chapter 9

• Competition per se is as old as history. It dates back to biblical times when Jacob competed against Esau to get his birthright from their father, Isaac.
• To outwit Esau, their mother, Rebekah sent Esau to the woods so that Jacob could get the blessing of his dying father, Isaac.
• The beginnings of European conquests likewise vividly portray the spirit of competition. Nations like Spain, Portugal, Netherlands, and England competed to colonize the world.
• History tells that the Dutch ruled Indonesia for more than 300 years as the Spaniards did in the Philippines. The British governed India, Malaysia, and Hong Kong while the Portuguese occupied Macau.
• Whether from an individual or national perspective, the beginnings of strategy are evident in these examples.
• Strategy


  In the past, tactics and schemes were informally implemented as when a person competed in a game, when an organization engaged in business, or when a government went to war. Their actions imply an approach, popularly called strategy.
• Strategy


  Through the years, strategy took a more formal character through individuals who studied its nature, its varied forms, and modes of implementation.
• Strategists


  • Sun Tzu
  • Niccolo Machiavelli
  • Alfred Chandler
  • Igor Ansoff
  • Peter Drucker
  • Michael Porter
  • Kenichi Ohmae
  • Noel Tichy
  • Peter Senge
  • Henry Mintzberg
  • Arie de Geus
• Strategy has been implemented since the early times, either implied or explicitly stated, but in all instances, strategy was deliberate.
• In the past, strategies were implemented in every facet of living - in ruling people, in doing trade, in bartering of goods, in working to build houses, roads, and buildings, and in planning a family, among others.
• Today, heads of states, government leaders, corporate executives, business leaders, and administrators make use of strategies seriously.
• Strategy


  A plan formulated and implemented with the sole purpose of attaining set goals and objectives.
• Strategy


  A concept, a tool, and people
• Strategy as a concept

  • Intellectual elasticity
  • Mindset
  • Learning
  • Natural capital
  • Intellectual capital
• Intellectual elasticity


  Flexibility and adaptability in coming up with realistic responses to changing situations
• Mindset


  A frame of mind and an attitude that is deliberate and monitored
• Strategy as learning


  A process of maintaining and improving performance experientially, through innovation and differentiation, continuous improvement, continuous adaptation, and benchmarking
• Natural capital


  Natural resources, living systems, and ecosystem services that create competitive advantage
• Intellectual capital


  Knowledge that is significant and outstanding, over and above common knowledge
• Intellectual capital


  Knowledge that is significant and outstanding, beyond just common knowledge
• Intellectual capital


  • Synergistic confluence and interrelationships of the organization's valued resources
  • Intangible
  • Can be felt and assessed
  • Critical to attaining organizational success
• Mere possession of common knowledge


  May or may not assure survival
• Ownership of intellectual capital

  Generates more than just survival, propels the organization to become monopolistic, creates leverage, establishes dominance and brings about comparative advantage
• Components of intellectual capital

  • Intellectual property ownership
  • Human resource assets
  • Market assets
  • Infrastructure assets
• Possession of intellectual capital is strategy
• Information technology


  A potent concept of strategy as a tool, has had a radical development in the past 30 years, makes work easier, more efficient, and simpler
• Process improvement


  1. Entire workforce empowered to initiate minute improvements confined to specific functions

  2. Creates unique impact on work culture
• Process redesign


  1. Goes beyond just initiating changes, involves serious and thorough study of the company's direction, goals, and plans in light of customer expectations and business profitability

  2. Greater need for information technology

  3. Higher degree of change and risk

  4. Resistance to change common
• Business process re-engineering (BPR)

  1. Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance

  2. Role of technology is marked and significant

  3. Expectations of results are higher

  4. Time for substantial redesign is longer

  5. Costs for improvement are bigger
• Balanced scorecard


  A strategy template which illustrates four important perspectives: learning and growth, customer, internal process, and financial
• Perspectives of the balanced scorecard

  • Learning and growth
  • Customer
  • Internal process
  • Financial
• Strategy maps


  • Visual tools used in identifying strategic goals, designing strategies, and implementing them
  • Connect the intangible assets to value-creating processes
  • Show the four perspectives of the balanced scorecard in four layers
• Using the balanced scorecard is a strategy
• People as strategy


  • Effective management and leadership
  • Creativity
  • Monopolistic intellectual capital
• Effective management


  Sets objectives, organizes and motivates people, communicates with subordinates, measures output and performance, develops people
• Individuals who exemplify strategy as effective management and leadership

  • Alfred Sloan
  • Harold Geneen
  • Lee Iacocca
  • Jack Welch
• Alfred Sloan's teachings on professional management
• Management


  A profession where the professional should subordinate his own interests to those of the clients
• Professionals


  • Do not make decisions by opinions and preferences but should be according to facts
• Job of a professional manager

  Not to like people, not to change people. It is only performance that matters.