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What is strategic management?

Blackberry AdvertGlobal Strategy is just one part of the larger subject of Strategic Management. Typically in many strategic management textbooks, International and Global Strategy appears as one of the chapter alongside many others – for example, it’s chapter 19 in my book.

Take the Blackberry RIM range of mobile phones. This Canadian company has been very successful, so far, in terms of its international and global strategy. But it began by using the basic principles of strategic management – customer focus on the business customer, competitive advantage through its focus on the easy email access, resource-based analysis based on its patented technology – rather than anything specific to global strategy.

But then Blackberry RIM added a global strategy – for example, its co-operation with the Reliance mobile network in India shown right – to add to the basic strategy.

What this means is that many of the basic principles of Strategic Management – customer focus, competitive advantage, resource-based analysis, etc. – are also fundamental to the development of International and Global Strategy. The purpose of this section of the website is therefore to offer a brief summary of some of the main elements. Clearly, it is not possible to cover all the material set out in an 800-page text. Here, we highlight some key areas and principles.

First, we summarise the two main strategic processes – prescriptive and emergent – and mention some of the background theories that underpin them.

Second, we present video summaries of some selected chapters from my book StrategicManagement 5th Edition which explore the main areas in more depth. You may like to know that the four previous editions of the book were called Corporate Strategy: we changed the title for the fifth edition to reflect changes in strategy thinking since the publication of the first edition in 1997.

Background to strategic management development

In reality, strategic management is a relatively young subject. It has its roots in the economic and social theories of the 1930s and 1940s – perhaps even earlier. But it only really began to emerge as a separate topic in the 1960s and 1970s. Even today, there is only partial agreement on the fundamental principles of strategic management with many views, ideas and concepts. This makes the topic interesting and challenging.

But it also means that there is no fully accepted body of knowledge unlike, for example, mechanical engineering or organic chemistry. According to one recent authoritative survey amongst academic strategists (Nag et al,Strategic Management Journal, 2007, Vol 28, pages 935-955), there are two main streams of thought related to strategic process: prescriptive (or intended) strategic processes and emergent strategic processes.

The authors produced the following definition from their survey over the period 1983-2004: ‘The field of strategic management deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments.’

This website uses the word prescriptive in place of intended in the above definition.

Breakfast Cereal Market

The website accompanying my book Strategic Management 5th edition has a film that explores in depth the differences between prescriptive and emergent strategic processes. It’s called ‘The Battle for the European Breakfast Cereal Market.’ It’s available here: www.pearsoned.co.uk/HigherEducation/titlesby/Lynch/

 

Prescriptive Strategy ProcessPrescriptive Strategy Processes

To quote from my own textbook, ‘A prescriptive strategy is one whose objective is defined in advance and whose main elements have been developed before the strategy commences.’

Such an approach usually begins with an analysis of the outside environment and the resources of the company. The objectives of the organisation are then developed from this. There then follows the generation of strategic options to achieve the objectives, from which one (or more) may be chosen. The chosen option is then implemented.

This full range of activities is called the prescriptive strategy process. There are a number of strategy theories that explain elements of this process within prescriptive strategy and these are highlighted in the model above right.

The video films below explore prescriptive strategy in more depth.

Emergent Strategy ProcessesEmergent strategic Process-slide2

An emergent strategy does not have the same fixed objective. The whole process is more experimental with various possible outcomes depending on how matters develop.

To quote again, ‘An emergent strategy is one whose final objective is unclear and whose elements are developed during the course of its life, as the strategy proceeds.’

Thus the early stages of emergent strategy may be similar to prescriptive strategy – analysis of the environment and resources. But then the process becomes more circular, learning and experimental.

Again, there are a number of strategy theories that fall under the general heading of emergent strategy. Some of these are highlighted in the emergent strategy process model shown above right.

The free video films below provide more depth, particularly on the differences between prescriptive and emergent strategic processes.

