Johnson, Gerry - Exploring Strategy (2017, Pearson) - libgen.li

chapter 16 THE PRACTICE OF STRATEGY

SUMMARY

● The practice of strategy involves critical choices about who to involve in strategy, what to do in strategising
activity, and which strategising methodologies to use in order to guide this activity.

● Chief executive officers, senior managers, non-executive directors, strategic planners, middle managers and
strategy consultants are all involved in strategising. Their degree of appropriate involvement should depend
on the nature of the strategic issues.

● Strategising activity can involves analysing, issue-selling, decision-making and communicating. Managers
should not expect these activities to be fully rational or logical and can valuably appeal to the non-rational
characteristics of the people they work with.

● Practical methodologies to guide strategising activity include strategy workshops, strategy projects, hypothesis
testing and creating business cases and strategic plans.

WORK ASSIGNMENTS

✱ Denotes more advanced work assignments.
* Refers to a case study in the Text and Cases edition.
16.1 Go to the careers or recruitment web page of one of the big strategy consultants (such as www.

bain.com, www.bcg.com, www.mckinsey.com). What does this tell you about the nature of strategy
­consulting work? Would you like this work?
16.2 Go to the website of a large organisation (private or public sector) and assess the way it communicates
its strategy to its audiences. With reference to Section 16.3.4, how focused is the communication; how
impactful is it; and how likely is it to engage employees?
16.3 If you had to design a strategy workshop, suggest who the participants in the workshop should be and
what roles they should play in (a) the case where an organisation has to re-examine its fundamental
strategy in the face of increased competitive threat; (b) the case where an organisation needs to gain
commitment to a long-term, comprehensive programme of strategic change.
16.4✱ For any case study in the book, imagine yourself in the position of a strategy consultant and propose
an initial descriptive hypothesis (Section 16.4.3) and define the kinds of data that you would need
to test it. What kinds of people would you want in your strategy project team (see Sections 16.2.5
and 16.4.2)?
16.5✱ Go to a business plan archive (such as the University of Maryland’s www.businessplanarchive.org or use
a Google search). Select a business plan of interest to you and, in the light of Section 16.4.4, assess
its good points and its bad points.

Integrative assignment

16.6✱ For an organisation with which you are familiar, or one of the case organisations, write a strategic plan
(for simplicity, you might choose to focus on an undiversified business or a business unit within a
larger corporation). Where data are missing, make reasonable assumptions or propose ways of filling
the gaps. Comment on whether and how you would provide different versions of this strategic plan for
(a) ­investors; (b) employees.

522

REFERENCES

Recommended Key Readings

● For a textbook overview of practice issues in strategy, see practice: taking practices seriously’, Academy of Man-
S. Paroutis, L. Heracleous and D.N. Angwin, Practicing agement Annals, vol. 6 (2012), pp. 285–336.
Strategy: Text and cases, 2nd edn, London, Sage, 2016.
● A practical guide to strategising methodologies is pro-
● For an overview of research on the practice of strategy, vided by E. Rasiel and P.N. Friga, The McKinsey Mind,
see Eero Vaara and Richard Whittington, ‘Strategy as McGrowhill, 2001.

References

1. A theoretical basis for this pyramid can be found in 11. E. Beinhocker and S. Kaplan, ‘Tired of strategic planning?’,
R. Whittington, ‘Completing the practice turn in strat- McKinsey Quarterly, special edition on Risk and Resil-
egy research’, Organization Studies, vol. 27, no. 5 (2006), ience (2002), pp. 49–57; S. Kaplan and E. Beinhocker, ‘The
pp. 613–34; and P. Jarzabkowski, J. Balogun and D. Seidl, real value of strategic planning’, MIT Sloan Management
‘Strategizing: the challenges of a practice perspective’, Review, Winter 2003, pp. 71–6; D.N. Angwin, S. Paroutis
Human Relations, vol. 60, no. 1 (2007), pp. 5–27. and S. Mitson, ‘Connecting up strategy; are senior strategy
directors a missing link?’, California Management Review,
2. The classic statement is A. Chandler, Strategy and Structure: vol. 51, no. 3 (2009), pp. 74–94.
Chapters in the History of American Enterprise, MIT Press,
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3. S. Kaplan and E. Beinhocker, ‘The real value of strategic pp. 72–80.
planning’, MIT Sloan Management Review, Winter 2003,
pp. 71–6. 13. S. Floyd and W. Wooldridge, The Strategic Middle Man-
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14. See for example J. Balogun and G. Johnson: ‘Organiza-
5. J. Collins, Good to Great, Random House, 2001. tional restructuring and middle manager sensemaking’,
6. D.N. Angwin, S. Paroutis and S. Mitson, ‘Connecting up Academy of Management Journal, vol. 47, no. 4 (2004),
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f­oreign-policy decisions and fiascoes, Houghton Mifflin, nal of Managerial Issues, vol. 18, no. 2 (2005), pp. 147–61;
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ubiquitous nature of polarized group decision making’, in tegic influence and organizational performance’, Journal
Mark P. Zanna (ed.), Advances in Experimental Social Psy- of Management Studies, vol. 34, no. 3 (1997), pp. 465–85;
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tion: Changing While Winning, Palgrave MacMillan, 2012. pp. 337–51; S. Mantere and E. Vaara, ‘On the problem of
9. B. Ni Sullivan and Y. Tang, ‘Which signal to rely on? The participation in strategy’, Organization Science, vol. 19,
impact of the quality of board interlocks and inventive no. 2 (2008), pp. 341–58.
capabilities on research and development alliance formation
under uncertainty’, Strategic Organization, vol.11, no. 4 16. See L.S. Oakes, B. Townley and D.J. Cooper, ‘Business plan-
(2013), pp. 364–88. ning as pedagogy: language and control in a changing insti-
10. T. Powell and D.N. Angwin, ‘One size does not fit all: four tutional field’, Administrative Science Quarterly, vol. 43,
archetypes of the Chief Strategy Officer’, MIT Sloan Man- no. 2 (1997), pp. 257–92; and G. Mulgan, The Art of Public
agement Review, vol. 54, no.1 (2012), pp. 15–16; D.N. Strategy, Oxford University Press, 2009.
­Angwin, S. Paroutis and S. Mitson, ‘Connecting up strat-
egy; are senior strategy directors a missing link?’, Califor- 17. For theoretical discussion of advisers in strategy, see
nia Management Review, vol. 51, no. 3 (2009), pp. 74–94; L. Arendt, R. Priem and H. Ndofor, ‘A CEO-adviser model
M. Menz and C. Scheef, ‘Chief strategy officers: contingency of strategic decision-making’, Journal of Management,
analysis of their presence in top management teams’, Strate- vol. 31, no. 5 (2005), pp. 680–99.
gic Management Journal, vol. 35, no. 3 (2013), pp. 461–71;
R. Whittington, B. Yakis-Douglas and K. Ahn, ‘Strategic plan- 18. S. Appelbaum, ‘Critical success factors in the client-consult-
ners in more turbulent times: the changing job characteristics ing relationship’, Journal of the American Academy of Busi-
of strategy professionals’, 1960–2003, Long Range Planning, ness, March 2004, pp. 184–91; M. Mohe, ‘Generic strategies
forthcoming. for managing consultants: insights from client companies in
Germany’, Journal of Change Management, vol. 5, no. 3
(2005), pp. 357–65.

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chapter 16 THE PRACTICE OF STRATEGY

19. R. Whittington, B. Basak-Yakis and L. Cailluet, ‘Opening and P. Jarzabkowski, ‘Strategic planning as communica-
strategy: evolution of a precarious profession’, British Jour- tive process’, Organization Studies, vol 32, no. 9 (2011),
nal of Management, vol. 22, no. 3 (2011), pp. 531–44; D. pp. 1217–45.
Stieger, K. Matzler, S. Chatterje and F. Ladstaetter-Fuss- 30. R. Whittington, E. Molloy, M. Mayer and A. Smith,
enegger, ‘Democratising strategy’, California Management ‘Practices of strategizing/organizing: broadening strategy
Review, vol. 54, no. 2 (2012), pp. 44–68. work and skills’, Long Range Planning, vol. 39 (2006), pp.
615–29.
20. P. Jarzabkowski, M. Giulietti and B. Oliveira, ‘Building a 31. S. Cummings, U. Daellenbach and D.N. Angwin, ‘How
strategy toolkit: lessons from business’, AIM Executive brief- graphical representation helps strategy communication’,
ing, 2009. See also T. Hill and R. Westbrook, ‘SWOT analy- Strategic Management Society Special Conference, Decem-
sis: it’s time for a product recall’, Long Range Planning, vol. ber (2014) Sydney, Australia. For examples of how strategy
30, no. 1 (1997), pp. 46–52. tools and techniques may be used visually in creative ways,
see S. Cummings and D.N. Angwin, The Strategy Builder,
21. P. Jarzabkowski and S. Kaplan, ‘Strategy tools-in-use’, Stra- Wiley, 2015.
tegic Management Journal, vol. 36, no. 4 (2014), pp. 537–58. 32. G. Adamson, J. Pine, T. van Steenhoven and J. Kroupa, ‘How
story-telling can drive strategic change’, Strategy and Lead-
22. A. Langley, ‘In search of rationality: the purposes behind ership, vol. 34, no. 1 (2006), pp. 36–41.
the use of formal analysis in organisations’, Administrative 33. This section builds on the case study research of G. Johnson,
Science Quarterly, vol. 34 (1989), pp. 598–631. S. Prashantham, S. Floyd and N. Bourque, ‘The ritualization
of strategy workshops’, Organization Studies, vol. 31, no. 12
23. This draws on the attention-based view of the firm: see J. (2010), pp. 1589–618. See also B. Frisch and L. Chandler, ‘Off-
Joseph and W. Ocasio, ‘Architecture, attention and adapta- sites that work’, Harvard Business Review, vol. 84, no. 6 (2006),
tion in the multibusiness firm: General Electric from 1951 to pp. 117–26. Strategy meetings in general have been discussed by
2001’, Strategic Management Journal, vol. 33, no. 6 (2012), P. Jarzabkowski and D. Seidl, ‘The role of meetings in the social
pp. 633–60. practice of strategy’, Organization Studies, vol. 29 (2008), pp.
69–95; and I. Clarke, W. Kwon and R. Wodak, ‘A context-sen-
24. D. Kahneman, D. Lovallo and O. Siboney, ‘Before you make sitive approach to analyzing talk in strategy meetings’, British
that big decision’, Harvard Business Review, June 2011, Journal of Management, vol. 23 (2012), pp. 455–73.
pp. 41–60; D. Kahneman, Thinking, Fast and Slow, Allen & 34. L. Heracleous and C. Jacobs, ‘The serious business of play’,
Unwin, 2012. A good set of papers on ‘behavioral strategy’ MIT Quarterly, Fall 2005, pp. 19–20.
is in the Strategic Management Journal special issue on ‘the 35. P. Morris and A. Jamieson, ‘Moving from corporate strategy
Psychological Foundations of Strategic Management’, vol. to project strategy’, Project Management Journal, vol. 36, no.
32, no. 13 (2011), editors T.C. Powell, D. Lovallo and C. Fox. 4 (2005), pp. 5–18; J. Kenny, ‘Effective project management for
These ideas are also associated with the Experience Lens, strategic innovation and change in an organizational context’,
introduced in the Commentary to Part I. Project Management Journal, vol. 34, no. 1 (2003), pp. 43–53.
36. This section draws on E. Rasiel and P.N. Friga, The M­ cKinsey
25. K.M. Eisenhardt, J. Kahwajy and L.J. Bourgeois, ‘Conflict Mind, McGraw-Hill, 2001; and H. Courtney, 20/20 Fore-
and strategic choice: how top teams disagree’, California sight: Crafting strategy in an uncertain world, Harvard Busi-
Management Review, vol. 39, no. 2 (1997), pp. 42–62. ness School Press, 2001.
37. J. Walker, ‘Is your business case compelling?’, Human
26. R.A. Burgelman and A.S. Grove, ‘Let chaos reign, then rein Resource Planning, vol. 25, no. 1 (2002), pp. 12–15; M. Pratt,
in chaos – repeatedly: managing strategic dynamics for cor- ‘Seven steps to a business case’, Computer World, 10 October
porate longevity’, Strategic Management Journal, vol. 28 2005, pp. 35–6.
(2007), pp. 965–79. 38. Useful books on writing a business plan include C. Barrow, P.
Barrow and R. Brown, The Business Plan Workbook, Kogan
27. M. Beer and R.A. Eisenstat, ‘How to have an honest con- Page, 2008; and A.R. DeThomas and S.A. Derammelaan,
versation’, Harvard Business Review, vol. 82, no. 2 (2004), Writing a Convincing Business Plan, Barron’s Business
pp. 82–9; also for evidence of the effectiveness of strategy Library, 2008.
communications, see R. Whittington, B. Yakis-Douglas and 39. T.R.S. Breene, P.F. Funes and W.E. Shill, ‘The Chief Strat-
K. Ahn, ‘Cheap talk? Strategy presentations as a form of egy Officer’, Harvard Business Review, vol. 85, no. 10 (2007),
chief executive officer impression management’, Strategic pp. 84–93; D.N. Angwin, S. Paroutis and S. Mitson, ‘Connecting
Management Journal, forthcoming. up strategy; are senior strategy directors a missing link?’, Cal-
ifornia Management Review, vol. 51, no. 3 (2009), pp. 74–94.
28. D.N. Angwin, K. Mellahi, E. Gomes and E. Peters, ‘How 40. T. Powell and D.N. Angwin, ‘One size does not fit all: four
communication approaches impact mergers and acquisitions archetypes of the Chief Strategy Officer’, MIT Sloan Man-
outcomes’, International Journal of Human Resource Man- agement Review, vol. 54, no.1 (2012), pp. 15–16; M. Birshan,
agement (2014), pp. 1–28 (in press); B. Yakis-Douglas, D.N. E. Gibbs and K. Strovnik, ‘Rethinking the role of stategists’,
Angwin, K. Ahn and M. Meadows, ‘Opening M&A strat- McKinsey Quarterly, November 2014.
egy to investors: predictors and outcomes of transparency
during organizational transition’, Long Range Planning,
forthcoming.

