The Learning School CH 7

1. The Learning School sees strategy formation as an emergent process. This school suggests that strategy is learned over time and will emerge as time and experience mix(177).

2. The primary proponent for the learning school is Mintzberg.

3. The learning school took several stages: disjointed and logical incrementalism, strategic venturing, and finally emergent strategy and then retrospective sense making. The idea of the learning model is that strategy takes time as it is a process that emerges. The process of emergence can be simple yet complex as it evolves overtime (179-207).

4. The premises for the Learning School (208):

                1. Strategy making must above all take the form of a process of learning over time where formation and implementation become indistinguishable.

                2. The collective system (beyond just the leader) learns as a whole to form strategy for most organizations.

                3. The learning process must happen to stimulate thinking retrospectively so that sense can come from action.

                4. The role the leader takes is to manage the process of strategic learning, whereby novel strategy can emerge.

5. Critiques of the learning school:

                – No strategy: before learning there is no strategy

                -Lost strategy

                -Wrong strategy

                -Careful of learning

                With all of this in mind, most companies prefer to have a leader with a vision design the strategy and then learn from the wins and loses to emerge an even better model of strategy.

6. The learning model has brought the “knowledge spiral” which envelops the socialization, externalization, internalization, and combination of learning experiences.  Core competences are also developed through learning and retrospective processing. It is when the company learns openly that the best strategies emerge!

The Cognitive School CH6

1.Strategy formation is a mental process according to the Cognitive School. Strategy is subjective and interpretive according to the human mind and process (150).

2, 3.  There were several leading proponents of the Cognitive Model (152-170):

                1. Cognition as Confusion- Herbert Simon, Duhaime and Schwenk

                2. Cognition as Information Processing- Corner, Kinicki, and Keats: This model has several parts of the human mind as it formulates  beginning with attention , encoding, storage, choice and outcomes.  

                3. Cognition as Mapping – Karl Weick : the map is a mental structure of organized knowledge and thoughts about the future plans.

                4. Cognition as Concept Attainment—Herbert Simons: Because strategy is a concept, strategy making is concept attainment.

                5. Cognition as Construction – Gregory Bateson: This portion of the school focuses on interpretation of strategy and construction of it.

4. Premises of the model (170):

                1. Strategy formation takes place in the minds of the strategist.

                2. Strategies emerge as perspectives.

                3. Inputs flow through the human minds filters before being decoded by the cognitive maps humans design.

                4. Strategies are difficult to attain and difficult to change.

5. A common criticism of the Cognitive School  stems from its subjectivity. Because the strategy formation is subject to the minds and conceptual maps of the individual, formation is very different and inconsistent along the board (172).

6. The cognitive school has brought the awareness and importance of the human mind. The school tells us that “we had better understand the human mind, as well as the human brain if we are to understand strategy formation” (173)

The Entrepreneurial School CH 5

1. The foundation upon which the entrepreneurial school was built was on vision. The central concept is in the vision which is a mental representation of strategy created by a leader. The strategy formation process leans specifically on a single leader with innate mental processes and responsibility for the success of the business (124).

2. The leading proponents of the model grew from economics. Karl Marx and Schumpeter introduced the formation of a strategy through leadership (125).

3. The basics of the model is that strategic thinking is “seeing” or having a vision for the entire organization. It involves seeing ahead and behind, down and below, beside and beyond, and through(126).  

4. The premises of the model (143):

                1. Strategy exists in the minds of the leader as a perspective vision for the future of the organization.

                2. Strategy formation is rooted in the experiences and intuition of the leader.

                3. The leader promotes the vision.

                4. The vision is malleable.

                5. The organization in a sense if malleable.

                6. Entrepreneurial strategy tends to niche in defense against competitors.

5. Criticism and Critiques of the School:

                Stacey claims many “harmful consequences of vision”

–          The vision is neither “concrete or possible” when the future is unclear.

–          The vision is too tight and not flexible.

–          The vision can be unrealistic and a burden on the leader.

   All in all, the entrepreneurial school is risky as it does hinge on the “health and whims” of a passionate individual.  

6.  The contribution that the Entrepreneurial School has provided in the way of strategy formation is the point of vision. Vision is important when formulating a strategy and a fearless leader is too.

Competing on Resources: Strategy in the 1990s by Collis and Montgomery

The article was clear and well organized. It actually cleared up some questions I had about Porter’s forces and the definition of core competences. The arguments were sound and logical.

Outline

I. Framework of resources

   A. Internal analysis

   B. External analysis

II. Competitively Valuable Resources

  1. Scarcity
  2. Appropriability
  3. Demand

III. Resources as an Effective Strategy

  1. The test of inimitability: Is the resource hard to copy? (physical uniqueness, path dependency, casual ambiguity, economic deterrence)
  2. The test of durability: How quickly does this resource depreciate?
  3. The test of appropriability: Who captures the value that the resource creates?
  4. The test of substitutability: can a unique resource of trumped by a different resource?
  5. The test of competitive superiority: Whose resource is really better?