Examining some strategic concepts in more depth: video films from selected chapters of my book, Strategic Management 5th edition

To help fill out some of the detail, here are some video films from my book Strategic Management. This website has ten free films summarising ten selected chapters from the book.

Published in 2009, the full Strategic Management 5th edition actually has 20 chapters. You can hear audio summaries for all the remaining ten chapters by logging into the book’s website: www.pearsoned.co.uk/lynch. This material is downloadable onto an iPod. The book’s website also has video summaries of some of the cases, self-assessment questions and electronic flashcards for revision. There is also the much longer case video that explores an actual strategy example in more depth mentioned earlier on this page. But you will need an Access Code that comes with each copy of the text.

Chapter 1 Introducing Strategic Management

The film sets out the main topics associated with the subject of Strategic Management. This is important when developing international and global strategies because the main topic headings are the same both for companies focused on one home country and for those engaged in international activities.

You can download the slides from this film here.

Chapter 3 Analysing the strategic environment

Analysing the environment surrounding the organisation is a crucial early first step in the development of international and global strategies. The film outlines the main areas that need to be covered. However for international and global strategies, there are some specialist extra areas – like relationships with government and national competitors – that would need to be explored in more depth.

You can download the slides from this film here.

Chapter 4 Analysing resources and capabilities

Any organisation planning to go outside its home country needs to think carefully about its resources. International and global activity will stretch the resources of many organisations, even those that are already deeply involved internationally. This film sets out a structure for analysing the current strategic international or global position of the organisation – crucial for those planning future international activity.

You can download the slides from this video here.

Chapter 6 Prescriptive purpose delivered through mission, objectives and ethics

Because international expansion has both benefits and costs, it is vital to define clearly the general reasons for international and global expansion – otherwise the costs might be greater than the benefits! This video provides structures some of the issues that need to be explored when setting international and global objectives.

The film also briefly identifies some of the importance corporate social responsibililty and ethical issues that may well arise in international expansion.

You can download the slides from this video here.

Chapter 7 Purpose emerging from knowledge, technology and innovation

Innovation is often crucial to successful international and global expansion. But there is no ‘magic formula’ for this outcome. This means that simply defining the purpose in terms of some rigid international objectives is highly likely to fail. There needs to be a more open-ended and experimental approach to the whole process of moving globally. This is most likely to arise from exploring knowledge and technology alongside the innovation process itself. The chapter explains the main issues and sets out some of the key ways that innovation can be directed to achieve international success.

You can download the slides from this video here.

Chapter 8 Building strategic options at the business level

Any organisation planning international and global expansion will have a large number of options – perhaps by lowering its costs, perhaps by a joint venture or an acquisition. The chapter helps to structure the process of developing options for an individual business area.

Chapter 10 Choosing between strategic options

After developing strategy options, the next logical step is to choose between them – whether for an organisation in one country or an organisation planning international expansion. The chapter provides a logical and structured way of selecting the best option (or options in some cases). This is an important step in developing an international or global strategy for an organisation from a prescriptive process perspective.

Chapter 11 Finding the Strategic Route Forward

Many of the recent successes in international and global strategy have not come from prescriptive strategic planning – just look at Google and Facebook, for example. This chapter explores some alternatives, focusing particularly on the Learning-based strategic route forward. The basic principles are the same for one country or for many. But the added complication of international expansion makes such learning strategy even more crucial. Strategic Management 5th Edition (and the earlier editions under the title of Corporate Strategy) is one of the few textbooks – possibly even the only one – to explore this route in depth

Chapter 13 Implementing the strategy

International and Global strategies need to be implemented. But how do you go about this task? What are the important elements of such a process? This video summarises some of the main issues, including an outline of the Balanced Scorecard.

Chapter 15 Managing Strategic Change

When new international and global strategies are developed and introduced, there are typically people issues. Some people will like the strategies and support them while others will resist changes that threaten their roles and responsibilities. How do we manage such opportunities and problems? There is extra complexity in dealing with such issues on an international or global basis: this is explored in the section on ‘Global Management’ on this website.

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