29. This builds on M. Thatcher, ‘Breathing life into business
strategy’, Strategic Communication Management, vol. 10,
no. 2 (2006), pp. 14–18; and R.H. Lengel and R.L. Daft,
‘The selection of communication media as an executive
skill’, Academy of Management Executive, vol. 2, no. 3
(1988), pp. 225–32. For an academic account, see P. Spee

524

CaSe participative strategy process in the city of Vaasa
eXaMpLe
Marko Kohtamäki and Suvi Einola

‘Why should businesses, workers, and students choose to for the new management team to engage in a broad stra-
come to our city?’ Like universities or companies, many tegic renewal programme. The city launched a process
cities wrestle with the problem – or opportunity – of devel- of strategy making, through which strategy would not
oping and sustaining their attractiveness. This was exactly only be planned and implemented, but also continuously
the problem faced by the elected representatives and the re-invented.
managers of the apparently successful municipality of
Vaasa in western Finland as the effects of global reces- Strategy workshops and tools
sion began to impact.
In the beginning of the process, the city’s management
Searching for sustainable economic success, munic- team set the targets for the strategy work: to develop a city
ipalities aim to attract companies and a skilled work- which would be more agile and effective to face the com-
force. Municipal authorities try to develop their strategic petition for companies and workforce. To generate agility
decision-making to become more effective, agile and in the long run, the city management believed that the
responsive than competitors in meeting the expectations strategy work should be participative and involve personnel
of businesses that could establish operations in the region, throughout the city organisation. An underlying assumption
and of a workforce which could be attracted to move into was that participation would facilitate development of a
their city. However, fast and agile decision-making, in shared understanding about strategy among all stakehold-
parallel with the generic expectations of democracy and ers. However, shared strategy discussions required tools
equality, poses a unique challenge for public-sector organ- to facilitate interaction, as described by the City Mayor:
isations. The city of Vaasa took up that challenge in 2012.
‘earlier, we used a system where everything came from
The city of Vaasa top management and we made precise five-year plans,
and everything was defined; that will be the outcome,
Vaasa is a small but international university city of 67,000 when you do this. But these days, when there are so
inhabitants, with more than 100 different nationalities. many external factors which rapidly influence develop-
The city organisation employs over 6000 employees in ment in the city, you need to be able to create a basic
four different sectors (social and healthcare, education framework inside which new opportunities can emerge.’
and leisure, technical and administration). Vaasa’s top
management team was renewed almost entirely in the (City Mayor, January 2013)
2010–2012 period, when a new mayor, divisional direc-
tors, development director and human resources director To address the challenge of strategic agility and engag-
were appointed. This organisational renewal, together with ing personnel in the strategy work, a team of researchers
the pressures of an economic recession in Finland, led together with the top management team built a concept
to the city reforming its strategy and strategic decision- that could be used at different levels and divisions of the
making in pursuit of strategic agility. Vaasa municipality. The concept included use of three
particular strategic management tools: a strategic capabil-
The city was known for its energy technology and ities framework,3 a value curve4 and a strategy map.5 With
engineering manufacturing companies such as ABB the help of these tools, the city’s internal developers and
and Wärtsilä. A strong cluster of technology companies the researchers facilitated almost 100 strategy workshops
had resulted in a low unemployment rate and, by any during 2013–2015.
economic measures, the city was considered highly suc-
cessful. As a downside, long-term success had led to a The process of strategy-making was far from
situation wherein the city’s politicians and officials were straightforward. In the beginning, it was overshadowed
relatively satisfied with its current state of affairs – with by tensions between political parties, and by concerns
the attendant risks of strategic drift in a context that strat- about the economic recession. Some discussants even
egy literature describes as a learning trap.1,2 However, the questioned whether the city really needed a strategy –
recessionary economic conditions created an opportunity and, if there was to be new strategy, whether it should

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chapter 16 THE PRACTICE OF STRATEGY

be established for a longer period of time. Eventually, discussions. Facilitation helped workshop participants
Vaasa’s management concluded that the city certainly to concentrate on the key topics and issues, while the
did need rapid renewal, and that a strategy should discussions were documented (on PowerPoint slides) to
be established through a participative process and ‘materialise’ the strategy.7,8
be updated on a yearly basis. Moreover, they wanted
s­ trategy-making to become an integral part of city plan- Building on strategic capabilities
ning and budgeting, something that would also steer
investment decisions, instead of being just a separate Building on the resource-based view of a firm, the city
annual exercise. of Vaasa decided to use a strategic capabilities approach
to analyse its core resources and processes over time, to
During the strategy process, multiple tensions emerged understand upon what capabilities the city was building,
such as the dilemma between policy-making and effective and what would be needed in the near future. The strate-
strategic decision-making, the dilemma between partici- gic capabilities approach was utilised to understand the
pation and determined implementation, and the dilemma valuable, rare, inimitable, and non-substitutable (VRIN)9
between value creation and service cost-cutting. Exten- resources and processes within the city of Vaasa. The top
sive participation (100 strategy workshops across a range management team, councillors and city officials mapped
of different organisational levels) played an important the municipality’s strategic capabilities in workshops held
role in coping with and in alleviating those tensions. The early in 2013. The workshop groups utilised a mind map
strategy workshops offered a platform to develop shared technique to create a picture of the municipality’s stra-
understanding about strategy across intra-organisational tegic resources and processes with the help of internal
boundaries, enabling directors and middle managers to developers. The ideas generated were then grouped into
develop a common language building on the selected five themes and finally synthesised into five descriptions
strategy tools. Thus, throughout the process, middle (see Figure 1). This created the first sketch of the core
managers, as well as the city’s directors and politicians, capabilities at the municipality level. Similar processes
were considered as strategists.6 In strategy workshops, were later conducted at the level of divisions, business
the researchers and development planners acted as facil- areas and business units. As the process was extended to
itators and made notes and interpretations about the

WE BUILD ON

Welfare
Welfare is ensured by locally produced
high-quality basic services at every stage of life

High energy VAASA Agility
The high energy atmosphere Agility manifests in rapid
of Vaasa encourages decision-making and
experimentation. We have a innovative and effective
versatile energy industry, a service models.
wide range of educational
offerings and a strong export
expertise.

International History
Being international brings a lively The history of Vaasa builds on distinctive
urban culture, multilingualism and and beautiful architecture, in which diverse
good transport connections to the milieus, the sea and the archipelago have
world. always had an important role.

Figure 1 Strategic capabilities of the city of Vaasa

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PARTICIPATIVE STRATEGY PROCESS IN THE CITY OF VAASA

lower levels of the municipality organisation, participants to include the components of the value promise for each
were encouraged to consider how their organisational customer segment (see Figure 2). Interactions in strategy
units could support the city’s strategy while developing workshops helped to build shared understanding about
their strategic capabilities. The role of middle managers the key customers, value promises and the current state
was crucial, not only for enriching the discussions with of affairs, as well as the strategic intent in all organisa-
up-to-date knowledge and experience, but also for making tional levels.
sense of the strategic intentions and translating them into
unit level actions. Configuring the strategy map

Customer value thinking as part of the strategy The strategy map outlines the strategic logic of the city
organisation, based on four dimensions from the Balanced
The second strategy tool built on Blue Ocean strategy, Scorecard: (1) the financial perspective, (2) the customer
with a focus on the components of the customer value perspective (the components of the value promise/value
proposition. In the city of Vaasa, the value curve was used curve), (3) the process perspective and (4) resources and
to identify, develop and explain a shared understanding competencies.11 The last dimension, originally stated as
of the components of the value promise, initially at the learning and growth in the Kaplan & Norton model, was
municipality level. The city’s top management team, redefined in the Vaasa strategy map as resources and
along with councillors and city officials, utilised the tool competences, to integrate with the components of the first
to compare Vaasa’s future value promise against the cur- strategy tool. The strategy map thus builds on the outputs
rent state of affairs, instead of just comparing its value of the two strategy tools used earlier in the process –
proposition against competitors. Further, the city focused the strategic capabilities framework and the value curve.
on its current customers and operations instead of trying The strategy map became the central tool of the strategy
to search for ‘Blue Oceans’ (new non-customers).10 After development process, enabling management to describe
finding and deciding on generic key customer segments and explain the whole strategic logic of its organisation
(companies, citizens, communities), the top manage- using only the one visual image. Furthermore, if employed
ment team, councillors and officials built a value curve properly, the strategy map would simplify and summarise

Welfare HOW TO SUCCEED Economic success
Attraction

Establishment Northern Silicon ‘Building plot Multilingual Wellbeing
of new Valley of energy in an hour’ services among the
enterprises in Vibrant urban citizens
the region Cooperation culture
with energy
Competent businesses and
workforce communities

Effective logistics The safest city
in Finland

Agile and innovative
city organisation

Figure 2 Value curve of the city of Vaasa City of Vaasa (goal)
City of Vaasa (present)

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chapter 16 THE PRACTICE OF STRATEGY

VAASA – energy capital of the North

Targets Top 3 Population Employment Debt Tax revenue
in happiness growth > 75% ratio/citizen top 6 in cities
among cities > 1% < average in cities

Value proposition The happiest and Versatile urban Skilled Respect for the Interactive
healthiest citizens culture: ‘It workforce communities expertise

in the world happens in Vaasa’ Accessibility
and effective
Wide and ‘Building plot
diverse labour in an hour’ logistics

Trustworthy markets Attractive and Genuine
services functional business partnership
environments

Effective Managing service Efficient and
administration of processes well-timed
possessions decision- Long-term strategic Deliberative New, innovative
Processes and resources making business policy democratics partnership models
‘One stop
Service-oriented Customer-oriented Logistics centers Recognising Knowledge of the
and competent services shop’ principle Cooperation between the needs of capabilities and
the city, higher education communities
personnel throughout life resources in
and companies organisations
Functioning Innovation
service network capability Recognising the Strengthening
needs of the allocated
Leisure High-level companies Land assets communication Partnership
opportunities education agreements

Citizens Companies Communities

Figure 3 Strategy map of the city of Vaasa

the strategy so that it could be understood throughout benefit of forcing management to decrease the exces-
the organisation. The map also enabled management to sive number of key performance indicator (KPI) targets
ground the strategy in the organisation, ensuring that it and measures, so that only the important ones were
reflected the reality in, and the capabilities of, the munic- included on the one summary slide. From approximately
ipality – so that strategy was no longer something just 70 initial measures, the city decided to focus on just
planned and instructed by top management. The Vaasa 25 KPIs, with the five measures defined at the top of
strategy map (see Figure 3) provided an effective tool for the strategy map being considered the most vital. Thus,
discussing and defining the strategic logic of the organi- those selected prime metrics became the c­ entrepiece
sation, bringing strategy into practice. for steering the city’s strategy, comparable to the sim-
ple rules or guidelines as suggested by Eisenhardt and
Execution of the city strategy Sull.12

Finally, building on their strategy map, the city of Vaasa Towards real-time city management
developed a spreadsheet table to synthesise targets,
measures and strategic initiatives which could be sum- The city organisation began strategy work to increase
marised on just one slide (Table 1). The city wanted to strategic agility, aiming to create simple practices and
define clearly the link between strategic targets and guidelines that would steer the development work of dif-
investment plans, so that the strategy would begin to ferent divisions in the same direction – a direction defined
steer investment decisions and budgeting. The admin- by the new vision to become ‘the energy capital of the
istration believed that the management system should north’. The vision emerged during the management team
be developed to facilitate strategy implementation and sessions, reflecting discussions at different levels of the
follow-up. The use of the Excel table summary, for com- organisation, and was finally settled upon as represent-
municating across the organisation, had the additional ing an interpretation of the optimum future for Vaasa.

528

PARTICIPATIVE STRATEGY PROCESS IN THE CITY OF VAASA

Table 1 Goals, measures and strategic initiatives

Targets Measures Strategic initiatives
ATTRACTION
Attractiveness of ● Population growth/year/ ● Making energy competence visible in activities and investments
the region previous year ● Developing international innovation cluster and R&D platforms

Competitive urban ● New vacancies produced by in the city of Vaasa area
structure companies/all new vacancies ● Strengthening international accessibility through targeted

The employment ● Tax revenues investments in air, ship, rail and road traffic
rate >75% ● Number of national events ● Two multilingual campuses and learning environments:

● Amount of plot and plan safeguarding an adequate local shareholder base
reserves ● The development of city centre, and revitalisation of the islands

● Reducing carbon dioxide and beaches
emissions ● Promoting a diverse urban culture: promoting positive atmosphere,

● Proportion of employed in e.g. in the form of international congresses and events
population (18–64-year-olds)
● The available plots correspond to the demand: sticking with the
housing programme

● Review of service networks that observe a life-cycle approach

● Training a competent workforce

WELFARE ● Experienced happiness ● Directing the service network to the main functions: intensifying
● Morbidity index the library network, early childhood education and the school
Welfare among the ● Time limits in basic services network
population
and norms within elderly ● Addressing current special healthcare as a separate issue
care are kept ● Securing the integration of speciality healthcare, basic
● Amount of visitors in sports
and cultural establishments healthcare and social care: prioritising preventive work
● Costs of elderly care ● New health centre in the city: centralisation of medical services

Strengthening the ● Trust in decision-making and other possible services within healthcare
democracy ● Raising the clients’ level of involvement and responsibilities:

ECONOMIC SUCCESS ● Development of premises deliberative democracy, electronic services; utilisation of
● Costs of premises/free experience specialists in planning and developing services
Effective
administration of markets ● Renewal of representative organisation
assets ● Local regional government: clarifying the roles of area board and

The balance ● Gross capital expenditure on regional councils
between same level as depreciation ● Consolidating deliberative democracy practices into the
investments and
loans, adjustment ● The level of internal development of services
of activities financing of investments
● Processing the plot possessions
Increasing income ● Increasing annual margin ● Mapping the use of premises to increase the use; selling

Optimising the ● Income/year/previous year, unnecessary premises systematically on a tight schedule
personnel structure selling of possessions, ● Refraining from use of external rented premises
payments
● Developing management systems
● Number of personnel/ ● Strengthening of state shareholdings in federations of
services produced/other
municipalities municipalities decision-making
● Centralisation of service production and setting the quality
● The number of person-years
standards of services, cost-effective production methods
● Outsourcing and purchasing of services: cost accounting and

pricing services
● Developing IT services

● Leasing and selling plots and shares of stock within housing
● Developing chargeable services, raising the charges and tariffs

● Anticipatory personnel planning
● Reforming organisations and making the cross-administrative

processes more efficient

529

chapter 16 THE PRACTICE OF STRATEGY

Development
discussions

Personnel plan 31.12 Monitoring Strategy work in
business areas/ of the current TMT
year (measures
Challenger and actions)
groups for
strategy Resource Preparation of
plan
financial statements
Competence Budget (council)

development XII I

plans XI II
X III
(business Mayor’s budget Council’s
units, proposal strategy work

business
areas

Strategy work IX IV Monitoring
in TMT VIII V of the measures
strategy updating
monitoring
of the in council

measures

VII VI Budget frame
meetings
Budget (board)

31.7. Divisions, business areas/and

Monitoring of business units strategy work
the current
Personnel plan/ year outturn Budget frame,
business units City government

Proactive personnel plan

Figure 4 Yearly management clock.

