitor efficiency savings.
To make savings, Network Rail plans to reduce spending by about
1bn on renewing old tracks and replacing signalling, but the
committee concludes that there is considerable uncertainty over
whether deferring this work is genuinely efficient or simply delaying
costs for the future.
PAC chair Margaret Hodge said the ORR must obtain evidence that
putting off maintenance is efficient, sustainable and safe.
She added: We doubt whether the Office of Rail Regulation can put
effective pressure on Network Rail to improve its performance. Fines
simply reduce the amount of investment in the railways. Britain needs
a regulator with teeth, who can ensure proper value for money for both
the taxpayer and fare-payer.
The committees report, Office of Rail Regulation: regulating Network
Rail's efficiency, follows the McNulty review into the costs of the rail
industry published in May. This found that between 700m and 1bn
could be saved annually by 2019 through greater efficiency across the
industry, including train operators as well as Network Rail.
Responding to the report, ORR chair Anna Walker said the regulator
had been successful in challenging Network Rail to find significant
efficiency savings of 15bn over a ten-year period.
She added: This is in sharp contrast to other parts of the rail industry
that we do not regulate where costs have remained far too high. We
regulate Network Rail using a wide range of levers to drive up
performance, efficiency and safety. Fines are rarely used and only as a
last resort....
Public Finance, 12/07/2011
Private sector organisations are also subject to laws and regulations. A
tool to identify such laws that may impact on an organisation is PESTLE
which is further covered in Workbook 2 (section 2.1.1).
Exercise 1.12
Which regulators are involved in inspecting your organization?
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Laissez-faire
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Enlightened self-interest
Shaper of society
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account for their CSR performance35. This has resulted in the public
responding to issues that previously they would not have become
involved with, meaning that CSR has become an important strategy for
companies to pursue in order to appeal to the publics new interest and
even using this as competitive advantage36. Protests by activists and
the public against social and environmental issues can have a huge
impact on a companys sales. Examples include child labour claims
against Nike and Primark, with environmental protests against Shell and
BP, all resulting in negative publicity for the companies and customers
responding by moving their trade elsewhere. Just as such protests and
publicity can have a negative impact on companies; many organisations
are now seeing CSR as a positive strategy to achieve competitive
advantage. Indeed, more and more the public are expecting high levels
of CSR to be provided by both companies and public sector
organisations.
1.2.9 Limited resources
As you saw from section 1.2.8, there are a variety of CSR stances an
organisation can adopt ranging from simply complying with legislation
to trying to make a real difference to society. Although the approach
adopted may be dependent on beliefs within the organisation and the
strategic direction being led by the management, it will also
undoubtedly be to some extent affected by the resources available.
Indeed, any strategy that an organisation pursues must be achievable
within the resources they have access to.
Resources within an organisation could include:
finance
information
Porter, M. and Kramer, M. (2006) Strategy and Society: The link between
competitive advantage and corporate social responsibility. Harvard Business
Review, 84 (12): 78-92.
36
ibid
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Exercise 1.14
Think about your own organization and the recent austerity drive.
Identify how any reductions in resources have impacted on strategies that
were previously being pursued by the organization.
Do you think your organization has changed its strategy due to the limited
resources which are available?
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the impact of the outside environment on the way the whole system
operates.
The different parts or sub-systems of an organisation have been defined
in varying ways. Some commentators have defined the sub-systems as
the various departments (finance, marketing, production etc), whilst
Leavitt (1978)37 for example, defined the sub-systems as the different
aspects of the business:
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Note that those who criticise theories such as the systems approach for
being an oversimplification should beware: to use a systems approach
for all the various sub-systems is to risk it becoming a hopelessly
complex task.
The organisation as a system Open Systems Theory
An organisation interacts with the outside world. For example, it takes
in people and resources, and gives out products and services. This is
known as an open system.
