Strategy Making as - PowerPoint Presentation

Slide1

Strategy Making as iterated Processes of resource allocation

By

Tomo

Noda & Joseph L. Bower

Presented by YS

KwakSlide2

Contents

Introduction

B-B Process Model

Bell South & U S WEST

Conclusion- Propositions I, II, III

Contribution

CritiqueSlide3

introduction

Discussion of strategy:

Chandler, 1962 & Andrews, 1971

Ansoff

, 1965 & Porter, 1980

Allison, 1971

Barnard, 1938 & Simon, 1945 &

Cyert

and March, 1963 & Crozier, 1964

Schumpeter, 1934 & Nelson and Winter, 1982 & Thompson, 1967 &

Pfeffer

and

Salancik

, 1978 & Miles, 1982

Mintzberg

and McHugh, 1985

Lindbloom

, 1959Slide4

B-B Process Model

Bower-

Burgelman

process model of strategy making:

3 organizational levels & 4

subprocesses

Levels: bottom, middle, and top managers

Subprocesses

: Definition and Impetus (

interlocking bottom-up core processes

) & Structural and Strategic context determination (

overlaying corporate processes

)

Goal:

-To explore critical gap and extend B-B model, then describe the research design and field study based on extended version of B-B model to explain propositions

-Using TWO firms (1983 – 1994)Slide5

Bell South & U S WEST

Similarities:

1. Start point- same age

2. Technology

3. Market- great deal of uncertainty

Result

: largest vs. smallestSlide6

Bell South & U S WEST

Different strategies

1

st

period (1983 – 1985)

Different business strategies taken by business unit officers

Different management style: Traditional centralized vs. Decentralized – different business development practices

Different structural context in financial grip on business

units

Different strategic contexts

Different business plans for business unitsDifferent operating results in relatively similar local marketsSlide7

Bell South & U S WEST

2

nd

period

(1986 – 1989)

Strategic forcing by business-unit officers

Strategic building by middle managers

Confidence building by top corporate executives

Influence of corporate contexts on the impetus processSlide8

Bell South & U S WEST

3

rd

period (1989 – 1994)

More vs. Less investment to wireless communications businesses

Different cellular operations by middle managers

Different top manager’s conductionsSlide9

Conclusion- Propositions I

Top managers exercise a critical influence on the strategic initiatives of lower-level managers by setting up the context in which these managers make decisions and take actions

Both strategic and structural contexts influence bottom-up initiatives in the definition process, and shape resource allocation in the impetus process in a way what virtually defines a course of business development and subsequent emergence of a corporate strategy for the new business

A firm’s structural context is relatively stable over time, and its persistent impact on the subsequent business development process constrains the discretion of top managers who may want to change the firm’s course of actions in response to the development of technology and the market for a new businessSlide10

Propositions II

In the case of a new business development that involves a high degree of uncertainty, the iterations of the resource allocation process generate a pattern of escalation or

deescalation

of a firm’s strategic commitment based on early results from operations that confirm or disconfirm the premises of the first

investment

and the credibility of the championsSlide11

Propositions III

In the case of successful business development, continuous, incremental learning of top managers during business development, and the resulting fine turning of strategic context, shift resource allocation and precede the articulation or change in official statements of the corporate strategy for the new businessSlide12

Contribution

Shows that role of middle managers is significant factor for success

Comparative longitudinal study

May help strategy researchers in the iterative approach and formal strategy making processSlide13

CritiqueWhy are Bell South and U S WEST different so far?

Is it able to achieve same success when we use same strategies that Bell South had been conducted?

If it is not, then why?

Is it the best strategies only in high uncertain market condition?Slide14

THANK YOU