Thus, there was no separate tool or facilitated session for city management initiated a process to integrate the KPI
discussion of the vision statement: the vision emerged measures and targets into the annual planning and evalua-
during the strategy process work, was elaborated on as tion tasks. Further action was taken to develop a manage-
it emerged, and finally ratified by the municipal parlia- ment system that would support real-time management
ment. The sequence illustrates the idea behind the way of the city’s organisation. It was recognised that man-
of working during the process – that the strategy can be agement would require further refinement of the KPIs, to
developed through the discussions, based on a shared focus on the few most relevant KPIs at the different organ-
understanding of the organisation, its capabilities and its isational levels and that could be effectively followed up.
customers: that the strategic logic emerges step-by-step However, the involvement of those different organisational
during the rounds of the strategy development process. levels – and the adoption of the strategy map as the main
tool – had facilitated development of a shared understand-
Finally, the city also developed a yearly ‘management ing about the strategic vision and strategy process across
clock’ (see Figure 4) to embed strategy updates into the the whole municipality.
annual management activities’ plan. In addition, Vaasa

530

PARTICIPATIVE STRATEGY PROCESS IN THE CITY OF VAASA

Questions   3. C . Long and M. Vickers-Koch, ‘Using core capabilities to create com-
petitive advantage’, Organisational Dynamics, vol. 24, no. 1 (1995)
1 Using the pyramid of strategy practice pp. 7–22.
(Figure 16.1), describe strategy-making in the
city of Vaasa.   4. C . Kim and R. Mauborgne, ‘How strategy shapes structure’, Harvard
Business Review, 87 (September 2009), pp. 73–80.
2 Comment on the strategy process being followed
at Vaasa. In what ways does this depart from the   5. R .S. Kaplan and D.P. Norton, ‘Having trouble with your strategy?
previous way of doing strategy? Then map it’, Harvard Business Review, vol. 78, no. 5 (2000),
pp. 167–76.
3 What are the advantages and disadvantages of
the tools used in this strategy process?   6. R . Whittington, ‘Strategy practice and strategy process: family differ-
ences and the sociological eye’, Organisation Studies, vol. 28, no. 10
4 Reflect upon the public sector context of this (2007), pp. 1575–586.
case – in what ways might there be similarities
and differences with how strategy is practiced in   7. S. Kaplan, ‘Strategy and PowerPoint: an inquiry into the epistemic cul-
‘for-profit’ contexts? ture and machinery of strategy making’, Organisation Science, vol. 22,
no. 2 (2011), pp. 320–46.
References
1. K.H. Heimeriks, ‘Confident or competent? How to avoid superstitious   8. S . Paroutis, A. Franco and T. Papadopoulos, ‘Visual interactions with
strategy tools: producing strategic knowledge in workshops’, British
learning in alliance portfolios’, Long Range Planning, vol. 43, no. 1 Journal of Management, vol. 26, no. 51 (2015), pp. S48–S66.
(2010), pp. 57–84.
2. C. Sirén, M. Kohtamäki and A. Kuckertz, ‘Exploration and exploitation   9. J .B. Barney, ‘Firm resources and sustained competitive advantage’,
strategies, profit performance and the mediating role of strategic learn- Journal of Management, vol. 17, no. 1 (1991), pp. 99–120.
ing: escaping the exploitation trap’, Strategic Entrepreneurship Journal,
vol. 6, no. 1 (2012), pp. 18–41. 10. C .W. Kim and R. Mauborgne, ‘Blue ocean strategy: from theory
to practice’, California Management Review, vol. 47, no. 3 (2005),
pp. 10 5 –121.

11. R .S. Kaplan and D.P. Norton, ‘Having trouble with your strategy?
Then map it’, Harvard Business Review, vol. 78, no. 5 (2000),
pp. 167–176.

12. K .M. Eisenhardt and D.N. Sull, ‘Strategy as simple rules’, Harvard Busi-
ness Review, vol. 79, no. 1 (2001), pp. 106–16.

531

COMMENTARY ON

paRT III STRATEGY IN ACTION

This part of Exploring Strategy has considered strategy in action. Although this is the last
part, this does not imply that action necessarily follows logically from the analysis of stra-
tegic position and choices. Chapter 1 introduced the overall model for this text, made up
of three overlapping circles of position, choices and action. The point of the model is that
strategy should not be seen as simply a linear process: the issues raised in different parts
of this text interact and inform each other. While for purposes of clarity this text presents
strategy implementation following strategy formulation in a logical sequence, in practice
this is by no means always so.

In this Commentary the strategy lenses are used to explore more deeply this key issue of
how formulation and implementation fit together. What are the practical implications of the
various lenses for how to put strategy into action?

DeSIGN LeNS

The design lens builds on the notion that thinking precedes organisational action, so that strategy is, indeed,
a linear process. Rational analysis and design are seen as powerful motivators of strategic action. In this view
therefore, managers should:

● Make the business case: the most important factor in persuading managerial colleagues and other internal and
external stakeholders is logical analysis and evidence, for example rigorous evaluation criteria (Chapter 12)
and business plans (Chapter 16).

● Exercise tight change management: strategies are best implemented through systematic use of the
levers for change (Chapter  15) and strict project management (Chapter  16), leaving little scope for
improvisation.

● Reinforce coherent action: strategies will be most effectively implemented if organisational structures and
systems are configured so that they are mutually supporting (Chapter 14).

eXpeRIeNCe LeNS

The experience lens is sceptical about the place of rationality in securing strategy implementation. Managerial
biases and organisational conservatism mean that strategy is heavily influenced by the past. The experience
lens suggests it is important to:

● Challenge biases: strategy evaluation and strategic plans (Chapters 12 and 13) are likely to be shaped by
the experience of those who do them, so it is important to challenge what may be taken for granted.

● Pick your teams carefully: if strategies are shaped by the people involved in making them, then it really matters
who is in your strategy development teams and projects (Chapter 16).

● Recognise the challenge of change: given the weight of past experience on organisations, the issues of
leadership and change (Chapter 15) are likely to be among the most important and difficult in this whole
text.

532

COMMENTARY ON PART III: STRATEGY IN ACTION

Note that:
● There is no suggestion here that any one of these lenses is better the others. The point is

to avoid using just one. Each lens gives you extra ways to explore strategic issues.
● F or a deeper understanding of this Commentary, you might want to review the Part I

Commentary, following Chapter 6, which provides a fuller introduction of the four lenses,
plus an illustrative case. The Commentary at the end of Part II is also relevant.

VaRIeTY LeNS

According to the variety lens, strategies can bubble up from the periphery and are then often selected and
retained according to semi-conscious organisational processes. Innovation does not come simply from top man-
agement command. The variety lens therefore encourages you to:
● Favour inclusiveness: in deciding who to include in strategy development (Chapter 13 and Section 16.2), inno-

vative strategies are more likely to come – and be implemented – if you include as many people as possible
from outside the usual organisational elite.
● Check the rules: the variety lens points to the power of taken-for-granted procedures, so it is wise to review
standard strategy evaluation criteria and organisational systems for hidden biases in strategy selection and
retention (Section 12.3 and Section 14.3).
● Be ready to go ‘off-plan’: given the role of surprise and spontaneity, flexibility is important and it may be
necessary to abandon at least certain aspects of the original strategic plan (Chapter 13).

DISCOURSe LeNS

Through this lens, language is highly influential on how strategies are interpreted and implemented. Discourse
can both smooth and inhibit putting strategy into action. It is important to recognise that:
● Words matter: the symbolic power of language can make the difference between success and failure, for

example in leading transformational change (Section 15.4) or justifying performance (Section 12.2).
● Organisations are political: discourses can be used to promote sectional interests, so it is important to be

sensitive to, and sometimes challenge, the language of issue-selling (Section 16.3) and alliance and network
building (Section 13.3) for example.
● Language is an entry ticket: for managers and consultants who seek to enter into the organisation’s strategy
conversation (Section 16.2), it is vital to be able to speak the organisational language of strategy fluently and
confidently.

533



Glossary

acceptability expected performance outcomes of a proposed corporate entrepreneurship refers to radical change in an
strategy to meet the expectations of the stakeholders (p. 387) organisation’s business, driven principally by the organi-
sation’s own capabilities (p. 348)
acquisition is achieved by purchasing a majority of shares in
a target company (p. 341) corporate governance is concerned with the structures and sys-
tems of control by which managers are held accountable to
Ansoff’s growth matrix is a classic corporate strategy frame- those who have a legitimate stake in an organisation (p. 141)
work for generating four basic directions for organisa-
tional growth (p. 244) corporate-level strategy is concerned with the overall scope of
an organisation and how value is added to the constituent
BCG matrix uses market share and market growth criteria businesses of the organisation as a whole (p. 10)
to determine the attractiveness and balance of a business
portfolio (p. 262) corporate social responsibility the commitment by organi-
sations to behave ethically and contribute to economic
Blue Oceans new market spaces where competition is min- development while improving the quality of life of the
imised (p. 86) workforce and their families as well as the local commu-
nity and society at large (p. 150)
business case provides the data and argument in support of
a particular strategy proposal, for example investment in cost-leadership strategy involves becoming the lowest-cost
new equipment (p. 520) organisation in a domain of activity (p. 211)

business-level strategy how an individual business competes critical success factors those factors that are either particu-
in its particular market(s) (p. 11) larly valued by customers or which provide a significant
advantage in terms of costs. (Sometimes called key success
business model describes a value proposition for customers and factors (KSF)) (p. 85)
other participants, an arrangement of activities that produces
this value, and associated revenue and cost structures (p. 229) cultural systems aim to standardise norms of behaviour within
an organisation in line with particular objectives (p. 453)
CAGE framework emphasises the importance of cultural,
administrative, geographical and economic distance (p. 290) cultural web shows the behavioural, physical and symbolic
manifestations of a culture (p. 175)
capabilities the ways in which an organisation may deploy its
assets effectively (p. 98) deliberate strategy involves intentional formulation or plan-
ning (p. 412)
co-evolution underlines the way in which partners, strategies
and capabilities need to evolve in harmony in order to differentiation strategy involves uniqueness along some
reflect constantly changing environments (p. 355) dimension that is sufficiently valued by customers to allow
a price premium (p. 215)
collaborative advantage is about managing alliances better
than competitors (p. 351) diffusion is the process by which innovations spread amongst
users (p. 324)
collective strategy how the whole network of alliances, of
which an organisation is a member, competes against rival disruptive innovation creates substantial growth by offering
networks of alliances (p. 351) a new performance trajectory that, even if initially infe-
rior to the performance of existing technologies, has the
competitive advantage how a company, business unit or organ- potential to become markedly superior (p. 328)
isation creates value for its users both greater than the costs
of supplying them and superior to that of rivals (p. 210) distinctive resources and capabilities are required to achieve
competitive advantage (p. 100)
competitive strategy how a company, business unit or organ-
isation achieves competitive advantage in its domain of diversification (related and unrelated/conglomerate) increas-
activity (p. 210) ing the range of products or markets served by an organ-
isation (p. 244)
complementor(s) an organisation is your complementor if
it enhances your business attractiveness to customers or divestiture when a business no longer fits the corporate strat-
suppliers (p. 69) egy it may be sold (p. 350)

configurations the set of organisational design elements that fit divisional structure is built up of separate divisions on the
together in order to support the intended strategy (p. 458) basis of products, services or geographical areas (p. 442)

535

Glossary 

dominant logic the set of corporate-level managerial compe- global sourcing purchasing services and components from the
tences applied across the portfolio of businesses (p. 250) most appropriate suppliers around the world, regardless
of their location (p. 284)
dynamic capabilities an organisation’s ability to renew and
re-create its strategic capabilities to meet the needs of global strategy involves high coordination of extensive activ-
changing environments (p. 119) ities dispersed geographically in many countries around
the world (p. 278)
economies of scope efficiency gains made through applying
the organisation’s existing resources or competences to governance chain shows the roles and relationships of different
new markets or services (p. 250) groups involved in the governance of an organisation (p. 143)

emergent strategy a strategy that develops as a result of a hybrid strategy a hybrid strategy combines different generic
series of decisions, in a pattern that becomes clear over strategies (p. 219)
time, rather than as a deliberate result of a ‘grand plan’
(p. 419) hypothesis testing a methodology used particularly in strat-
egy projects for setting priorities in investigating issues
entrepreneurship is a process by which individuals, teams or and options; widely used by strategy consulting firms and
organisations identify and exploit opportunities for new members of strategy project teams (p. 518)
products or services that satisfy a need in a market (p. 310)
industry a group of firms producing products and services
entrepreneurial life cycle progresses through start-up, that are essentially the same (p. 63)
growth, maturity and exit (p. 315)
inimitable resources and capabilities are those resources and
Exploring Strategy Framework includes understanding the capabilities that competitors find difficult and costly to
strategic position of an organisation (context); assessing imitate or obtain or substitute (p. 102)
strategic choices for the future (content); and managing
strategy in action (process) (p. 11) innovation the conversion of new knowledge into a new prod-
uct, process or service and the putting of this new product,
feasibility whether a strategy can work in practice (p. 399) process or service into actual commercial use (p. 317)

first-mover advantage where an organisation is better off than international strategy a range of options for operating outside
its competitors as a result of being first to market with a an organisation’s country of origin (p. 278)
new product, process or service (p. 327)
key drivers for change are the environmental factors likely
focus strategy targets a narrow segment or domain of activity to have a high impact on industries and sectors, and the
and tailors its products or services to the needs of that success or failure of strategies within them (p. 47)
specific segment to the exclusion of others (p. 216)
leadership the process of influencing an organisation (or
forcefield analysis provides an initial view of change group within an organisation) in its efforts towards
problems that need to be tackled by identifying forces for achieving an aim or goal (p. 470)
and against change (p. 476)
learning organisation an organisation that is capable of
forecasting takes three fundamental approaches based on continual regeneration from the variety of knowledge,
varying degrees of certainty: single-point, range and experience and skills within a culture that encourages
multiple-futures forecasting (p. 47) questioning and challenge (p. 420)

functional strategies how the components of an organisa- legitimacy is concerned with meeting the expectations within
tion deliver effectively the corporate- and business-level an organisational field in terms of assumptions, behav-
strategies in terms of resources, processes and people iours and strategies (p. 171)
(p. 11)
local responsiveness implies a greater need to disperse oper-
functional structure divides responsibilities according to the ations and adapt to local demand (p. 286)
organisation’s primary specialist roles such as production,
research and sales (p. 440) logical incrementalism the development of strategy by exper-
imentation and learning (p. 419)
game theory encourages an organisation to consider compet-
itors’ likely moves and the implications of these moves for macro-environment broad environmental factors that impact
its own strategy (p. 226) to a greater or lesser extent many organisations, industries
and sectors (p. 33)
gap analysis compares actual or projected performance with
desired performance (p. 377) market a group of customers for specific products or services
that are essentially the same (e.g. a particular geographical
global–local dilemma the extent to which products and market) (p. 63)
services may be standardised across national boundaries
or need to be adapted to meet the requirements of specific market segment a group of customers who have similar needs
national markets (p. 286) that are different from customer needs in other parts of
the market (p. 84)
global integration encourages organisations to coordinate
their activities across diverse countries to gain efficient market systems these typically involve some formalised sys-
operations (p. 286) tem of ‘contracting’ for resources or inputs from other
parts of an organisation and for supplying outputs to
other parts of an organisation (p. 456)

