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Strategy is about positioning an organization for
sustainable competitive advantage. It involves
making choices about which industries to
participate in, what products and services to
offer, and how to allocate corporate resources to
achieve a sustainable competitive advantage. And
its primary goal is to create value for
shareholders and other stakeholders by providing
customer value (de Kluyver, 2000).
The
of the
Strategic Management Process
Strategy
Analysis
Strategy
Evaluation
Strategy
Formulation
Strategy
Implementation
The Mintzberg Perspective
Five Ps for Strategy
Henry Mintzberg (1987)
 1. Strategy as a Plan
 A consciously intended course of action. The
strategy is:


Made in advance of the actions to which they apply
Developed consciously and purposefully
 UNR Master Plan
http://www.unr.edu/masterplan/MasterPlanIllustrative.htm
Five Ps for Strategy
Henry Mintzberg (1987)
 2. Strategy as a Pattern

A pattern in a stream of actions

Hume: Strategies may result from human actions but not
human designs
DELIBERATE
STRATEGY
UNREALIZED
STRATEGY
Five Ps for Strategy
 3. Strategy as a Ploy: “maneuver”
 4. Strategy as Position
 5. Strategy as Perspective
 An ingrained way of perceiving the world

“The HP Way”
 What personality is to the individual
Strategic Planning
 Sun Tzu:"All men see the tactics
whereby I conquer, but what none can
see is the strategy out of which great
victory is evolved."
The Hierarchical
Business Plan
Vision Statement
Mission Statement
Long-Term Goals/Objectives
Annual Objectives
Action Plan
Building Your Company’s Vision
By: Collins, James C., Porras, Jerry I., Harvard Business Review, 00178012, Sep/Oct96, Vol. 74, Issue 5
•Strategic Intent
•Enhancing the Benefits and Overcoming the Pitfalls of
Goal Setting.
Vision is the art of seeing the
invisible." (Jonathan Swift) "
Steps to Build a Vision
 A well-conceived vision consists of two major
components: core ideology and envisioned future:
 Core ideology, the yin in our scheme, defines what we
stand for and why we exist. Yin is unchanging and
complements yang, the envisioned future.
 The envisioned future is what we aspire to become, to
achieve, to create-something that will require significant
change and progress to attain.
Core Ideology
 Core values are the essential and enduring tenets of an
organization. A small set of timeless guiding principles,
core values require no external justification; they have
intrinsic value and importance to those inside the
organization.
 Core purpose, the second part of core ideology, is the
organization's reason for being. An effective purpose
reflects people's idealistic motivations for doing the
company's work. It doesn't just describe the
organization's output or target customers; it captures
the soul of the organization.
Envisioned Future
 BHAGs - (pronounced BEE-hags and shorthand for
Big, Hairy, Audacious Goals) A true BHAG is clear
and compelling, serves as a unifying focal point of
effort, and acts as a catalyst for team spirit. It has a
clear finish line, so the organization can know when
it has achieved the goal; people like to shoot for
finish lines. A BHAG engages people - it reaches out
and grabs them. It is tangible, energizing, highly
focused.
 Vivid Description - a vibrant, engaging, and
specific description of what it will be like to achieve
the BHAG. Think of it as translating the vision from
words into pictures, of creating an image that people
can carry around in their heads.
To Begin: Start with the Right
Goal
 Mantra #1 - The primary goal
of Strategic Managers is to
produce extraordinary results
(superior long term ROI).
Strategic Vision
 Vision = Senior management's "strategic
intent."
Strategic Intent
Vision Statements
 Bill Gates, 1975: "A computer on every desktop and in
every home.“
 Steve Ballmer, 1999: "Empower people through great
software anytime, any place and on any device."
Mission Statement
 Mission Statement = Documents the
purpose of organizational existence and
often contains a code of corporate
conduct to guide management in
implementing the mission (de Kluluyver,
2000).
Vision into Mission
Backing into a Vision
 Team Building and Vision Building Exercise
What goals are worth pursuing?
Corporate Social Responsibility
 Liberty means responsibility. That is why most men
dread it. (George Bernard Shaw)
The Stakeholder Perspective
 The Business Roundtable
 http://www.brtable.org/
 The Roundtable believes that the basic interests of
business closely parallel the interests of the American
people, who are directly involved as consumers,
employees,shareholders, and suppliers. Thus, chief
executives, although they speak as individuals, have
responsibilities which relate to many factors -- including
