Strategic Management: Evaluation and Execution

[Pages:402]Strategic Management

Evaluation and Execution v. 1.0

This is the book Strategic Management: Evaluation and Execution (v. 1.0). This book is licensed under a Creative Commons by-nc-sa 3.0 ( 3.0/) license. See the license for more details, but that basically means you can share this book as long as you credit the author (but see below), don't make money from it, and do make it available to everyone else under the same terms. This book was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz () in an effort to preserve the availability of this book. Normally, the author and publisher would be credited here. However, the publisher has asked for the customary Creative Commons attribution to the original publisher, authors, title, and book URI to be removed. Additionally, per the publisher's request, their name has been removed in some passages. More information is available on this project's attribution page (). For more information on the source of this book, or why it is available for free, please see the project's home page (). You can browse or download additional books there.

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Table of Contents

About the Authors................................................................................................................. 1 Acknowledgments................................................................................................................. 3 Dedications ............................................................................................................................. 4 Preface..................................................................................................................................... 5 Chapter 1: Mastering Strategy: Art and Science ............................................................ 7

Defining Strategic Management and Strategy.......................................................................................... 10 Intended, Emergent, and Realized Strategies ........................................................................................... 18 The History of Strategic Management....................................................................................................... 25 Understanding the Strategic Management Process ................................................................................. 35 Conclusion .................................................................................................................................................... 39

Chapter 2: Leading Strategically ..................................................................................... 40

Vision, Mission, and Goals........................................................................................................................... 43 Assessing Organizational Performance ..................................................................................................... 53 The CEO as Celebrity .................................................................................................................................... 60 Entrepreneurial Orientation....................................................................................................................... 70 Conclusion .................................................................................................................................................... 77

Chapter 3: Evaluating the External Environment........................................................ 78

The Relationship between an Organization and Its Environment.......................................................... 81 Evaluating the General Environment ........................................................................................................ 85 Evaluating the Industry............................................................................................................................. 102 Mapping Strategic Groups ........................................................................................................................ 118 Conclusion .................................................................................................................................................. 122

Chapter 4: Managing Firm Resources........................................................................... 123

Resource-Based Theory ............................................................................................................................. 127 Intellectual Property ................................................................................................................................. 139 Value Chain................................................................................................................................................. 149 Beyond Resource-Based Theory: Other Views on Firm Performance .................................................. 156 SWOT Analysis............................................................................................................................................ 160 Conclusion .................................................................................................................................................. 163

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Chapter 5: Selecting Business-Level Strategies .......................................................... 164

Understanding Business-Level Strategy through "Generic Strategies" .............................................. 168 Cost Leadership .......................................................................................................................................... 172 Differentiation............................................................................................................................................ 177 Focused Cost Leadership and Focused Differentiation .......................................................................... 187 Best-Cost Strategy...................................................................................................................................... 199 Stuck in the Middle.................................................................................................................................... 207 Conclusion .................................................................................................................................................. 212

Chapter 6: Supporting the Business-Level Strategy: Competitive and Cooperative Moves................................................................................................................................... 213

Making Competitive Moves ...................................................................................................................... 217 Responding to Competitors' Moves ......................................................................................................... 228 Making Cooperative Moves....................................................................................................................... 235 Conclusion .................................................................................................................................................. 241

Chapter 7: Competing in International Markets........................................................ 242

Advantages and Disadvantages of Competing in International Markets............................................. 246 Drivers of Success and Failure When Competing in International Markets........................................ 259 Types of International Strategies............................................................................................................. 269 Options for Competing in International Markets................................................................................... 273 Conclusion .................................................................................................................................................. 282

Chapter 8: Selecting Corporate-Level Strategies ....................................................... 283

Concentration Strategies .......................................................................................................................... 288 Vertical Integration Strategies................................................................................................................. 296 Diversification Strategies .......................................................................................................................... 302 Strategies for Getting Smaller .................................................................................................................. 310 Portfolio Planning and Corporate-Level Strategy .................................................................................. 315 Conclusion .................................................................................................................................................. 318

Chapter 9: Executing Strategy through Organizational Design.............................. 319

The Basic Building Blocks of Organizational Structure ......................................................................... 323 Creating an Organizational Structure ..................................................................................................... 331 Creating Organizational Control Systems ............................................................................................... 348 Legal Forms of Business ............................................................................................................................ 362 Conclusion .................................................................................................................................................. 366

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Chapter 10: Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social Responsibility ................................................................................... 368

Boards of Directors .................................................................................................................................... 371 Corporate Ethics and Social Responsibility............................................................................................. 379 Understanding Thought Patterns: A Key to Corporate Leadership? .................................................... 388 Conclusion .................................................................................................................................................. 397

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About the Authors

Dave Ketchen

Dave Ketchen serves as Lowder Eminent Scholar and Professor of Management at Auburn University. An award-winning educator, Ketchen has taught Strategic Management, Principles of Management, and Franchising. His research interests include strategic management, entrepreneurship, research methods, and strategic supply-chain management. He has published more than one hundred articles in journals such as Administrative Science Quarterly, Academy of Management Journal, and Strategic Management Journal. He has served on thirteen editorial boards, including those of Academy of Management Review, Strategic Management Journal, and Journal of Management Studies. He has served as associate editor for seven journals, including Academy of Management Journal, Journal of International Business Studies, and Organizational Research Methods. Ketchen serves on the teaching team for the Entrepreneurship Bootcamp for Veterans with Disabilities at Florida State University, has acted as an expert witness, and has assisted a variety of private and public sector entities with strategic planning. He is the former chair of the board of directors for the Alabama Launchpad (a statewide business plan competition) and currently serves on the Steering Committee for the Michelin Development?East Alabama (an entity that provides low-interest loans to fuel job creation).

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About the Authors

Jeremy Short

Jeremy Short is the Rath Chair in Strategic Management at the University of Oklahoma. His award-winning teaching includes classes such as Principles of Management, Strategic Management, Entrepreneurship, and Management History. Short's research focuses on the determinants of firm and organizational performance. He has published more than fifty articles in such journals as Strategic Management Journal, Organization Science, Personnel Psychology, Organizational Behavior and Human Decision Processes, Academy of Management Learning and Education, and Journal of Management Education, among others. He is an associate editor for the Journal of Management and serves on the editorial board of Organizational Research Methods. He also coauthored the first Harvard Business School case in graphic novel format.

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Acknowledgments

We would like to thank the following reviewers. Their insightful feedback and suggestions for improving the material helped us make this a better text:

? Sonny Ariss, University of Toledo ? Keith Brigham, Texas Tech University ? Kalyan Chakravarty, California State University, Northridge ? Brian Connelly, Auburn University ? Carol Decker, Tennessee Wesleyan College ? Dr. Robert Edmonds, Maritime College, State University of New York ? Jeffrey Fahrenwald, Rockford College ? Barbara Good, Ursuline College ? Samuel Gray, New Mexico State University ? Cynthia Hanevy, Buena Vista University ? Thomas Little, University of Texas at Arlington ? Franz Lohrke, Samford University ? Aaron McKenny, University of Oklahoma ? Elouise Mintz, Saint Louis University ? Todd Moss, Oregon State University ? Jason Myrowitz, University of Wyoming ? Erin Nelson, DePaul University ? Don Neubaum, Oregon State University ? Pankaj Patel, Ball State University ? Paul Tomko, Cuyahoga Community College ? Thomas Towle, University of New Hampshire ? John Upson, University of West Georgia ? David Vequist, University of the Incarnate Word ? Miles Zachary, Texas Tech University ? Gregory Zerovnik, University of La Verne

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