536

Glossary 

matrix structure combines different structural dimensions performance targets focus on the outputs of an organisation
simultaneously, for example product divisions and geo- (or part of an organisation), such as product quality, rev-
graphical territories or product divisions and functional enues or profits (p. 454)
specialisms (p. 444)
PESTEL analysis categorises environmental influences into
merger the combination of two previously separate organisa- six main types: political, economic, social, technological,
tions in order to form a new company (p. 341) environmental and legal (p. 34)

mission statement aims to provide the employees and planning systems plan and control the allocation of resources
stakeholders with clarity about what the organisation is and monitor their utilisation (p. 451)
fundamentally there to do (p. 7)
political view of strategy development strategies develop
network effects there are network effects in an industry as the outcome of bargaining and negotiation among
when one customer of a product or service has a positive powerful interest groups (and stakeholders) (p. 442)
effect on the value of that product for other customers
(p. 71) Porter’s Diamond suggests that locational advantages may
stem from local factor conditions; local demand condi-
objectives are statements of specific outcomes that are to be tions; local related and supporting industries; and from
achieved (often expressed in financial terms) (p. 8) local firm strategy structure and rivalry (p. 282)

open innovation involves the deliberate import and export of Porter’s Five Forces Framework helps identify the attractive-
knowledge by an organisation in order to accelerate and ness of an industry in terms of five competitive forces:
enhance its innovation (p. 321) the threat of entry; the threat of substitutes; the power of
buyers; the power of suppliers; and the extent of rivalry
opportunity recognition means recognising an opportunity, between competitors (p. 64)
circumstances under which products and services can sat-
isfy a need in the market or environment (p. 310) portfolio manager he or she operates as an active investor in
a way that shareholders in the stock market are either too
organic development is where a strategy is pursued by build- dispersed or too inexpert to be able to do so (p. 258)
ing on and developing an organisation’s own capabilities
(p. 340) power the ability of individuals or groups to persuade, induce
or coerce others into following certain courses of action
organisational ambidexterity the ability of an organisation (p. 136)
simultaneously to exploit existing capabilities and to
search for new capabilities (p. 481) profit pools the different levels of profit available at different
parts of the value network (p. 112)
organisational culture the taken-for-granted assumptions and
behaviours of an organisation’s members (p. 171) project-based structure teams are created, undertake a
specific project (e.g. internal or external contracts) and are
organisational field a community of organisations that inter- then dissolved (p. 448)
act more frequently with one another than with those
outside the field (p. 40) rare resources and capabilities are those resources and capa-
bilities that are possessed uniquely by one organisation or
organisational fit  refers to the match between the management by a few others (p.102)
practices, cultural practices and staff of characteristics
between the target and the acquiring firms (p. 346) recipe a set of assumptions, norms and routines held
in common within an organisational field about the
organisational identity refers to what members believe and appropriate purposes and strategies of field members
understand about who they specifically are as an organ- (p. 170)
isation (p. 172)
resource-based view states that the competitive advantage
organisational knowledge the collective intelligence, specific and superior performance of an organisation is explained
to an organisation, accumulated through both formal sys- by the distinctiveness of its capabilities (p. 97)
tems and the shared experience of people in that organi-
sation (p. 105) resources and capabilities of an organisation contribute to its
long-term survival and potentially to competitive advan-
outsourcing activities that were previously carried out inter- tage (p. 98)
nally are subcontracted to external suppliers (p. 254)
returns a measure of the financial effectiveness of a strategy
paradigm is the set of assumptions held in common and taken (p. 390)
for granted in an organisation (p. 172)
risk the extent to which strategic outcomes are unpredict­
parental developer seeks to employ its own central capabili- able, especially with regard to possible negative outcomes
ties to add value to its businesses (p. 261) (p. 388)

parenting advantage is the value added to businesses by cor- S-curve the shape of the curve reflects a process of initial slow
porate-level activities (p. 244) adoption of an innovation, followed by a rapid acceler-
ation in diffusion, leading to a plateau representing the
path dependency where early events and decisions estab- limit to demand (p. 325)
lish ‘policy paths’ that have lasting effects on subsequent
events and decisions (p. 164)

537

Glossary 

situational leadership strategic leaders are able to adjust their strategic position the impact on strategy of the external
style of leadership to the context they face (p. 471) environment, the organisation’s strategic capability
(resources and competences), and the organisation’s goals
social entrepreneurs individuals and groups who create inde- and culture (p. 12)
pendent organisations to mobilise ideas and resources to
address social problems, typically earning revenues but on strategy the long-term direction of an organisation (p. 4)
a not-for-profit basis (p. 316)
strategy canvas compares competitors according to their
staged international expansion model proposes a sequential performance on key success factors in order to establish
process whereby companies gradually increase their com- the extent of differentiation (p. 85)
mitment to newly entered markets as they build market
knowledge and capabilities (p. 295) strategy in action this is about how strategies are formed and
how they are implemented (p. 14)
stakeholder mapping identifies stakeholder expectations and
power, and helps in the understanding of political prior- strategy lenses ways of looking at strategy issues differently
ities (p. 136) in order to generate additional insights (p. 21)

stakeholders those individuals or groups that depend on an strategy projects involve teams of people assigned to work
organisation to fulfil their own goals and on whom, in on particular strategic issues over a defined period of time
turn, the organisation depends (p. 134) (p. 517)

statements of corporate values communicate the underlying strategy statements should have three main themes: the fun-
and enduring core ‘principles’ that guide an organisation’s damental goals that the organisation seeks, which typi-
strategy and define the way that the organisation should cally draw on the organisation’s stated mission, vision
operate (p. 8) and objectives; the scope or domain of the organisation’s
activities; and the particular advantages or capabilities it
strategic alliance where two or more organisations share has to deliver all of these (p. 8)
resources and activities to pursue a common strategy (p. 351)
strategy workshops (also called strategy away-days or off-
strategic business unit supplies goods or services for a dis- sites) these involve groups of executives working inten-
tinct domain of activity (p. 209) sively for one or two days, often away from the office, on
organisational strategy (p. 515)
strategic choices involve the options for strategy in terms
of both the directions in which strategy might move and structures give people formally defined roles, responsibilities
the methods by which strategy might be pursued (p. 13) and lines of reporting with regard to strategy (p. 439)

strategic drift the tendency for strategies to develop suitability assessing which proposed strategies address the
incrementally on the basis of historical and cultural key opportunities and threats an organisation faces
influences, but fail to keep pace with a changing envi- (p. 380)
ronment (p. 180)
SWOT provides a general summary of the Strengths and
strategic entrepreneurship combines strategy and entrepre- Weaknesses explored in an analysis of resources and capa-
neurship and includes both advantage-seeking strategy bilities and the Opportunities and Threats explored in an
activities and opportunity-seeking entrepreneurial activ- analysis of the environment (p. 115)
ities to create value (p. 309)
synergy the benefits gained where activities or assets comple-
strategic fit the extent to which the target firm strengthens or ment each other so that their combined effect is greater
complements the acquiring firm’s strategy (p. 346) that the sum of their parts (p. 251)

strategic groups organisations within an industry or sector synergy manager is a corporate parent seeking to enhance
with similar strategic characteristics, following similar value for business units by managing synergies across busi-
strategies or competing on similar bases (p. 81) ness units (p. 259)

strategic issue-selling the process of gaining attention and systems support and control people as they carry out struc-
support of top management and other important stake- turally defined roles and responsibilities (p. 439)
holders for strategic issues (p. 509)
three-horizons framework suggests organisations should think
strategic lock-in is where users become dependent on a sup- of themselves as comprising three types of business or activ-
plier and are unable to use another supplier without sub- ity, defined by their ‘horizons’ in terms of years (p. 6)
stantial switching costs (p. 71)
threshold resources and capabilities those that are needed
strategic plan provides the data and argument in support of for an organisation to meet the necessary requirements to
a strategy for the whole organisation (p. 520) compete in a given market and achieve parity with com-
petitors in that market (p. 100)
strategic planners (also known as strategy directors or cor-
porate managers) managers with a formal responsibility transactional leaders emphasise ‘hard’ levers of change such
for coordinating the strategy process (p. 501) as designing systems and controls (p. 471)

strategic planning systematic analysis and exploration to transformational leaders emphasise building a vision for their
develop an organisation’s strategy (p. 413) organisations (p. 471)

538

Glossary 

transnational structure combines local responsiveness with value net a map of organisations in a business environment
high global coordination (p. 446) demonstrating opportunities for value-creating coopera-
tion as well as competition (p. 70)
trust becomes highly important to the success of alliances
over time (p. 355) vertical (forward and backward) integration entering into
activities where the organisation is its own supplier or
turnaround strategy here the emphasis is on speed of change customer (p. 253)
and rapid cost reduction and/or revenue generation (p. 479)
vision statement is concerned with the desired future state
valuable resources and capabilities are those which create of the organisation (p. 8)
a product or a service that is of value to customers and
enables the organisation to respond to environmental VRIO analysis helps to evaluate if, how and to what extent
opportunities or threats (p. 101) an organization or company has resources and capabili-
ties that are (i) valuable, (ii) rare, (iii) inimitable and (iv)
value chain describes the categories of activities within an supported by the organisation (p. 107)
organisation which, together, create a product or service
(p. 107) Yip’s globalisation framework sees international strat-
egy potential as determined by market drivers, cost
value system comprises the set of inter-organisational links drivers, government drivers and competitive drivers
and relationships that are necessary to create a product (p. 280)
or service (p. 107)

539



Name Index

3M 7 App Annie 336 Bogle, Jack 178
4oD 407 Apple 37, 70–1, 92, 100, 103, 120, 121, Bookeen 328
7-Eleven 353 Borders bookstores 441
1688.com 58 165, 168, 215, 216, 224, 247, 249, Boston Consulting Group (BCG) 16,
Aalto University 341 259, 271, 309, 312, 320, 323–4, 327,
AB InBev 172, 173, 382 329, 335, 339, 407, 411, 465, 496 263–4, 265, 298, 426, 505, 535
ABB 288, 525 Apple iCloud 322 Botin, Ana 255
ABN AMRO 347 Apple iOS 142 Bowen Steven 246
Accenture 16 Apple iPad 351–2 Bower, Joe 423
Adam + Eve 93 Apple iPhone 202 Boxmeer, Jean-Francois van 160
Addaction 78 Apple iTunes 441 BP 36, 111, 413
Addington, Karen 487 Arcelor Mittal 140 Branson, Sir Richard 271–4, 412, 413
AdMob 344 Argos 237, 365, 366–7 Bratton, William 489
Adoboli, Kweku 457 ARM Holdings 218 Brin, Sergey 313, 434–5, 447
Agawi 344 Arthur D. Little 385, 387 British Airways 65, 163, 228, 271, 295
Agnefjäll, Peter 239 Asda 279, 365 Brito, Carlos 173
Air Berlin 353 Ashok Leyland 217 Broadcom 352
Air France 65 Atari 312 BT 351
Air Serbia 353 Australian Red Cross 99 Buckley, Tim 214
Air Seychelles 353 Autonomy 261, 341, 346 Buffett, Warren 259, 260
Airbnb 24–7, 130, 229, 231–2 Aviva 377, 378 Bungie Studios 351
Airbus 77, 92, 164, 228–9 B&Q 237 Burberry 58
AKQA 93, 94 Baidu 142, 286, 434 Burgelman, Robert 423, 429, 482
Alando 128 Bailey, Andrew 67 Burns, Ursula 472
Alcatel 346 Bain 16, 505 BZW investment bank 187
The Alchemists Ark 293 Ballmer, Steve 202, 203 Cadbury 350
Aldi 279, 365 Balogun, Julia 415, 473–4, 478–82 Cadbury Schweppes 418
Alibaba 33, 58–60, 472 Bamarang 130 Cafédirect 317
AliExpress 60 Banco Espirito Sanctu 141 Calico 447
Alipay 58 Bandit 249 Camp, Garrett 47
Alitalia 353 Barclays Bank 67, 187–9, 347, 472, 507 Campbell, Andrew 265–6, 267–8, 449–
Allergan 342, 344 Barney, Jay 97
Alno 237 Barra, Mary 487, 491 50, 452–3
Alphabet Inc. (formerly Google) 8, 146– Bartlett, Chris 445, 446, 448 Campus Network 315
Bayer CropScience 293 Canon 213
7, 197, 344, 349, 434–6, 447, 482 BBC 188, 406, 407, 409 Cantalupo, Jim 262
Amazon 4, 33, 59, 66, 106, 130, 209, 349, BBC iPlayer 406, 407, 408 Carlsberg 174, 375, 376, 377, 382, 383
Bed, Bath & Beyond Inc. 237 Carrefour 69, 279
366, 407, 430, 435, 441, 469 Beer, Michael 513–14 Carter, Ash 487
Amazon.com 316 Ben and Jerry’s 246 Carvalho-Heineken, Charlene de 160
Amazon EC2 322 Bentley 216 Casacanda 130
Amazon Kindle 328, 352 Berkshire Hathaway 250, 259, 260 Castorama 237
Amazon Pantry 366 Best Buy 128 cember.net 128
Amazon Prime 407, 408, 409 Bezos, Jeff 469 Cemex 287, 293, 297
AMC cinema chain 297, 304–6 Bharti Enterprises 357, 358 Chandler, Alfred D. 4, 11, 440, 448
AMD 218 BHP Billiton 73, 76 Channel 4/S4C 406, 409
American Motors 321 Bing 92, 94, 95, 434 Channel 5 406, 409
Anbang Insurance Group 342, 343, 346, Blackstone 259 Channel Tunnel 402
Blatter, Sepp 133 Check Point 42
360 Blecharczyk, Nathan 24–7 Cheesewright, David 279
Android 142, 202, 349, 435, 447 Blockbuster 441 Chen Zheng 304
Angry Birds 335–7 Blue Skies 285, 297 Chengshan 170
Anheuser-Busch 173 BMW 97, 167, 215, 330 Chesky, Brian 24–7
Ansoff, Harry Igor 192, 244–9, 535 Boeing 70, 77, 164, 228–9, 247, 328 Chia, Robert 490
AOL 441 Chillingo 335
Apax Partners 259