jobs, products, services, and return on investment -that affect the economic well-being of all Americans.
Milton Friedman
 "The view has been gaining widespread acceptance
that corporate officials...have a "social
responsibility" that goes beyond serving the
interests of stockholders or their members...Few
trends could so thoroughly undermine the very
foundations of our free society as the acceptance
by corporate officials of a social responsibility
other than to make as much money for their
shareholders as possible."
Adam Smith
 “It is not from the benevolence
of the butcher, the brewer, or
the baker, that we expect our
dinner, but from their regard to
their own self interest. We
address ourselves, not to their
humaninty but to their selflove, and never talk to them of
our own necessities but of their
advanatages (An Inquiry into
the Nature and Causes of the
Wealth of Nations, 1776).
Pareto Optimal
 From Wikipedia:
 Given a set of alternative allocations of, say, goods or income for a set of individuals, a
movement from one allocation to another that can make at least one individual better off
without making any other individual worse off is called a Pareto improvement. An
allocation is Pareto efficient or Pareto optimal when no further Pareto improvements
can be made. This is often called a strong Pareto optimum (SPO).
 Under certain idealized conditions, it can be shown that a system of free markets will
lead to a Pareto efficient outcome. This is called the first welfare theorem. The first
theorem is often taken to be an analytical confirmation of Adam Smith's "invisible hand"
hypothesis, namely that competitive markets tend toward the efficient allocation of
resources. The theorem supports a case for non-intervention in ideal conditions: let the
markets do the work and the outcome will be desirable. These ideal conditions, however,
collectively known as Perfect Competition, do not exist in the real world. Any particular
situation may differ from these perfect conditions in less or greater degree, and the
degree of this variation must factor into policy choices.
 Traditional welfare economics begins with the rationality
assumption. The heart of the rationality assumption is the
belief that individuals are rational utility maximizers. All
people are thought to behave in a highly rational and
rigorously logical fashion. They attempt to figure out the
consequences of every possible action they might take and
the utility they can expect to receive as a result of each
different act. Traditional economic analysis then argues
that allowing people to act freely, and to exchange goods at
will, leads to a Pareto Optimal outcome—a situation in
which no one can be made better off without making
someone else worse off….Since a long tradition in
philosophy and economics holds that interpersonal
comparisons of utility cannot be made, most economists
maintain that Pareto Optimal economic outcomes are the
best we can do to promote human well being (Presmman and
Summerfield, The Economic Contributions of Amartya Sen, Review of Political Economy, Vol 12, n1, 2000).
Is Friedman Correct?
 Is a corporate officer morally required to maximize
profit?
A Not So Simple Question in the
Stem Cell Debate…
 When does life begin?
Normative Philosophy
Deontological
Moral Worth
of Action
Teleological
Intentions
Consequences
Universalism
“Categorical
Imperative”
Utilitarianism
“The greatest good
for the greatest
number.”
Adam Smith
 The Theory of Moral Sentiment (1759) begins:
 How selfish soever man may be supposed, there are evidently some principles
in his nature, which interest him in the fortunes of others, and render their
happiness necessary to him, though he derives nothing from it, except the
pleasure of seeing it. Of this kind is pity or compassion, the emotion we feel for
the misery of others, when we either see it, or are made to conceive it in a very
lively manner. That we often derive sorrow from the sorrows of others, is a
matter of fact too obvious to require any instances to prove it; for this
sentiment, like all the other original passions of human nature, is by no means
confined to the virtuous or the humane, though they perhaps may feel it with
the most exquisite sensibility. The greatest ruffian, the most hardened violator
of the laws of society, is not altogether without it.
A First Principle is Required…
The United States‘ Constitution
WE the people of the United States, in Order to
form a more perfect Union, establish Justice,
insure domestic Tranquility, provide for the
common defence, promote the general Welfare,
and secure the Blessings of Liberty to ourselves
and our Posterity, do ordain and establish this
Constitution for the United States of America.
A conversation with
Jeffrey Immelt
The Hybrid Locomotive 2007