Within an organisation there may be many interrelated sub-systems
and many organisations are, therefore, highly complex and require
management at various levels this links back to sections 1.1.1 to
1.1.4 where you were introduced to the three levels of organisational
strategy: corporate; business/service; and operational strategy.
The open systems theory considers an organisation, and each of the
sub-systems within it, in terms of:
the inputs
the outputs
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Outside environment
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38
Johnson, G. Whittington, R. and Scholes, K. (2011: page 83) Exploring Strategy Text and
Cases, Ninth Edition. Harlow, England: Pearson Education Limited.
39
Knutsson, H., Mattisson, O., Ramberg, U. and Tagesson, T. (2008) do strategy and
management matter in municipal organisations? Financial Accountability and Management,
24(3), 295-319.
40
Johnson, G. Whittington, R. and Scholes, K. (2011) Exploring Strategy Text and Cases,
Ninth Edition. Harlow, England: Pearson Education Limited
41
Knutsson, H., Mattisson, O., Ramberg, U. and Tagesson, T. (2008) do strategy and
management matter in municipal organisations? Financial Accountability and Management,
24(3), 295-319.
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Example resources
Physical resources
Fire station
Financial resources
Cash flow
Funding
Human resources
Fire-fighters
Managers
Intangible resources
Reputation
Example
competences
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resources
competences
How do you think the resources and competences you have identified
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strategic leadership
strategic planning
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Strategic planning
The following steps suggest the process that a formalised strategic
planning system may follow.
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happened. Meetings are planned, minutes are taken, action points are
noted, responsibilities and deadlines are allocated.
It helps to co-ordinate the various parts of the business. For
example, the process in local authorities and other organisations will
involve the allocation of resources across all service areas, and the need
to determine which areas of service are key priorities and which are not.
Communicates the strategy to the staff. The formalisation of the
process will mean that minutes of meetings, action points, service
plans, operational plans and other key documents will be produced by
the process and be accessible to key stakeholders including staff.
Participation can improve commitment. A number of key
stakeholders, such as staff, elected members, board members etc will
be involved in the process and such involvement can improve
commitment because it can foster a feeling of shared ownership.
Externally imposed
Imposed strategy is where strategy is developed externally for an
organisation, for example by Central Government or within a multidivisional organisation imposed by the corporate head office. The key
point is that strategic development is dominated and determined by a
particular powerful stakeholder. Although imposed on the organisation
in question, obviously the strategy must have been designed
somewhere.
Some Governments argue that their strategy imposition is necessary
to overcome the inertia arising from incremental strategies. The
development of incremental strategies is further explored in section
1.3.6.
The concept of imposed strategy is particularly relevant to public
services, as the extent to which all public services organisations are free
to decide their own strategies is a subject of continual debate. The
extent of strategic freedom is tied up in the issue of localism, which is
the extent of local control over issues. Localism devolves power to local
groups, giving them strategic freedom the question is always to
which groups should power be devolved? - National government,
regional, county, district, parish or some alternative grouping?
Of course, just because these strategies have been deliberately
developed by managers it does not mean that the strategy will actually
be fulfilled. This is the distinction between an intended (planned) and
realised (actually occurred) strategy.
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Exercise 1.18
1. Are the following statements true or false?
a) Imposed strategy is developed by a dominant leader within the
organization
b) Strategic leaders manage strategy alone
c) Imposed strategies are common in the public sector
2. Identify the five steps a formalised strategic planning system may
follow.
1.3.5 Emergent strategy
One method of how strategies develop is emergent (or adaptive)
strategy, where ...strategies emerge on the basis of a series of
decisions, a pattern which becomes clear over time.48 The concept of
the emergent strategy, which was originally generated by Mintzberg, is
now widely accepted in the academic literature with four key
explanations on how emergent strategy occurs:
logical incrementalism
political processes
prior decisions
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ibid
Johnson, G. Whittington, R. and Scholes, K. (2011: page 407) Exploring
Strategy Text and Cases, Ninth Edition. Harlow, England: Pearson Education
Limited.