541

Name Index Eisenhardt, Kathy 197, 450 George Wimpey 342
Eisenstat, Russell A. 513–14 Geroski, Paul 328
Chipotle 261, 262 Electrolux 73 Ghemawat, Pankaj 291, 292
Christensen, Clay 328 Electronic Arts 335 Ghoshal, Sumantra 445, 446, 448
Chrysler 97, 168, 296, 321, 495, 496–7 Elf Aquitaine 413 Gibson 284
Cirrus Logic 352 Eli Lilly 322 Gilbert, Clark 423
Cisco 344, 350, 357 Ells, Steve 262 Gillette 69, 232
CityDeal 128 Elop, Stephen 202–3 Girl Meets Dress 26
The Coalition 351 EMC 42 Global Fashion Group 130
Coca Cola 66, 92, 133, 134, 216, 280, EMI 272 Goldberg, Adam 315
ENI 413 Goldman Sachs 47, 58
296, 327 Ericsson 120, 121, 284, 298, 329, 330, Google 42, 54, 59, 72, 76, 92, 94, 95, 142,
Collins, Jim 7–8, 413, 501
Collis, David 8, 10 357, 466 202, 234, 249, 286, 313, 330, 349,
Comcast 33, 339 Ernst & Young 145 407, 434–6, 446, 447, 482, 497, 499
Cooper (tyre maker) 170 Etihad Airways 353 see also Alphabet
Costolo, Dick 499 Eurostar 68 Google App Engine 322
Coupe, Mike 365, 366, 367 Eurowings 219 Google Maps 349
Crashpadder 25 Evans, Michael 58 Google Nexus 352
Crystal Dynamics 351 Expedia 27 Google Scholar 43
Crytek Studios 351 Exxon 413, 415 Google Trends 54
CSN (steel producer) 211, 213 Fab.com 130 Google Ventures 47
Cummings, Stephen 199 Facebook 37, 71, 72, 76, 94–5, 140, 146, Goold, Michael 265–6, 267–8, 449–50,
D’Aveni, Richard 221–3, 224 452–3
Dahlvig, Anders 237–8 150, 311, 312, 315, 316, 326, 342, GoPro 249
Daimler 163 349, 407, 412, 430, 435, 491 GrabTaxi 47
DaimlerChrysler 506 Facebook Messenger 72 Graham, Paul 24
Dalian Wanda 304 Fadell, Tony 349, 447 Grameen bank 317
Darwin Airlines 353 FCA 497 Grant, Rob 413
de Havilland 328 Fergusson, Alex 168 GratisPay 128
Decathlon 58 Fiat 140, 296, 495–7 Greyston Bakery 246
Deccan Airlines 160 Fidelity & Guaranty Life Insurance 343 Greyston Foundation 246
Dell 66, 232, 320, 418 Fields, Mark 174 Griffin 352
Dell, Michael 418 FIFA (Fédération International de Foot- Groupon 105, 106, 128, 316
Deutsche Bahn 506 ball Association) 133, 134 Grove, Andy 429
Deutsche Telecom 42 Financial Times 50, 187, 503 GSK 247, 284
DFS 237 Fiorina, Carly 167 Guinness Peat 341
Diageo 159, 160, 161, 382, 383 Firefox 142 H&M 150, 152, 430
Diamond, Bob 187, 188, 507 First Energy Oorja 293 Haier 297, 487
Didi Kuaidi 47, 230 Flickr 94, 233 Hall, Tony 99
Disney 4, 7, 335–6, 407 Flipkey 27 Hamel, Gary 100, 357
Dixons 128 Ford, Henry 8, 168, 320 Hardy, Cynthia 486
Doctors without Borders 277 Ford Model T 320, 321 Hart, Cees ’t 375
Dorsey, Jack 499 Ford Motor Company 33, 140–1, 168, Haspeslagh, Philippe 347
Doubleclick 435 174, 222, 280, 321, 353, 497 Hasson, Avi 42
Dow Chemicals 322 Formula One 115 Hastings, Reed 441
Dropbox 322 Fosun Group 250 Havas Worldwide 93
Drucker, Peter 4 Foucault, Michel 198 HBO Go 408
Dunsmore Chemical Company 389 Fox Broadcasting 407 HCL Technologies 418
DuPont 440 Friends Life 378 He Jinlei 59
Dyson 215 Friendster 72 Hed, Kaj 335–7
Easterbrook, Steve 262 Frito-Lay 287 Hed, Mikael 335, 336
Easy car club 26 Fujitsu 322, 323 Hed, Niklas 335
easyFoodstore 340 Gap 152 Heineken 159, 160, 284, 376, 382–3
easyGroup 252, 340 Gartner 51–2 Heinemann, Florian 129
easyJet 340 Gebbia, Joe 24–7 Helmersson, Helena 152
eBay 59, 71, 128 Geelmuyden.Kiese 113–14 Henderson, Rebecca 183–4
Eberhard, Martin 5, 7 Geely 296 Hewlett, William 312
Ecover 216, 218 General Electric (GE) 7, 232, 233, 264–5, Hewlett Packard (HP) 167, 232, 261, 298,
eDarling 128 288, 297, 312, 355, 505, 510, 514 312, 335, 341, 346, 353
Edmond, Luiz Fernando 173 General Motors (GM) 168, 321, 354, Hilton Worldwide Holdings 342
EE 351 440, 487, 491, 495, 497 Hirai, Kazuo 465, 466–7
eHarmony 128 Gentle, David 322 Hofstede, Geert 169–70
Eich, Brendan 142

542

Name Index

Holcim 342 Kamprad, Ingvar 237, 413 Master Trust Bank of Japan 145
Home Retail Group 237, 366 Kanter, Rosabeth Moss 181, 317 Matteson, Larry 181
HomeAway Inc. 27 Katsuyama, Brad 519 Mauborgne, Renée 85–7
Homebase 366 Keyhole 349 McDonald’s 133, 219, 261, 262, 296,
Honda 353, 426 Khanna, Tarun 289–90
Hong Kong Airport 402 Kim, W. Chan 85–7 353, 414
Hong Kong University of Science and King, Justin 365 MCF 159, 160
Kingfisher 237 McFarlane, John 187, 189
Technology 50 Kingfisher Airlines 159, 160, 251 McGahan, Anita 80
Hoover 327 Kodak 175, 180–1, 182, 183–4, 251, 309, McGrath, Rita 329, 415
Hope-Hailey, Veronica 473–4, 478–82 McKelvey, Bill 196
House-Trip 27 328 McKinsey & Co. 16, 41, 182, 264–5,
Hoyts 306 Kogut, Bruce 282
HSBC 67 Kotter, John 470, 483, 486, 488–9 459–60, 475, 483, 505, 506, 521
Hsieh, Tony 487 KPMG 92 McNabb, Bill 178, 214
HTC 202 Kraft 350, 418 Meaklim, Timothy 227
Hughes, Chris 312 Kroc, Ray 414 Media Markt 128
Hulu 407, 409 Kubo, Makoto 145 Mercedes 215, 216, 217, 222, 353
The Hut Group 130 Kudlich, Alexander 129–30 Mercedes Benz 92
Hyman, Richard 367 L’Oréal 484 Microsoft 8, 69, 71, 76, 77, 92, 119, 121,
Hyundai 81, 222 Lafarge 342
IBM 42, 92, 232, 322, 329, 330, 339, 350, Land Rover 296 165, 167, 202, 203, 228, 327, 344
Langley, Ann 416, 417 Microsoft Office 322
353, 357, 460, 491 Le Breton-Miller, Isabel 412 Microsoft Surface 352
IBM Consulting 16 Lefkofsky, Eric 106 Microsoft Xbox 351
Iceland Foods 218 Legendary Entertainment 297, 304–6 Miele 215
IKEA 10, 101, 103, 168, 221, 233, 237–9, Lego 318, 337 Miller, Danny 412
Lehman Brothers bank 188 Mintzberg, Henry 4, 11, 196, 199, 415
287, 288, 358, 413 Lemann, Jorge Paolo 173 Miramax 197
Indian Railways 166, 167 Levinson, Arthur D. 447 Mitsubishi Trust and Banking Corpora-
Inditex 152 Levoranta, Kati 336, 337
Infosys 99 Lewis, Michael 187 tion 145
InnoCentive 322 Lidl 210, 365 Mitsui Group 163
Instagram 72, 94, 297, 326, 499 LinkedIn 72, 142, 233 Mittal, Lakshmi 140
Intel 218, 423 Linux 454 Mittal Steel 73
Iowa Electronic Market (IEM) 54 Litchfield, Richard 78 Modi, Narendra 475
IPG 93 Litton Industries 312 Mondelēz 418
iSuppli 352 Liu, Richard 60 Mondragon Cooperative 141, 317
Isuzu 217 Lloyds 67 Montgomery, Cynthia 7
ITV 406–9 LNM (Mittal) 245, 247 Moonpig 401
ITV player/ITV Hub 406–9 Lockheed Martin 42 Moorthy, Srikantan 99
J. C. Flowers & Company 343 Logitech 352 Morrisons 365, 366, 367
J. P. Morgan 129 Lopez, Gerry 304, 305, 306 Moskovitz, Dustin 312
Jaguar 296 Lucent 346 Moss, Andrew 377, 378
Jain, Raj 358 Lufthansa 219 Motorola 120, 121, 312
Jamba 128 LVMH 250, 252 Motorola Mobility 349
Jarzabkowski, Paula 415 Lyft 47, 230 Moulson Coors 382, 383
Jayaashree Industries 319 Ma, Jack 58–9, 472 Mozilla 141, 142
JD.com 59–60 MacMillan, Ian 329, 415 Müller, Matthias 148
Jemison, David 347 MAGLEV train 402 Munger, Charlie 260
Jenkins, Antony 187, 188–9, 472 Magna 353 Muruganantham, Arunachalam 318, 319
Jet Airways 353 Mahal, Dajlit 159 Musk, Elon 5, 7, 15, 414
Jiang, Alvin 59 Mallya, ‘Sid’ 159 MySpace 72, 326
Jobs, Steve 168, 259, 312, 411 Mallya, Vijay 159–61, 251 Napster 329
John Lewis 141, 366 Manchester United 168 NASA 272
Johnson & Johnson 319 Mantere, Saku 415 National Health Service (NHS) UK 78,
Juhuasuan 58 Marchionne, Sergio 495–7
Just Retirement 341 Maris, Bill 447 175–6, 177, 227, 272, 284, 414, 458
JVP (venture capital firm) 42 Markides, Costas 327–8 Naver 286
Jysk 237 Marks & Spencer 365, 366 NBC Universal 407
Kahneman, Daniel 512–13 Marriott International 343 Nest 349, 435, 447
Kalanick, Travis 47, 230 Mason, Andrew 106, 316 Nestlé 209
Kall-Kwik 353 Netanyahu, Benjamin 42
Netflix 33, 326, 407, 408, 409, 435, 441
Netscape 142
New York Police Department 489
Newell, Gade 461

543

Name Index

NICE Systems 42 Qualcomm 352 Sky 33, 406
Nike 58, 92, 249 Questico 128 Skype 233
Nintendo 71, 351 Quinling tunnel 402 Snapchat 72
Nippon Life Insurance 145 Quinn, James 419–20 SNECMA 355
Nissan 33 Qwikster 440, 441 Softbank 58
Nixon, Hannah 67 Rampulla, Thomas 178, 214 Son, Masayoshi 58
Nodland, Ove 290 Ranbaxy Laboratories 297 Sony 70–1, 77, 228, 351, 352, 465–7
Nokia 119–20, 121, 202–3, 249, 335, 357 Rantala, Pekka 336 Sony Pictures 337
Nonaka, Ikijuro 105 Rasmussen, Jørgen Buhl 375, 377 Sorrell, Sir Martin 94
Nooyi, Indra 491 Red Cross 277 Southwest Airlines 115, 219
Nordic Industrial Park (NIP) 290 Redbox 441 SpaceX 5, 414
Northern Rock 272 Rekhi, V. K. 159 Spin Master 337
Novartis 247 Repsol 289 SponsorPay 128
O’Leary, Michael 412 Rio Tinto 73, 76 Spotify 8, 43, 229, 233, 322, 329, 407
Ocado 365, 366 Rocket Internet 128–30, 313, 316 Springstar 130
Ohlsson, Michael 239 Rockstar North 351 Stagecoach 272
Ola 48 Rolls-Royce 216, 232 Staley, James 187, 189
Old Mutual 248 Rome, David 246 Starbucks 121, 216, 314, 322
Ollila, Jorma 202 Rometty, Ginni 491 Starwood Hotels and Resorts 343, 346,
Omnicom 93 Roomorama 27
Openreach 351 Rovio Entertainent Ltd 335–7 360
Oracle 42 Royal Bank of Canada (RBC) 519 Stevens, Simon 414
Oticon 197 Royal Bank of Scotland (RBS) 67, 254, STMicroelectronics 352
Otis and Schindler 232 Stone, Biz 472
Packard, David 167, 312 255, 347 Strategic Hotels and Resorts 343
Page, Larry 313, 349, 434–6, 447 Royal Opera House, London 99 Stringer, Howard 465–6
Painting Lulu 337 Rukstad, Michael 8, 10 Subway 353
Palepu, Krishna 291 Runkeeper app 311 Swami Sukhbodhanandji 475
Palo Alto Networks 42 Ryanair 8, 103, 211, 216, 221, 341, 412 SwimOutlet.com 337
Partnership Assurance 341 SAAB 97 Takeuchi, Hiro 105
Pascale, Richard 426, 484 SAB Miller 173, 382 TalkTalk 351
Passey, Akash 217 Safeway 367 Tanaka, Hsiao 145
Patagonia (company) 155 Sainsbury 365–7 Taobao Marketplace 58, 59
Paulson, John 170 Salz, Anthony 188 Tata, Ratan 412
PayPal 5, 42, 414 Samper, Phil 181 Tata Corporation 412
Peltz, Nelson 418 Samsung 9, 20, 43, 63, 77, 140, 202, 309, Tata Group 243
PepsiCo Inc. 66, 491 Tata Motors 217, 296
Pfizer 344 336, 352, 353, 465 Tata Nano car 318
Pharmcare 115–19 Samsung Galaxy Tab 352 Tata Steel 73
Pichai, Sundar 435, 447 Samwer brothers 128–30, 313, 316 Taylor Woodrow 342
Piëch, Ferdinand 148 Sandberg, Cheryl 491 Teece, David 119, 122, 229, 328
Pinterest 94 Santander 67, 255 Teller, Astro 447
Polman, Paul 414 SAP (software company) 216 Tencent 59–60
Polytec Holding 256 Sasson, Steve 181 Termuhlen, Vera 129
Porras, Jerry 7–8, 413 Saverin, Eduardo 312 Tesco 69, 211, 282, 365
Porsche 81, 148 Scania 296 Tesla Motors 4, 5–7, 10, 11, 13, 14, 15,
Porter, Michael 4, 18–19, 64–9, 73, 85, Schein, Edgar 171–2
Schmidt, Eric 434–5 218, 320, 321, 414, 497
108, 113, 192, 198, 210–20, 221, 222, Schultz, Howard 314 Texaco 413
225–6, 245, 282–4, 292, 294, 300, Scottish Fire and Rescue Service 78 Texas Instruments 153
500, 537 Sematech research consortium 353 Thiel, Peter 26
Post-it notes 196 Sharman, Lord 378 Tickner, Robert 99
Pötsch, Hans Dieter 148 Shell 53, 111, 172, 415, 430 Time Warner 339, 407
Prahalad, C.K. 100, 292 Shibulal, S.D. 99 Ting, Wayne 315
Procter & Gamble 69, 92, 93, 167, 218, Shimaoka, Seiya 145 Tmall.com 58, 59
295, 319, 322 Siemens 357, 415, 416, 417, 506 TomTom 248–9, 261
Project A Ventures 130 Silver Lake Management 418 Toshiba 144, 145, 353
Prudential 378 Silver Rise Hong Kong Pte. Ltd 290 Toyota 280, 289, 320, 354, 497
Publicis Groupe 93 Simmonds, Adam 455 Toyota Boshoku 256
PwC 16 Simon, Herbert 193 Traidcraft 153, 317
Singapore Airlines 219, 295 Travel Advisor 27
Trian Fund Management 418

