Current trends in strategi c m anagement
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Current Trends in Strategi c M anagement. The New E conomy New Directions in Strategic Thinking Redesigning the Organization New Modes of Leadership. OUTLINE. The Turbulent 21 st Century. Collapse of New Economy Dot.com bubble bursts TMT recession. Corporate Scandals

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Current trends in strategi c m anagement l.jpg
Current Trends in Strategic Management

  • The New Economy

  • New Directions in Strategic Thinking

  • Redesigning the Organization

  • New Modes of Leadership

OUTLINE


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The Turbulent 21st Century

  • Collapse of New Economy

  • Dot.com bubble bursts

  • TMT recession

  • Corporate Scandals

  • Enron, WorldCom, Parmalat

  • Jack Welch’s retirement package

  • War

  • Invasion of Afghanistan

  • & Iraq

  • Civil wars in Congo, Liberia, Sudan, Somalia

  • International

  • competition intensifies

  • China as Workshop of the World

  • Outsourcing to LDCs

  • The Curse ofTerrorism

  • Sept. 11, 2001

  • Suicide bombings in

  • Israel, Iraq, Saudi Arabia, Turkey, Afghanistan

  • Decline of

  • Multilateralism

  • Collapse of Doha round

  • Trade wars between US, EU, China

  • Weakening of UN

Age of

Disbelief

  • Fear of Disease

  • SARS, Mad Cow, Bird Flu

Unstable Currencies

US$ declines by >50% against Euro 2002-04



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Return on Equity of US Manufacturing Hour Worked, 1990-2006

Corporations, 1990-2003

Source: US Bureau of the Census


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The value of mergers and Hour Worked, 1990-2006

acquisitions worldwide

Source: Thomson Financial Securities Data


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Directions in Strategic Management Practice Hour Worked, 1990-2006—Trends of the 1990s

  • Key Trends of the 1990s:

  • Quest for shareholder value

  • Adjusting to increased

  • turbulence & more intense competition

  • Major Themes of Business Strategy:

  • Cost cutting—squeezing

  • overhead,business process re-

  • engineering, increasing labor

  • productivity

  • Outsourcing/refocusing/

  • divestment

  • Performance management and

  • incentive alignment

  • Influential Strategy Concepts:

  • Modern financial analysis

  • —shareholder value, economic profit,

  • option theory

  • Core competences and intangible

  • assets

  • Dynamically competitive markets

  • —“hypercompetition”

  • Competitive advantage through

  • alliances, networks, and standards


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Forces Shaping Company Strategies 2001-04 Hour Worked, 1990-2006

  • The Business

  • Environment

  • Uncertainty

  • Stalling of economic

  • liberalization

  • Intense competition

Future Sources of Profit

Limits of downsizing/cost cutting

Where are future sources of

profit?

  • Concepts & Theories

  • Resources & capabilities as

  • basis for competitive advantage

  • Knowledge-based theory

  • of the firm

  • Option theory

  • Complexity theory

Technology

Continued advances in ICT

  • Demands of society

  • Social & environmental responsibility

  • Ethics & fairness

  • Quest for meaning


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Emerging Developments Hour Worked, 1990-2006

  • STRATEGY

  • Multiple competitive advantages/multiple capabilities

  • Innovation / New Product Development / New

  • Business Development

  • Alliances & networks

  • ORGANIZATION

  • STRUCTURE

  • Reconciling flexibility

  • & integration

  • Modular structures

  • Multidimensional structures

  • Informal organization &

  • self-organization

  • MANAGEMENT SYSTEMS

  • Knowledgemanagement

  • (incl. best-practice transfer)

  • Redesigning incentive systems

  • Rethinking performance management

  • Capturing human creativity


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The Need to Redesign Organizations Hour Worked, 1990-2006

THE PAST

THE FUTURE

Emphasis on control

Emphasis on co-ordination

Single performance goal

Multiple performance goals

Decisions located centrally

Decisions located where relevant knowledge exists

Simple structures,

unified line of command

Multidimensional structures

Diffused authority, but clear responsibilities

Organization by design

Self organization


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Emerging Organizational Forms Hour Worked, 1990-2006

Organizing for capability Shifting emphasis of organization

developmentdesign from control to coordination

From unitary to parallelSeparate coordination structures for

structuresdifferent processes.E.g. 3M’s product

development structure; separate structures

for TQM and change management

Process-based Organizing around business processes

organizations Organizing around corporate processes

- entrepreneurial process

- competence building process

- renewal process

Project-based organization E.g. engineering cos., consulting firms, also

manufacturing cos. e.g.Oticon

Network and virtual E.g. electronics in Silicon Valley, clothing

organization and packaging equipment in Italy


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New Models of Leadership Hour Worked, 1990-2006:What Competencies do Top Managers Need?

  • THE REQUIRED

  • COMPETENCIES OF

  • BUSINESS LEADERS

    • business literacy

    • creativity

    • cross-cultural

    • effectiveness

    • empathy

    • flexibility

    • proactivity

    • problem-solving

    • relation-building

    • teamwork

    • vision

THE LEADERSHIP NEEDS

OF ORGANIZATIONS

The ability to:

  • build confidence

  • build enthusiasm

  • cooperate

  • deliver results

  • form networks

  • influence others

  • use information


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