Strategy and the organization
Chapter 1a: Strategy and the organisation
1.0 What is an organization?
1.1 An organization as a collection of components
1.1.1 Internal environment An organization can be seen as consisting of the following components:
Strategies
Structures
Systems
Skills
Staff
Style
Shared beliefs: Social systems
Note: McKinsey’s 7S framework
1.2 Organisations as collections of people and entities
1.2.1 Internal Stakeholders
(i) Board of Directors
(ii) Managers
(iii) Staff
(iv) Unions
1.2.2 External stakeholders
(i) Government: Political (PEST)
(ii) Users: Social (PEST), Customer behaviour
(iii) Customers: Buyers (Porter’s 5 Forces) Distributors, Retailers,
(iv) Financiers: Investors, Banks
(v) Owners: Corporate Governance
(vi) Suppliers: Suppliers (Porter’s 5 Forces)
(vii) Competitors Competitor Analysis
1.3 Organisations, politics, power and rationality
Assumption that organization and individuals behave rationally
Organisational politics and power
(i) Information the decision-makers have
(ii) Relative power of stakeholders and their influence on strategic choice
1.4 The nature and value of strategic management
Strategic management includes:
Managing activities internal to the firm (operations environment)
Monitoring and responding to the immediate (micro) environment
(i) Competitors
(ii) Suppliers
(iii) Increasingly scare resources
(iv) Government agencies
(v) Government regulations
(vi) Customers
Monitoring and responding to the remote (macro) environment
(i) Political priorities
(ii) Economic conditions
(iii) Social conditions
(iv) Technological developments
Managers have to subordinate the demands of the firm’s internal activities and external environment to the multiple and often inconsistent requirements of stakeholders: owners, top management, employees, communities, customers and country.
To deal effectively and enhance the growth and profitability of the firm
To employ management processes
1.0 What is an organization?
1.1 An organization as a collection of components
1.1.1 Internal environment An organization can be seen as consisting of the following components:
Strategies
Structures
Systems
Skills
Staff
Style
Shared beliefs: Social systems
Note: McKinsey’s 7S framework
1.2 Organisations as collections of people and entities
1.2.1 Internal Stakeholders
(i) Board of Directors
(ii) Managers
(iii) Staff
(iv) Unions
1.2.2 External stakeholders
(i) Government: Political (PEST)
(ii) Users: Social (PEST), Customer behaviour
(iii) Customers: Buyers (Porter’s 5 Forces) Distributors, Retailers,
(iv) Financiers: Investors, Banks
(v) Owners: Corporate Governance
(vi) Suppliers: Suppliers (Porter’s 5 Forces)
(vii) Competitors Competitor Analysis
1.3 Organisations, politics, power and rationality
Assumption that organization and individuals behave rationally
Organisational politics and power
(i) Information the decision-makers have
(ii) Relative power of stakeholders and their influence on strategic choice
1.4 The nature and value of strategic management
Strategic management includes:
Managing activities internal to the firm (operations environment)
Monitoring and responding to the immediate (micro) environment
(i) Competitors
(ii) Suppliers
(iii) Increasingly scare resources
(iv) Government agencies
(v) Government regulations
(vi) Customers
Monitoring and responding to the remote (macro) environment
(i) Political priorities
(ii) Economic conditions
(iii) Social conditions
(iv) Technological developments
Managers have to subordinate the demands of the firm’s internal activities and external environment to the multiple and often inconsistent requirements of stakeholders: owners, top management, employees, communities, customers and country.
To deal effectively and enhance the growth and profitability of the firm
To employ management processes