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parties. The following extract from a Public Finance article shows how
the Liberal Democrats have had to compromise and negotiate on the
coalitions strategy on student university tuition fees.
No LibDem rebellion on student fees, says peer
The Liberal Democrats will back Lord Brownes recommendations on
higher education funding but might push for employers to contribute
more, a leading LibDem peer has told Public Finance.
Lord Willis, who during the last Parliament chaired the Commons
innovation, universities, science and skills select committee, said there
were significant flaws with the graduate tax, which he and Business
Secretary Vince Cable had previously supported. He added that
Brownes proposal for a Student Finance Plan was a fair compromise.
Brownes report, published today, recommended that universities be
allowed to set their own fee levels, which will be paid off after a
student graduates.
There has been speculation that some LibDem MPs will oppose the
proposals. The party fought the general election on a platform
opposing tuition fees, but Willis said: I dont believe there will be a
LibDem rebellion. I believe the party is mature enough to recognise
that it is a very different scenario being part of a government and
facing the largest fiscal deficit the nation has ever seen.
Our twin objectives of trying to maintain a world-class higher
education system and universal access to it have largely been achieved
by the Browne recommendations.
However, he added: I would be the first to accept in an ideal world we
would like the state and employers to put a great deal more into the
pot than they are at the moment. I am pretty sure that, in the
passage of any legislation, the party will be seeking to make further
improvements in the offer. He said he thought it would be accepted
by Parliament, with some amendments.
Public Finance, 12/10/2010
Prior decisions
Strategies may also emerge as the product of prior decisions which
inform (or possibly even constrain) strategy development. It would not
be viable for an organisation to change their strategy fundamentally on
a regular basis and therefore makes sense for a strategy to emerge
more gradually based on prior decisions.
There are a range of other factors that may also impact on the
development of a strategy within this approach, such as an
organisation's culture. You may find it helpful to look back over section
1.2.6 of this workbook where you considered culture in more detail.
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Organisational systems
This fourth explanation for the development of emergent strategies is at
the opposite end of the continuum to logical incrementalism in terms of
how deliberate the strategy development actually is. It is proposed that
strategies emerge based on lower level managers responding to issues
with the systems and routines undertaken within the organisation. The
strategy development is more of a bottom-up approach compared to
the top-down approach considered earlier.
Examples include the finance director in a police authority being
primarily concerned with the financial systems. It could be that
systems linked with targets being measured by central government will
receive disproportionate attention at the expense of other areas.
Exercise 1.19
Consider the extent the strategies developed in your own organization are
emergent.
Which of the four explanations for the development of emergent strategy
do you think fits best with your organization?
1.3.6 Incremental strategy
Incremental strategy and strategic drift were mentioned earlier in
section 1.3.1. However, this section looks at the incremental approach
to strategic development more specifically.
Rational models, such as that explored in section 1.3.4, have been
criticised as being unrealistic, due to the impossibilities of predicting an
uncertain future. There are limits on what managers can actually
predict. The best that can be expected has become known as bounded
rationality where ...managers do the best they can within the limits of
their circumstances, knowledge and experience.53 Other models to
explain strategy development have therefore emerged, such as
incremental strategy as a method of responding to the actual
environmental changes on an on-going basis.
The strategies in many organisations change incrementally that is on
a gradual basis. Most organisations use what has happened (and has
been successful) in the past as a basis for future strategies. Often
there is a period of continuity where strategy is largely unchanged or
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ibid
Johnson, G. Whittington, R. and Scholes, K. (2011) Exploring Strategy
Text and Cases, Ninth Edition. Harlow, England: Pearson Education Limited.
55
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Exercise 1.20
Identify an organization that you consider to be pursuing an incremental
strategy. Explain to what extent strategic drift is a risk to this
organization.
1.3.7 Freewheeling opportunism
Some strategy development approaches, such as the rational approach
in section 1.3.4, involve rather rigid and bureaucratic processes which
can stifle innovation and flexibility. It is often in response to these
disadvantages of the rational approach that other strategy formation
approaches have developed, such as freewheeling opportunism.