544

Tsoukas, Hari 490 Vodafone 351 Name Index
Tull, Thomas 305 Volkswagen 33, 147, 148, 149,
Tung Chee-hwa 59 WPP 93, 94
Twitter 54, 94, 140, 297, 311, 435, 249, 497 Wrack, Matt 455
Volvo 216, 217, 284, 296 Xerox 213, 454, 472
472, 499 Von Hippel, Eric 318 Xi Jinping 59
Xing 128
Uber 46, 47, 229, 230, 447 W. L. Gore & Associates 141 Y Combinator 24
UBS 456, 457 Waitrose 210–11, 365, 366 Yahoo 58, 92, 94, 95, 142, 233,
Unilever 69, 92, 93, 167, 233, 295, 297, Waldorf Astoria hotel 342, 343
Walls, Julius 246 349, 434,
299, 414 Walmart 69, 140, 232, 278–9, 288, 357, Yang, Jerry 58
Unilever Hindustan 293 Ydholm, Mikael 238–9
United Breweries Group 159–61, 251, 252 358, 439 Yelp 142
United Spirits 159, 160, 161 Wanda 297, 304–6 Yihaodian 358
University of Bologna 163 Wang Jianin 304–6 Yinmao Group 291
University of Utrecht 8 Warby Parker 155 Yip, George 280–1, 299, 538
Vale 73, 76, 291 Wärtsilä 525 York University 9, 20
Valeant Pharmaceuticals 342 WeChat 60 Young & Rubicam 93
Valley Group 110, 112 Welch, Jack 514 YouTube 43, 94, 336, 349, 406, 407, 434,
Valve 461 Wen, Winston 59
Vanguard Asset Management 177, 178, WhatsApp 72, 142, 316, 342, 499 435, 447
White, Steve 455 Yuyuan Tourist Mart 250
213, 214 Whitman, Meg 341 Zalando 130, 216
Vaswani, Ashok 507 Whitmore, Kay R. 181 Zang, Jeffrey 59
VeriSign 128 Whittington, Richard 199 Zappos 130, 487
Vermeulen, Frank 267 Whyte & Mackay 160 Zara 121, 152
Vestas 295 Wiese, Christo 273 Zhang, Daniel 58, 60
Vesterbacka, Peter 335 Williams, Rich 106 Zhang Lin 304
Vigreux, Corinne 249 Williamson, Oliver 254 Zhang Ruimin 487
Virgin Group 163, 228, 267, Wilson, David 199 Zuckerberg, Mark 72, 140, 312, 315,
Wimdu 130, 232
271–4, 412, 413 Winterkorn, Martin 148 316, 412
Visa 133, 280 Wozniak, Steve 312 Zynga 336
viversum 128

545



General Index

Page numbers in bold refer to definitions in the Glossary.

7-S framework (McKinsey) 459–60, 476 balanced scorecard approach 376, 456 IKEA case example 237–9
acceptability of strategic options 380, banking industry, barriers to entry 67 interactive price and quality strategies
barriers to entry 64, 66
387–98, 535 221–4
Accountability Test 450 banking industry 67 interactive strategies 221–9
acquisitions 341, 535 see also mergers base of the pyramid strategies 293 Strategy Clock 220–1
BCG (growth/share) matrix 263–4, 298, transient competitive advantages 233
and acquisitions buyer power 64, 68–9
activity systems 112–14 535 CAGE framework 291–2, 535
adaptability of organisations 458, 460–1 Behavioral Theory of the Firm 193–4 administrative and political distance
adaptive strategy development style 430 behaviours and organisational culture
advantage 8, 10 291
advertising industry 92–5 171, 172 cultural distance 291, 292
affect bias 512, 513 beliefs and organisational culture 171, economic distance 291, 292
Africa geographical distance 291
172 capabilities 8, 10, 535 see also resources
high-growth markets 289 benchmarking 114–15, 377
institutional voids 291 benefit corporations 141, 155, 246 and capabilities
market-based reforms 281 bias in strategic decision-making 512–13 capitalism, varieties of 46, 48
agility of organisations 460–1 Blue Oceans 86–7, 535 cartels 354, 355
alliances see strategic alliances boards of directors, influence on strategy cash flow forecasting 399
alternative futures forecasting 49–50 causal ambiguity of resources and
anchoring bias 512 149–50
Ansoff’s growth matrix 244–9, 535 born-global firms 296 c­ apabilities 103, 104
arbitrage for value creation 288 Brazil 278 champion’s bias 512, 513
Argentina, nationalisation risk 289 change context, diagnosing 473–8
Ashridge Portfolio Display 265–8 institutional environment 48 change kaleidoscope 473–6
Asia ownership models 139 charismatic leadership 471
automobile industry 288 break-even analysis 390, 391 charities sector 78, 141
cultural tendencies 169–70 BRICs economies 278 see also Brazil; chief executive officer (CEO) as strategic
market-based reforms 281
asset stripping 344, 350–1 Russia; India; China leader 500–1
Associations of Southeast Asian Nations business case 520–1, 535 China 278
business-level strategy 11, 535
(ASEAN) 281 business life cycle phase, and financial conglomerates 250
assumptions underlying organisational cultural orientations of managers
strategy 399–400
culture 171, 172, 175–6 business models 209–10, 229–34, 236–9, 291, 292
attention-based view (ABV) of strategy free market reforms 281
535 guanxi networks 41
development 423 freemium pattern 232, 233 high-growth market 289
attention of stakeholders 137–9 multi-sided platforms 233–4 institutional environment 48
attractiveness of an industry, assessment patterns 232–4 international operations 291
razor and blade pattern 232 joint ventures 296
73–4, 75 Uber illustration 230 large-scale acquisitions 342
Australia, national culture 169 value capture 229–32 local rivals to Google 286
automobile industry value configuration 229–32 multinationals 296
value creation 229–32 national culture 169, 170
barriers to entry 66 business strategy 209–10 ownership models 139–40
leading strategic change 495–7 cooperative strategy 224–6 patenting activity 43
market segments 84 cost focus strategy 210–11, 216, 218 political risks 37
price/performance ratio 68 cost-leadership strategy 210–15 political tensions with
regional strategies 288 differentiation focus strategy 210–11,
resources and capabilities 97 Japan 289
strategic groups 81 216, 218 Wanda internationalisation strategy
backward integration 253 differentiation strategy 210–11,
backward vertical integration 68 304–6
215–16, 217 choice and change research 19
focus strategy 210–11, 216, 218 citation analysis 43
game theory 226–9
generic competitive strategies 210–21
hybrid strategy 218–19, 220–1

547

General Index

civil society organisations, influence on ethical issues 153–5 culture and history, development of
businesses 35, 37 governance chain 143–4 resources and capabilities 103, 104
governance models 144–50
classical strategy development style 430 influence of boards of directors cyclical influences 168
closed innovation 321, 324 decision trees 385, 386
cloud computing 322–3 149–50 deliberate strategy 535
co-evolution 355–8, 535 principal–agent model 144, 145
cognitive bias 194 shareholder model 144, 146–7 development 411, 412–18
collaborative advantage 351–2, 535 stakeholder model 144, 147–9 managing 429–30
collective strategy 351, 535 United Breweries case example demographic changes 39, 40
collusive alliances 354, 355 design lens 21, 190–3, 199–200
communicating the strategy 513–15 159–61 Nokia case example 202–3
communities of practice 105 corporate-level strategy 10, 535 practical implications 192–3
community stakeholders 135 strategic choices 368
comparative industry structure analysis Ansoff’s growth matrix 244–9 strategy in action 532
conglomerate (unrelated) diversifica- developmental market economies 48
80–1 differentiation focus strategy 210–11,
comparator organisations 377 tion 245, 248–9
Competition Commission (UK) 247 diversification 243–4 216, 218
competitive advantage 10, 210, 535 diversification and performance 252 differentiation strategy 210–11, 215–16,
diversification drivers 250–1
sustainability 233 diversification strategies 244–9 217, 535
transient advantages strategy 233 market development 244–5, 248 Difficult Links Test 450
competitive characteristics of country market penetration 244–7 diffusion of innovation 324–6, 535
portfolio matrices 261–8
markets 292–5 product development 244–5, 247 pace of diffusion 324–5
competitive environment 33 questioning the need for 267 S-curve 325–6
competitive forces 64–74 related diversification 244, 245 digital native generations 40
competitive internal markets 456–8 vertical integration 253–6 directional policy (GE–McKinsey)
competitive rivalry, defining factors 64, Virgin Group 271–4
corporate parenting matrix 264–5
65 Berkshire Hathaway 260 directors as strategists 500–1
competitive strategies 535 parental developer role 258, 261, 262 discounted cash flow (DCF) 390, 392–3
parenting advantage 351 discourse lens 21, 190–1, 197–200
generic strategies 210–21 portfolio manager role 258–9, 260
interactive strategies 221–9 synergy manager role 258, 259, 261 implications for strategy 199
competitiveness, green products 45, 46 value-adding activities 256–7 Nokia case example 202–3
competitors value-destroying activities 256, strategic choices 369
industry analysis 81–7 strategy in action 533
mutual forbearance 250–1 257–8 diseconomies of scale 212
retaliation from 245, 247 corporate planners 538 disruptive innovation 328–9, 535
complementary capabilities 105 corporate social responsibility (CSR) distinctive resources and capabilities
complementary services 216
complementors 69–71, 535 150–3, 535 100, 535
complexity of resources and capabilities corporate venturing 330 as basis of competitive advantage
cost–benefit analysis 394–6
103 cost-focus strategy 210–11, 216–18 101–7
complexity theory 195, 196 cost-leadership strategy 210–15, 535 distribution channel access 66
configurations 439–40, 458–61, 535 country and market characteristics distributive justice 350
diversification (related and unrelated/
McKinsey 7-S framework 459–60 289–92
organisational adaptability 458, 460–1 critical approach to strategy 190–1, conglomerate) 535
organisational agility 460–1 and performance 252
organisational resilience 460–1 199–200 conglomerate (unrelated) 245, 248–9
organisational slack 461 critical success factors (CSFs) 85–6, 248, corporate-level strategy 243–4
confirmation bias 512 definition 244–5
conflict management 513 535 drivers 250–1
conglomerate (unrelated) diversification cross-subsidising businesses 251 horizontal integration 253
crowdsourced forecasts 54 related 244, 245
245, 248–9 crowdsourcing 322 strategies 244–9
consortium alliances 353 cultural analysis 19 divestiture (divestment) 350–1, 535
context for strategy 18–19, 20–1 cultural dimensions 169–70 divisional structure 442–4, 535
control systems in organisations 175, 177 cultural distance between countries 291, dominant design in industries 320
cooperative strategy 224–6 dominant logic 250, 536
coordinated market economies 46, 48 292 duopoly industries 77
core competences 100 cultural systems 451, 453–4, 535 dynamic capabilities 119–23, 536
corporate culture see organisational cultural web 175–9, 476, 535 Eastern Europe, free market reforms 281
culture ecological elements in the business envi-
culture
corporate entrepreneurship 340–1, 535 changing cultural attitudes 40 ronment 44–5, 46
corporate governance 141–50, 535 definitions 168–9 ecological issues
geographically-based cultures
approaches to CSR 150–3 emotivity of 45, 46
benefit corporations 155 169–70
see also organisational culture

548

General Index

level of certainty 45, 46 suitability 380–7 forward integration 253
visibility of 45, 46 evolutionary theory 195, 196 France 282
economic cycles 38–9, 168 exchange rates 38
economic distance between countries experience curve 212 political risks 37
experience curve effects 66 small worlds 43
291, 292 experience lens 21, 190–1, 193–5, franchising 295, 296
economic environment 38–9 free markets 281
economic forecasting 38 199–200 freemium business model pattern 232,
economic performance measures 376 implications for strategy 194–5
economic profit 394 Nokia case example 202–3 233
economic stakeholders 134, 136 strategic choices 368 frugal innovation 318–19
economic value added (EVA) 394 strategy in action 532 functional strategies 11, 536
economies of scale 66, 211–12 explicit organisational knowledge 105 functional structure 440–2, 536
economies of scope 250, 536 Exploring Strategy Framework 11–16,
ecosystems around a platform or com- game theory 226–9, 536
536 gap analysis 375, 377–9, 536
pany 323 strategic choices 11–12, 13–14, 15 GE–McKinsey (directional policy)
strategic alliances 352 strategic position 11–13, 15
effectiveness measures 376 strategy in action 11–12, 14–15 matrix 264–5
emergent strategy 536 export strategy 286, 287 gearing (leverage) of a company 388
development 411, 419–25, exporting 295–6 geographic sources of advantage 277–8,
managing 429–30 externally imposed strategy 418
emerging-country multinationals 296 extra-industry effects 68 282–5
employee-owned firms 141 geographical clustering of industries 40
entrepreneurial businesses 140 family businesses 140–1 geographical distance between countries
entrepreneurial life cycle 314, 536 fast second strategy 327–8
entrepreneurship 309–17, 536 feasibility of strategic options 380, 291
and innovation 309 geographically-based cultures 169–70
definition 310 399–401, 536 Germany
opportunity creation view 331 Feasibility Test 450
opportunity recognition 310–13 financial analysis 390, 392–3 institutional environment 48
requirements for new ventures 310–13 locational advantages 283
Rovio’s business model 335–7 assumptions 393 stakeholder model of governance
serial entrepreneurs 316 cost–benefit analysis 394–6
stages of entrepreneurial growth discounted cash flow (DCF) 390, 147–9
two-tier board structure 148, 149
314–15 392–3 Ghana, high-growth market 289
steps in the entrepreneurial process payback period 390, 392 global integration 286, 536
problem of specificity 393 global–local dilemma 286, 287, 536
313–15 problem of uncertainty 393 global sourcing 284, 536
strategic entrepreneurship 309 return on capital employed (ROCE) global strategy 278, 287, 536
entry mode strategies 277, 278, 295–7 GLOBE survey 291
born-global firms 296 390, 392 governance 13 see also corporate
emerging-country multinationals 296 shareholder value analysis (SVA)
exporting 295–6 governance
franchising 295, 296 393–4 governance chain 143–4, 536
joint ventures 295, 296 financial control strategy style 452–3 graphene technology 43, 44
licensing 295, 296 financial feasibility of strategic options green macro-environmental issues 44–5,
staged international expansion model
399–400 46
295–7 financial motives for M&A 344 green products, competitiveness
wholly owned subsidiaries 295, 296 financial risk assessment 388
environments 33 firm-specific advantages 277–8, 282 45, 46
methods of analysis 34 first-mover advantages and disadvantages growth matrix 244–9
ethics 133
of individuals and managers 153–5 237–8, 536 heuristics 195
European Commission 247 Flexibility Test 450 higher order strategic themes 113
European Union (EU) 281, 288 focus strategy 210–11, 216, 218, 536 historical analysis 167–8
evaluating strategies 375–403 football, different recipes for success 170
acceptability 380, 387–98 forcefield analysis 476–8, 536 chronological analysis 167–8
feasibility 380, 399–400 forecasting 34, 48–50, 536 cyclical influences 168
four qualifications to consider 401–3 historical story-telling 168
gap analysis 375, 377–9 alternative futures forecasting 49–50 key events and decisions 168
integrating resources 401 approaches 49–50 history
ITV case example 406–9 crowdsourced forecasts 54 as a managerial resource 167
people and skills required 400–1 directions of change 50 influence on strategy 163–4
performance assessment 375, 376–9 economic forecasting 38 path dependency 164–7
SAFe criteria 375, 380–403 inflexion points 50 why it is important 164–8
megatrends 50 holding companies 443
range forecasting 49 horizontal integration 253 see also
single-point forecasting 49
weak signals 50 diversification
foreign direct investment 284 hybrid business strategy 218–19, 220–1,

