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Presentations slides taken from chapter 6 of the Cengage book. by Oliver Laasch , Center for Responsible Management Education (CRME) and Roger N. Conaway , Tecnol ó gico de Monterrey (ITESM ). Learning Goals First steps towards being able to ….
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Presentations slides taken from chapter 6 of the Cengage book by Oliver Laasch, Center for Responsible Management Education (CRME) and Roger N. Conaway, Tecnológicode Monterrey (ITESM)
Learning Goals First steps towards being able to…
Changing the Rules of the Game at Betapharm • Strategy to dispense traditional advertising and marketing and instead to invest massively in care initiatives such as • Beta Institut which produces medical and social literature production as one of the main information sources for pharmacies and medical practices • Training for nurses and care assistants • Assistance in post-stroke treatment, breast cancer, and teenage addiction and violence • Achievement of responsible competitiveness • “The Betapharm Model” • Economic competitiveness through social value creation
The Goal : Responsible Competitiveness • A strategy is an integrated and coordinated set of commitments and actions designed to gain a competitive advantage. • A strategic competitive advantage is an overall position advantageous in comparison with peers’ positions, which commonly leads to above-average returns on investment for the owners of an organization. • Responsible competitiveness is the achievement of a competitive advantage for an organization through the strategic management process while also creating above average responsible business performance.
phase 1 formulating the mission, vision, and strategic objectives
Formulating the Mission, Vision, and Strategic Objectives • Strategic normative documents are typically organized in the following logic: • A vision statement delineates what an organization ultimately should become and achieve. • A mission statement defines what the business is and does at a certain point in time, typically including the business’s market, customers, products, processes, and values. • Strategic objectives and goals translate the often lofty directions given by vision and mission statements into concrete medium- and long-run “to-dos.”
phase 2 analyzing the strategic environment
Dynamics of Internal and External Environments Inside-out linkages outside-in linkages describe the influence of external factors on internal productivity and strategy execution. • describe how the business’s internal environment influences the external environment.
Figure 6.3Exemplary Responsible Business Factors Influencing the Five Forces of Industry Environment
The Resource-Based View • The resource-based view of the company aims at explaining how company resources and their management contribute to the achievement of competitive advantage. • A competence is merely something a company is good at, while a core competence is central to a company’s strategy and competitiveness. • The most valuable type of competence is a distinctive competence, being a competitively valuable activity that a company performs better than competitors and which therefore leads to a competitive advantage.
Figure 6.5 Responsible Management: Resources and Competitive Advantages
phase 3 crafting the strategy
Strategy Levels • The three main hierarchical types of organizational strategies are also called strategy levels. • The corporate level strategy answers the question “In how many markets do I want to compete and how many stages of my value chain activities do I perform myself?” • The business level strategy gives guidance on “How do I manage a strategic business unit competing on a certain product market?” • The functional level strategy answers the question “How do single business functions support the overarching strategic objectives? • Together these three strategy levels constitute the strategic backbone of a company to which various other strategies covering additional situations can be attached.
Corporate Level Strategy, Integration, Diversification and Divestment • The corporate level strategy defines in how many markets a company competes (horizontal integration) and to what degree the business performs activities throughout its upstream and downstream supply chain (vertical integration). • The process of increasing the number of business units and markets in which a company is competing is called diversification, while the process of decreasing the number of business units is called divestment. • A related diversification is diversification into a new business activity that has an obvious link to a company’s actual business activity, while an unrelated diversification misses such a relationship.
Business Unit Level Strategy • The business unit level strategy is an integrated and coordinated set of commitments and actions a firm uses to gain a competitive advantage by exploiting core competencies in specific product markets.
Figure 6.8 Effects of Responsible Management on Strategic Positioning
Figure 6.9 Synergy Map of the Strategic Alignment of Responsible Management Activities at Starbucks Korea
Functional Level Strategy • The functional level strategy aims at the development of strategies of single business functions that support the company’s overall strategy.
phase 4 EXECUTING AND EVALUATING STRATEGY
Strategy Implementation and Control Implementation control Organizational controls guide the use of strategy, indicate how to compare actual with expected results, and suggest corrective actions when the difference between actual and expected results is unacceptable. • Hardwiring of a responsible management strategy refers to its implementation in the organizational infrastructure, • Softwiring implements responsible management throughout the organization’s social fabric.
Figure 6.10 Responsible Management Balanced Scorecard at Cinépolis Source: Adapted from Kaplan & Norton, 1995
Principles of Strategy: Responsible Competitiveness • The goal of strategic responsible management is the achievement of level-two responsible competitiveness, a situation in which the organization’s economic competitiveness is based on and enhanced by responsible business competitiveness. • The strategic management process consists of four phases: (1) shaping vision and mission, (2) analyzing the internal and external strategic environments, (3) shaping strategies, and (4) implementing and evaluating strategies. • Mission and vision statements are a “lighthouse” for any subsequent organizational activity and therefore should integrate responsible business considerations in addition to economic aspirations. • The three strategic environments are the company’s internal environment, the industry, and the macroenvironment. In each environment, responsible management factors play a crucial role.
Principles of Strategy: Responsible Competitiveness • The strategy hierarchyconsists of corporate strategies for a company with several strategic business units, the business unit strategy, and the functional strategy. • Responsible management can create valuable diversification advantages on the corporate level, support strategic positioning for business units, and support functions’ contributions to the overall organizational strategy. • Implementation of responsible management strategies is based on “hardwiring” them into organizational structure, and “softwiring” them throughout the human factors. • The balanced scorecard is an excellent tool for controlling the social, environmental, and economic indicators leading to responsible competitiveness.