IV. Strategic Implications

  1. Investing in Resources
  2. Upgrading Resources.
  3. Leveraging Resources: resource contributive competitive advantage.

 

The main points of the article are the following:

–          Superior performance is based on a development that is competitively distinct.

–          The History of Strategy: Strategy is the match beween what a company can do (organizational strength and weaknesses) with in the universe of what it might do (environmental opportunities and threats). (121)

–          The core competence should be an external assessment of what it does better than competition.

–          Core competence identifies the critical role that the corporate office has to play in order to guard their strengths or jewels of their corporation (125).

The Core Competence of the Corporation by Prahalad and Hamel

The article was organized but not as clear in the way the points were communicated. It used logical examples of Canon and Honda to prove the importance of its points which was very useful to see practical application. Although the application was beneficial, it also made the article a bit confusing and unclear because the points were not clearly and well defined and left for interpretation.

Outline

I. Rethinking the Corporation

II. The Roots of Competitive Advantage – are differentiation

III. How not to think of Competence

  1. Not about outspending rivals on research and development.
  2. Not about shared costs

IV. Identifying Core Competencies

  1. Provide potential access to a wide variety of markets.
  2. Contributing to the perceived customer benefits of the end product.
  3. Difficult for competitors to imitate.

V. Core Competencies to Core Products – Core products are the physical embodiments of one or more core competencies.

VI. The Tyranny of SBU

VII. Developing Strategic Architecture

  1. Every company’s architecture is different and unique.
  2. The strategic architecture should make resource allocation priorities evident to the entire organization.

VII. Redeploying to Exploit Competencies

The main points of the article are the following:

–          The root system that provide “nourishment, sustenance, and stability is the core competence (82).”

–          Core competences are about the organization of work, delivery of value – primarily the strategy at work.

–          Core competences are the wellspring of new business development and should constitute the strategy of corporate level (91).

–          The core competences link the products of the company to the competencies (principles of the strategies).

After reading and reporting about the core competencies of an organization, I wish the article had clearly and boldly defined what core competencies consist of exactly. I understand they are different for every company; can someone define it, please?

How Competitive Forces Shape Strategy by Porter

This article was written with clarity and was organized well. The organization of the article was designed by the five “competitive forces” and the elaboration of the forces and how they effect the market. As the article’s thesis statement, proclaims its purpose as to describe the five “competitive forces” that affect the market arena and show how important it is for companies to consider them so that they can adjust to them.  The article was logical in its arguments and description of the forces that affect the market. The five forces are the following:

  1. Contending Forces: the strongest competitive force that determine profitability of an industry.
  2. Threat to Entry: the force to gain market shares and substantial resources.

Barriers to entry: economies of scale, product differentiation, capital requirements, cost disadvantages, access to distribution channels, and government policy.

  1. Powerful suppliers and buyers: the forces that they create can squeeze profitability.
  2. Substitute Products
  3. Rivalry Forces: Competitors can be a force that affects profitability.

The main points of the article are as follows:

–          The “essence of strategy formation is coping with competition (34).”

–          The forces in the market environment can identify his company’s strengths and weaknesses (46).

–          Strategy can be defined as “ building defenses against the competitive forces or as finding positions in the industry where the forces are weakest (47).

–          Exploit new markets- looking at industries can could someday threaten the industry.

Staking out a position among the many forces helps to promote your strengths and exploit others weaknesses.

Car and technology in the News.

Since my future will be in the car business, I looked for articles that would help me understand the market better.

 

Can Hyundai Sell Pragmatic Prestige?

Mike Ramsey. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 20, 2010. pg. B.1

                I enjoyed this article about the new Hyundai’s luxury model of the Sedan, Equus. The goal to lure affluent buyers  and to raise the company’s image is strategic. It will affect the company’s image and organizational structure if it succeeds. The investment is long term and will also affect long term conditions and positioning. Do I think their attempt to enter the luxury market will succeed? NO. Many time people buy luxury for the “image” it represents. By selling a $13,000 car on the same lot as $60,000 luxury vehicle, the image many are looking for will be lost. In my opinion, it will not be a strategy that will succeed.

Corporate News: Nissan Charges Ahead in China

Norihiko Shirouzu. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 21, 2010. pg. B.3

                The car industry is moving toward electrical technology in order to keep up with demand and competition. This venture in China is definitely a part of their strategic plan to stay competitive in the near future. It is both a monetary commitment and will have a long term impact on the future. This venture beginning in China will directly impact the organization as a whole because the venture will change the future of the car industry.

Dell Teases Next Tablet — CEO Shows Device With Seven-Inch Screen, Google Software

Ian Sherr. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 23, 2010. pg. B.4

                Dell’s  new tablet device designed to compete with the iPad is purely a competitive tactic to compete with Apple. Their seven inch screen pad which doubles as a smart phone is an investment that I see as strategic in order to sustain against competition. It is a long term investment and have long term impact in order to create technology that will compete with Apple. This new device could affect the entire organization’s structure if it hits the mainstream as a PC version of the iPad. Dell is in survival mode in my opinion as they continue to react to the creative innovations that Apple continues to provide their customers.

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