536
hypercompetitive environments 233

549

General Index

hypercompetitive industries 77 definition 317–18 trade barriers 278, 281
hypothesis testing 518–19, 536 diffusion 324–6 transnational strategy 287, 288
ideas lens see variety lens dilemmas 317–24 types of strategy 277, 278, 286–8
identity, defining through discourse 198 disruptive innovation 328–9 use of local partners 290
incumbency advantages 66 frugal innovation 318–19 Wanda case example 304–6
incumbents, response to innovators indicators of innovative activity 43 wholly owned subsidiaries 295, 296
lead user approach 318 international value system 284–5
328–30 market pull approach 318–20 internationalisation, and performance
India 278 open innovation 321–4
process innovation 320–1 299
challenges in Indian banking 475 product innovation 320–1 internationalisation drivers 277, 278–81
high-growth market 289 technology push approach 318, 320
institutional environment 48 innovators competitive drivers 280, 281
large-scale acquisitions 342 and imitators 237–30 cost drivers 280–1
low-cost IT location 284 fast second strategy 327–8 government drivers 280, 281
multinationals 296 first-mover advantages and disadvan- market drivers 280
political risks 37 Yip’s globalisation framework 280–1
individualism–collectivism cultural tages 237–8 intrapreneurship 309, 316, 330
incumbents’ responses to 328–30 investment (Juglar) cycle 38–9
dimension 169–70 institution-based view of strategy 300 Israel
Indonesia 278 institutional environment 46, 48 small world of hi-tech 42
industry 63, 536 institutional logics 170, 183 Unit 8200 42
industry analysis 18–19, 62–3 institutional voids 291 Italy, locational advantages 282, 283
intangible assets/resources 98, 250 Japan
competitive forces 64–74 integration, importance in strategy 11 automobile industry 288
definition of industry 63 interactive price and quality strategies institutional environment 48
definition of market 63 locational advantages 283
definition of sector 63 221–4 national culture 169
Porter’s Five Forces Framework 64–74 interest rates 38 ownership models 139
industry and sector analysis internal market systems 451, 456–8 political risks 37
Blue Oceans 86–7 internal stakeholders 135 political tensions with China 289
competitors 81–7 international strategies 536 joint ventures 284, 295, 296, 353
critical success factors (CSFs) 85–6 Juglar (investment) cycle 38–9
defining the industry 71, 73, 75 arbitrage for value creation 288 key drivers for change 48, 52, 536
industry types and dynamics 74–81 base of the pyramid strategies 293 key performance indicators (KPIs) 454–6
market segments 84–5 Blue Skies example 285 key strategic issues 207
opportunities and threats 87 born-global firms 296 key success factors (KSF) 360–1, 535
Red Oceans 86 comparing countries 289–92 Kitchin (stock) cycle 38–9
steps in an analysis 75 competitive characteristics of country knowledge, organisational knowledge
strategic gaps 86–7
strategic groups 81–4 markets 292–5 105–7
strategy canvas 85–6 components of 277–8 Kuznets (infrastructure) cycle 38–9
industry environment 33 consideration of institutional voids lead user approach to innovation 318
industry life cycle 79–80 leadership 470, 536
industry structure dynamics 77–81 291 leadership styles 471–2
charity sector 78 cultural distance 291, 292
comparative industry structure anal- definition 278 charismatic leadership 471
emerging-country multinationals 296 situational leadership 471, 482
ysis 80–1 entry mode strategies 277, 278, 295–7 transactional leadership 471
convergence 77 export strategy 286, 287 transformational leadership 471
industry life cycle 79–80 exporting 295–6 women leaders 491
public-sector organizations 78 franchising 295, 296 leading strategic change
industry types geographic sources of advantage automobile industry 495–7
duopoly industries 77 diagnosing the change context 473–8
hypercompetitive industries 77 277–8, 282–5 key elements 469
monopoly industries 76 global–local dilemma 286, 287 middle managers 470–1
oligopoly industries 76–7 global strategy 287 strategic leadership roles 470–1
perfectly competitive industries 77 institution-based view 300 top managers 470
inflexion points, effects on forecasting 50 joint ventures 295, 296 learning curve effect 212
informational justice 350 licensing 295, 296 learning organisation 420, 536
infrastructure (Kuznets) cycle 38–9 locational advantage 282–4 legal barriers to entry 66
inimitable resources and capabilities 101, market selection 277, 278, 289–95 legal environment 45, 46, 48
multi-domestic strategy 286–7 legitimacy 147, 149, 191, 193, 197–8, 536
102–4, 536 political risk 289 and ecological issues 45, 46
initial public offering (IPO) 316 reality of local differences 278–9
innovation 191, 195, 197, 536 regional strategies 288
roles of subsidiaries 297–9
and entrepreneurship 309 staged international expansion model
closed innovation 321, 324
295–7

550

General Index

within organisational fields 171 financial motives 344 opportunities and threats 87, 101
levels of strategy 10–11 key success factors 360–1 opportunity creation, view of entrepre-
liberal market economies 46 legal constraints 247
licensing 295, 296 managerial motives 344–5 neurship as 331
life cycle analysis 385, 387 motives for 342–5 opportunity recognition 310–13, 537
liquidity of a company 388 strategic motives 342–4 organic development 339, 340–1, 537
local responsiveness 286, 536 strategy over time 350–1
locational advantage 282–4 timing of 342 buy, ally or DIY decision making
lock-in 164–7 types of 341 359–60, 365–7
logical incrementalism 419–21, 536 mergers and acquisitions (M&A) pro-
long-term orientation, cultural dimen- organisation-specific advantages 277–8,
cesses 345–51 282
sion 169–70 due diligence 345–7
macro-environment 33, 536 integration of acquisitions 345, organisational ambidexterity 481–2, 537
macro-environment analysis 18 organisational contexts 20–1
347–50 organisational culture 171–4, 537
forecasting 34, 48–50 negotiations 345, 346–7
key drivers for change 48, 52 organisational fit 346 analysing culture 19, 175–80
methods of analysis 34 organisational justice 350 and identity 172–4
PESTEL analysis 34–48 premium for control 347 behaviours 171, 172
scenario analysis 34, 51–4 strategic fit 346 beliefs 171, 172
make or buy decision 111 target choice 345–6 components 171–2
managerial ambition, and inappropriate vicious cycle of overvaluation 347 control of 451, 453–4
winner’s curse 347 control systems 175, 177
diversification 251 Mexico 278 cultural web 175–9
managerial hubris effect 344–5 microfoundations of capabilities 122–3 culture clashes at Barclays Bank 187–9
managers middle managers, as strategists 502, definition 171
definitions of culture 168–9
middle managers as strategists 502, 504–5 geographically-based cultures 169–70
504–5 MINTs economies (Mexico, Indonesia, influence on strategy 163–4, 174–5
organisational fields 170–1
motives for M&A 344–5 Nigeria and Turkey) 278 organisational structures 175, 176–7
organisational history as a resource mission statement 7–8, 537 paradigm 171, 172, 175–6
mobile telephone industry, dynamic power structures 175, 176
167 rituals and routines 175, 176
roles in leading strategic change 470–1 capabilities 120–1 stories 175, 176
strategy work 16–18 money cost of capital 392 strategic drift 180–4
top managers as strategists 500–1 monopoly industries 76 subcultures 172
managing deliberate strategy 429–30 multi-domestic strategy 286–7 symbols 175, 176
managing emergent strategy 430 multinational corporations 20 taken-for-granted assumptions 171,
market 63, 536 multinational structures 445–8
Market-Advantage Test 449 multi-sided platforms business model 172, 175–6
market decline as diversification driver values 171–2
pattern 233–4 versus institutional logics 183
251 music industry, disruptive innovation organisational fields 40–3, 170–1, 537
market development strategy 244–5, 248 and ecological issues 45, 46
market environment 33, 35 328–9 categorisation by members 170
market niche 84 net present value (NPV) 390, 392–3 legitimacy associated with norms 171
market penetration strategy 244–7 network effects 71, 72, 537 recipes used within 170
market segments 84–5, 536 networks 40–3 organisational fit 346, 537
market selection 277, 278, 289–95 organisational identity 172–4, 537
market systems 451, 456–8, 536 broker positions 40–1 organisational justice 350
mathematical game theory 226–9 central hub positions 40–1 organisational knowledge 537
matrix structure 444–5, 537 density 40–1, 43 as basis of competitive advantage
McKinsey 7-S framework 459–60, 476 small worlds 41–3
media coverage of new technology 43 new product announcements 43 105–7
megatrends 50 Nigeria 278 organisational learning 482
merger, definition 341, 537 high-growth market 289 organisational networks 40–3
mergers and acquisitions (M&A) 339, political risks 37 organisational slack, and adaptability
non-hierarchical structures 461
341–51 nonmarket environment 35 461
acquiring as a capability 361 North American Free Trade Agreement organisational structures 175, 176–7
bandwagon effects 345 organisational targets 377
buy, ally or DIY decision making (NAFTA) 281, 288 organisational values 45, 46
not-for-profit organisations 20–1, 141 organisations 4, 7
359–60, 365–7
cycles of activity 342 social entrepreneurship 316–17 business environment 33–4
definition of acquisition 341 objectives 8, 537 support for resources and capabilities
definition of merger 341 oil industry, effects of fall in oil prices 37
developing an M&A function 361 oligopoly industries 76–7 101, 104–5
divestiture (divestment) 350–1 open innovation 321–4, 537 outsourcing 111, 112, 254–6, 537
owners as stakeholders 139–41
ownership models 139–41

551

General Index

paradigm of an organisation 171, 172, portfolio matrices 261–8 research and development (R&D) budg-
175–6, 537 BCG matrix 263–4 ets 43
paralysis by analysis 509, 513 directional policy (GE–McKinsey)
parental developer role of the corporate matrix 264–5 resilience of organisations 460–1
parenting matrix (Ashridge Portfolio resource allocation process (RAP) view
parent 258, 261, 262, 537 Display) 265–8
parenting advantage 243, 244, 351, 537 of strategy development 423
Parenting Advantage Test 449 portfolio of strategic business units resource-based view (RBV) of strategy
parenting matrix 265–8 (SBUs) 243–4
partnering 112 19, 97, 537
partnerships 141 power 136, 537 resources and capabilities of an organi-
patenting activity 43 and attention 137
path dependency 103, 104, 164–7, 537 and strategy discourse 198 sation 537
payback period 390, 392 indicators of 136–7 activity systems 112–14
People Test 449–50 of stakeholders 136–7 benchmarking 114–15
perfectly competitive industries 77 causal ambiguity 103, 104
performance assessment 375, 376–9 power/attention matrix 137, 138 complexity of 103
power distance cultural dimension components and characteristics
complexities of 379
gap analysis 375, 377–9 169–70 98–100
performance comparisons 377 power structures in organisations 175, diagnosing 107–19
performance measures 376 distinctive resources and capabilities
performance target 537 176
performance targeting systems 451, levers for strategic change 486, 488 100–7
present value of receiving 393 dynamic capabilities 119–23
454–6 price/performance ratio 68 effects of culture and history 103, 104
PEST framework see PESTEL analysis principal–agent model, governance issues importance in organisations 98–100
PESTEL analysis 34–48, 537 inimitability 101, 102–4
144, 145 key issues 97
BP analysis 36 principal–principal problem 146 management approaches 122–3
comparing countries for entry 289–90 prisoner’s dilemma game 226–9 microfoundations of 122–3
ecological elements 44–5, 46 procedural justice 350 organisational knowledge 105–7
economics 38–9 process innovation 320–1 organisational support 101, 104–5
key drivers for change 52 product development strategy 244–5, 247 path dependency 103, 104
legal environment 45, 46, 48 product innovation 320–1 rarity 101, 102
political element 35, 37 product stewardship 44 resource-based view (RBV) 97
social elements 39–43 profit before interest and tax SWOT analysis 115–19
technological environment 43–4 threshold resources and capabilities
pharmaceutical industry, strategic groups (PBIT) 390
profit pools 112, 537 100
82–3 project-based structures 448, 537 value 101–2
planning systems 451–3, 537 public limited companies 139, 140 value chain 107–11
platform leadership 323 public sector organisations 20–1, 78 value system 107, 110, 110–11
political distance between countries 291 VRIO analysis 107, 108, 109, 114
political environment 35, 37 QUANGOs 505 VRIO criteria 101–7
political risk analysis 37 strategic alliances 353 responsibility, ecological issues 45, 46
political stakeholders 134, 135 publicly-quoted companies 139, 140 retaliation from incumbents 66
political systems, levers for strategic publicly-traded companies 139, 140 retrenchment 247
purpose of strategy 7–8, 133 return on capital employed (ROCE) 390,
change 486, 488 pyramid of strategy practice 499–500
political view of strategy development 392
QUANGOs 505 returns (to stakeholders) 390, 392–7, 537
422, 537 quick and dirty testing (QDT) 518 risk 537
pollution control 44, 46
Porter’s Diamond 282–4, 537 range forecasting 49 associated with vertical integration
Porter’s Five Forces Framework 64–74, rare resources and capabilities 101, 102, 254

191, 292, 294–5, 537 537 political risk analysis 37
applications 65 rationality of strategy management related to strategic options 388–90,
competitive rivalry 64, 65
complementors 69–71 191–2, 197 391
defining the industry 71, 73, 75 razor and blade business model pattern risk assessment 388–90, 391
implications 73–4 risk aversion 513
network effects 71, 72 232 risk bias 512–13
power of buyers 64, 68–9 real options approach to strategy evalua- risk-return trade-off 388
power of suppliers 64, 69 risk-spreading by diversification 251
threat of entry 64, 66, 67 tion 396–7 rituals and routines in organisations 175,
threat of substitutes 64, 66, 68 real options portfolios 329, 330
portfolio manager 537 realised strategy 411 176
role of the corporate parent recipes used within organisational fields changing 485
rule-of-three system 461
258–9, 260 170, 537 Russia 278
Red Oceans 86 free market reforms 281
Redundant Hierarchy Test 450 ownership models 139
regional strategies 288 political risks 37
related diversification 244, 245