In contrast to the rational approach, freewheeling opportunism is
basically where there is no formal approach to strategy development.
As the name suggests, Mintzberg refers to this as an opportunistic
strategy, where organisations search for opportunities. In fact, no good
opportunity should be missed under this philosophy. You may also see
this approach called the entrepreneurial model, which is in line with an
entrepreneur looking to take such opportunities which may be risky.
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less complicated
increased flexibility
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Exercise 1.22
Nonakas model stresses the importance of actively managing learning
processes within the organization and managing the knowledge which is
such an important intangible resource of any modern business. Consider
the ways in which such activities are managed in your own organization.
In particular consider:
Whether there is a bias towards one or more of the four knowledgecreation routes outlined Nonaka, possibly to the detriment of
others.
How the soft or tacit knowledge of experienced staff is put to use.
What knowledge management systems are in place in your
organization.
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Argyris and Schn65 suggest that learning involves the detection and
correction of error. When something goes wrong, they propose that
many people initially look for another strategy that will address and
work with the variables involved. What this means is that given or
chosen goals, values, plans and rules are operationalized rather than
questioned. This is termed single-loop learning.
As an alternative to single-loop learning, Argyris and Schn propose
double-loop learning, which is where people respond by questioning the
governing variables themselves, and subject them to critical scrutiny.
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66
Senge, P. M. (1990) The Fifth Discipline: The Art and Practice of the
Learning Organization. Century Business.
67
Pedler, M., Burgoyne, J. and Boydell, T. (1991) The Learning Company: a
strategy for sustainable development. Maidenhead: McGraw-Hill.
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Exercise 1.24
Think about your own organization and consider how it compares to the
definition of a learning organization and the 11 characteristics.
What elements of being a learning organization do you think your
organization possesses?
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Summary
This workbook set the scene for the module by defining organisational
strategy and introducing the different levels of strategy within
organisations. A range of factors that influence strategy were explored,
such as an organisations core values and culture.
You should also understand alternative approaches to developing
organisational strategy, ranging from the planned rational approach to
the creative and environmentally driven strategies.
This workbook introduced many key concepts which will be built on in
the rest of the course. It is therefore important that you fully
understand these issues before moving on.
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Additional exercises
Exercise 1.25 (exam standard)
For large organizations strategy will exist at different levels. One of the
principal challenges facing such organizations is to integrate or cascade its
strategy effectively throughout the organization.
As part of an organizations strategy, many public sector organizations
have mission statements. Indeed, mission statements are held in high
esteem by many experts, and equally ridiculed as management fashion by
others.
a)
Requirements
Explain the different levels at which strategy exists in large
organizations.
(9)
b)
c)
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a)
b)
c)
Requirements
Johnson, Whittington and Scholes refer to four corporate social
responsibility stances that an organization may take as part of
its strategic development. Describe the four stances and
identify the stance you consider to be dominant in the public
sector, justifying your answer.
(8)
Describe corporate social responsibility and explain why is it
relevant to the public sector.
(12)
Explain what is meant by core values and describe their
relationship with an organizations mission and vision.
(5)
(25)
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a)
b)
c)
Requirements
Use the cultural web to describe the culture and paradigm of an
organization with which you are familiar. In doing this you
should define each element of the web, giving an example of it
from your organization, and comment upon the significance of
each example for the organizations culture.
(16)
Explain the ways in which you think that the above cultural web
is reflected in your organizations approach to strategic
management.
(5)
Briefly outline Charles Handys four cultural types.
(4)
(25)
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a)
b)
Requirements
Identify and describe the approach to strategy development you
believe to be dominant in the NHS, justifying your answer.
(5)
Identify and describe the other approaches to strategic
development and assess their prevalence in the wider UK public
services. You should justify your views with supporting
examples.
(20)
(25)
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Requirements
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