552

General Index

S-curve for innovation diffusion 325–6, STEEPLE framework see PESTEL strategic decision-making 512–13
537 analysis affect bias 512, 513
SAFe evaluation criteria 375, 380–403 anchoring bias 512
stock (Kitchin) cycle 38–9 benefits of constructive conflict 513
acceptability 380, 387–98 stories, and organisational culture 175, champion’s bias 512, 513
feasibility 380, 399–401 confirmation bias 512
four qualifications 401–3 176 conflict management 513
suitability 380–7 story-telling, the organisation’s history risk bias 512–13
saliency bias 512 saliency bias 512
Saudi Arabia, political risks 37 168 ways to reduce bias 512–13
scenario analysis 34, 51–4 strategic alliances 339, 351–8, 538
scenario cube 51, 52 strategic direction 4, 6–7
scenario planning 484 access alliances 354 corporate-level strategy 243–4
scenarios, screening strategic breakdown of 357–8
buy, ally or DIY decision making strategic drift 180–4, 194, 430, 538
options 384 strategic entrepreneurship 309, 538
scope of an organisation 8, 10, 243–4 359–60, 365–7 strategic fit 346, 538
sector, definition 63 co-evolution 355–8 strategic gaps 86–7
sector analysis see industry analysis collaborative advantage 351–2 strategic groups 81–4, 538
sector environment 33 collective strategy 351 strategic inflection points 429
segmentation of markets 84–5 collusive alliances 354, 355 strategic issue-selling 509–10, 538
sensitivity analysis 388, 389 complementary alliances 354 strategic leader role 412–13, 414
shaping strategy development style 430 consortium alliances 353 strategic leadership roles 470–1
shareholder model of governance 144, developing an alliance capability 361 strategic lock-in 71, 538
ecosystems 352 strategic management 7
146–7 equity alliances 353 strategic misrepresentation 402
shareholder value analysis (SVA) 393–4 joint ventures 353 strategic motives for M&A 342–4
single-point forecasting 49 key success factors 360–1 strategic options 18, 19
situational leadership 471, 482, 538 motives for 353–5 strategic plan 520–1, 538
slack resources, and adaptability 461 non-equity alliances 353 strategic planners 501–2, 503, 538
small businesses 20 processes 355–8 strategic planning 19, 428, 538
small worlds 41–3 scale alliances 353–4
social entrepreneurs 153, 309, 316–17, termination 357–8 strategy style 452–3
trust 355–8 systems 413, 415–18
538 types of 353 strategic position 11–13, 15, 30–1, 538
social environment 39–43 strategic ambitions 30 strategic potential 30
social networks 40–1 strategic business units (SBUs) 209, 219, strategising activities 499–500,
social/political stakeholders 134, 135
social responsibility see corporate social 243–4, 538 508–15
strategic change communicating the strategy 513–15
responsibility paralysis by analysis 509, 513
sociograms 40–3 adaptation 478, 479 strategic decision-making 512–13
South America challenges in Indian banking 475 strategic issue-selling 509–10
diagnosing the change context 473–8 strategy analysis 508–9
cultural tendencies 169 evolution 478, 481–2 SWOT analysis 508–9
market-based reforms 281 extent of the change 478–9 strategising methodologies 499–500
South Korea, low-cost location 284 nature of the change process 478–9 strategists 499
Specialised Cultures Test 450 problems in the process 489–90 chief executive officer (CEO)
staged international expansion model problems of formal change pro-
500–1
295–7, 538 grammes 489–90 directors 500–1
stakeholder groups 134–6 reconstruction 478, 479–80 middle managers 502, 504–5
stakeholder mapping 136–9, 476, 538 revolution 478, 480–1 open strategy approach 506–8
turnaround 478, 479–80, 482 skills required 521
attention to issues 137–9 types of 478–82 strategic planners 501–2, 503
blockers and facilitators 138 what formal programmes forget 490 strategy consultants 505–6, 510, 511
indicators of power 136–7 strategic change levers 483–9 top managers 500–1
stakeholder model of governance 144, challenging the taken for granted 484 types of strategist 521
change levers in action 487 who to involve in strategy making
147–9 changing operational processes and
stakeholders 7, 133, 134–41, 538 500–8
routines 484–5 strategy 4–7, 538
building coalitions 138–9 compelling case for change 483–4
communicating the strategy 513–15 management of symbols 485–6 and structural fit 448–50
influence on strategic decisions 134 power and political systems 486, 488 as design see design lens
involvement under different CSR stakeholder groups 486 as discourse see discourse lens
timing of change 488 as experience see experience lens
approaches 150–3 visible short-term wins 488–9 as variety see variety lens
owners as 139–41 strategic choices 11–12, 13–14, 15, critical exploration 190–1,
reaction to a proposed strategy 398
start-up incubators 128–30 206–7, 538 199–200
state involvement in businesses 35, 37 strategic control strategy style 452–3
state-owned enterprises 139–40 strategic customers 69
statements of corporate values 8, 538

553

General Index

strategy (continued) strategy practice pyramid 499–500 planning systems 451–3
levels of 10–11 strategy process 18, 19
long-term perspective 4–6 tacit collusion between companies 224
participative strategy in the city of tacit organisational knowledge 105
strategy analysis 508–9 Vaasa 525–30 Taiwan 282
strategy analysts see strategic planners tangible resources 250
strategy and performance research 19 strategy projects 517–18, 538 task forces 448
strategy-as-practice research 19 strategy statements 8–10, 538 tax advantages of M&A 344
strategy canvas 85–6, 538 strategy work 16–18 technological environment 43–4
strategy checklist 15 strategy workshops 515–17, 538 technological stakeholders 134, 135
Strategy Clock 220–1 structural ambidexterity 482 technology roadmaps 43–4
strategy consultants 16–18, 505–6, 510, structural types 440–50 technology standardisation 281
Thailand, low-cost location 284
511 divisional structure 442–4 threats and opportunities 87, 101
strategy content 18, 19 effectiveness in relation to strategies three-horizons framework 6, 538
strategy context 18–19, 20–1 threshold resources and capabilities 100,
strategy development, tight and loose 448–50
functional structure 440–2 538
systems 482 matrix structure 444–5 top managers as strategists 500–1
strategy development processes 411–30, multinational structures 445–8 Total Quality Management 219
project-based structures 448 total shareholder return (TSR) 393–4
434–6 transnational structures 445–8 TOWS matrix 118–19
adaptive strategy development style structures 439–40, 538 trade barriers 278, 281
non-hierarchical structures 461 transaction cost framework 254–6
430 structural change at Sony 465–7 transactional leaders 471, 538
Alphabet case example 434–6 studying strategy 18–19 transformational leaders 471, 538
attention-based view (ABV) 423 subcontracting, costs and benefits 254–6 transnational strategy 287, 288
classical strategy development style subsidiaries transnational structures 445–8, 538
black holes 298 trends over time 377
430 contributor role 298 triple bottom line 153, 376
deliberate strategy development 411, implementer role 298 trust 355–8, 538
roles in an international portfolio Turkey 278
412–18 turnaround strategies 478, 479–80, 482,
emergent strategy development 411, 297–9
strategic leader role 297–8 539
419–25 substitutes, threat of 64, 66, 68
externally imposed strategy 418 suitability of strategic options 380–7, 538 ultimate customers 69
Honda case 426 bases of competitive advantage 384–5 unbundling of acquisitions 344
implications for managing 425–30 decision trees 385, 386 uncertainty avoidance, cultural dimen-
influence of different contexts 427–9 life cycle analysis 385, 387
learning organisation view 420 ranking of possible strategies 382–4 sion 169–70
logical incrementalism 419–21 screening through scenarios 384 understanding, shaping through dis-
political view 422 supplier power 64, 69
product of structures and systems supply channel access 66 course 198
sustainability 153 United Kingdom
423–5 sustainable development 45, 46
realised strategy 411 switching costs 68, 69, 71, 164 financial services industry 289
resource allocation process (RAP) Switzerland, locational advantages 282, institutional environment 46
ownership models 139
view 423 283 shareholder model of governance 146
role of the strategic leader 412–13, 414 SWOT analysis 87, 115–19, 508–9, 538 United States
shaping strategy development style symbols challenges of political distance 291
cultural orientations of managers 291,
430 management of 485–6
strategic planning role 428 of organisational culture 175, 176 292
strategic planning systems 413, 415–18 synergy 251, 538 institutional environment 46
top management role 428 synergy manager 538 locational advantages 282, 283, 284
visionary strategy development style role of the corporate parent 258, 259, moving work to low-cost locations 284
national culture 169–70
430 261 ownership models 139
strategy directors 538 see also strategic systems 439–40, 451–8, 538 shareholder model of governance 146
unrealised strategy 429
planners cultural systems 451, 453–4 unrelated (conglomerate) diversification
strategy in action 11–12, 14–15, 372, 538 direct controls 451
strategy lenses 21, 538 see also design indirect controls 451 245, 248–9
input control systems 451
lens; discourse lens; experience lens; internal markets 451, 456–8 valuable resources and capabilities
variety lens output control systems 451 101–2, 539
strategy maps 456, 458 performance targeting systems 451,
strategy methodologies 339, 515–21
business cases 520–1 454–6
hypothesis testing 518–19
strategic plans 520–1
strategy projects 517–18
strategy workshops 515–17

554

General Index

value-adding activities of corporate varieties of capitalism 46, 48 inimitable resources and capabilities
­parents 256–7 variety lens 21, 190–1, 195–7, 199–200 101, 102–4

value capture 88, 229–32 implications for strategy 196–7 organisational support 101, 104–5
value chain 107–11, 282, 284, 539 Nokia case example 202–3 rare resources and capabilities 101, 102
value configuration 229–32 strategic choices 369 valuable resources and capabilities
value creation 229–32 strategy in action 533
Venezuela, political risks 37 101–2
arbitrage 288 venture capitalists 128–30, 315–16 war gaming 226–7
value curves 85–6 vertical dis-integration 254 weak signals, role in forecasting 50
value-destroying activities of corporate vertical integration 253–6, 539 wealth distribution 39
comparison with outsourcing 254–6 what-if analysis 388, 389
parents 256, 257–8 forward and backward integration 253 whistle-blowers 153
value-destroying diversification drivers risks associated with 254 whole life costs 213
Vietnam, low-cost location 284 wholly-owned subsidiaries 295, 296
251 vision statement 8, 539 women leaders, leadership styles 491
value innovation 96 visionary strategy development style 430 World Trade Organization 281
value net 70, 539 voluntary sector, strategic alliances 353 Yip’s globalisation framework 280–1,
value network 88 VRIO analysis 107, 108, 109, 114, 539
value system 107, 110, 110–11, 282, 284, VRIO criteria 101–7, 191, 384–5, 539 539

539
value to customers 101
values and organisational culture 171–2

555



Acknowledgements

We are grateful to the following for permission to H. Grinyer and J.C. Spender; Figure 7.5 adapted from
reproduce copyright material: The Essence of Competitive Strategy, Prentice Hall
(Faulkner, D. and Bowman, C. 1995), with permission
Figures from Pearson Education Ltd; Figure 7.6 adapted from
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sion of Texere Publishers, a member of the Perseus Free Press, a Division of Simon & Schuster, Inc. Copy-
Books Group and copyright © 1999, 2000 McKinsey right © 1994 by R. D’Aveni and R. Gunther. All rights
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Information and Technology in Society, Business and Business School Publishing Corporation. All rights
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Free Press (Porter, M.E. 1998), with the permission of adapted from Corporate Level Strategy, Wiley (Goold,
The Free Press, a Division of Simon & Schuster, Inc. M., Campbell, A. and Alexander, M. 1994), © 1994
Copyright © 1998 by M.E. Porter. All rights reserved; Wiley. Reproduced with permission of John Wiley &
Figure 3.3 from The Right Game, Harvard Business Sons, Inc.; Figure 9.3 adapted from The Competitive
Review, July-August, pp. 57–64 (Brandenburger, A. and Advantage of Nations, The Free Press (Porter, M.E.
Nalebuff, B. 1996), copyright © 1996 by the Harvard 1990), with the permission of The Free Press, a Divi-
Business School Publishing Corporation. All rights sion of Simon & Schuster, Inc. Copyright © 1990 by
reserved; Figures 4.4, 4.5 and 7.2 adapted from Com- M.E. Porter. All rights reserved; Figure on page 269
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Performance, The Free Press (Porter, M.E. 1985), with Inc. (Ansoff, H. 1988), reprinted by permission of John
the permission of The Free Press, a Division of Simon Wiley & Sons, Inc., and the Ansoff Family Trust; Fig-
& Schuster, Inc. Copyright © 1985 by M.E. Porter. ure 9.5 from In the eye of the beholder: cross-cultural
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stakeholder mapping approach, Construction Manage- S. and McGrath, R. 2003), copyright © 2003 by the
ment and Economics, 21(8), pp. 841–8 (Newcombe, R. Harvard Business School Publishing Corporation. All
2003), figure 3, reprinted by permission of the pub- rights reserved; Figure 9.7 from Managing across Bor-
lisher, Taylor & Francis Ltd, http://www.tandfonline. ders: The Transnational Solution, Harvard Business
com; Figure  5.5 adapted from David Pitt-Watson, School Press (Bartlett, C.A. and Ghoshal, S. 1989) pp.
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558

EXPLORING STRATEGY

ELEVENTH EDITION

‘Exploring Strategy has had a world-wide impact as a text in strategic management and unusually has achieved
this notable position with the very best of European scholarship and writing. The approach to strategy is inclusive;
the writing is direct and accessible; the case examples are vivid and contemporary; and the material in the book is
always being updated.’
Andrew Pettigrew, Emeritus Professor of Strategy and Organisation, Saïd Business School, University of Oxford

‘Exploring Strategy stands out as an excellent textbook on strategic management that covers all the basics yet,
unlike other texts, adds onto this a coverage of strategy process and the practice of strategy. This coverage of both
analytical and managerial aspects of strategy makes it a highly relevant text for both undergraduate and MBA
students. A welcome inclusion to this edition is the feature “Thinking Differently” which is about cutting-edge theory
related to each chapter of the book.’
Julia Balogun, Professor of Strategic Management and Director of University of Liverpool Management School

‘The book provides a very well-structured, comprehensive, and clear overview of the art of strategic management,
using many up-to-date real-world case studies from renowned companies and providing useful online resources
for teachers. As such, the book is engaging, accessible and certainly one of the most “classroom ready” texts on
strategy. It is a must-have for students, scholars, and practitioners.’
Dr Florian Kapmeier, Professor for Strategy and International Project Management, Reutlingen University, ESB Business
School

‘When teaching and learning with this book, strategy comes alive! Exploring Strategy addresses the fascinating
issues of “strategy in action”. As strategic change is everywhere nowadays, this textbook provides unique and
invaluable insights for the men and women who are daily involved in the processes and practice of strategizing.’
Linda Rouleau, Professor of Management, HEC Montréal

With over one million copies sold worldwide, Exploring Strategy has long been the essential
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The eleventh edition of Exploring Strategy has been comprehensively updated to help you:

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