

080115L - STRATEGY

Background material by Professor Omar Hasan Kasule Sr. for year 3 Semester 2 PPSD session on 15th January 2008

Strategy is a rational approach to management of uncertainties involving assessment of the internal and external environments, forecasting the future, thinking forwards and reasoning backwards, and preparing for various hypothetical scenarios by establishing strategic objectives and formulating plans to accomplish them.  Strategic management deals with sudden changes in the environment and is likened to shooting at a moving target when riding on a galloping horse. 

Action planning is laying down the detailed tactical or operational plans. Effective plans are specific, action-oriented, flexible, and consistent with organizational long-term goals and objectives.

Plans can be classified according to different criteria: (a) Objective: strategic, tactical/operational (b) Duration: short, medium, long-term (c) Specificity: general, specific (d) Complexity: complex, simple (e) Methodology: top to bottom, bottom to top (f) Scope: comprehensive, narrow (g) Importance: major, minor  (h) Scale of measure: qualitative, quantitative  (I) Security class: confidential, public (j) Formality: formal, informal (k) Implementability: easy, difficult  (l) Flexibility: flexible, inflexible (m) Creativity: rational, intuitive, creative (n) Cost: expensive, cheap.

Planning has limitations due to environmental factors beyond the control of the planner. Failure to plan is due to philosophical objections to planning the future, resistance to change, fear of commitment, and difficulty of the planning process.

Strategy formulation goes through the following steps: defining organizational vision and mission, clarifying externally-imposed mandates, analyzing stakeholders, analyzing the internal and external environments, identifying strategic issues, collecting information, making assumptions and forecasts, formulating general strategic approaches for various possible scenarios, choosing the most favored scenario and formulating detailed tactical plans for it.

A strategic plan covers a long period of time. Its practical implementation is through a series of annual action or tactical plans. Contingency plans should be ready for immediate implementation if the chosen plan fails or encounters obstacles. Each chosen plan must be subjected to a workability test: can it work in practice? can the underlying vision be maintained, can the barriers be overcome?. Strategic plans need constant revision.

Strategic moves are actual measures taken to implement the strategy. Strategic moves can be sudden and major to throw competition off balance, paced and incremental with continuous evaluation, slow today with major impact in long-term perspective. Strategic moves may be sequential or simultaneous. Strategic moves may be conditional or unconditional.

Strategic moves are preceded by assessment of key players. In a zero sum situation, in which one person's gain is always another person's loss. In non-zero sum situations collaboration and coordination lead to a win/win outcome.

Planning strategic moves should consider relative power, resources, time, and the environment. Brinkmanship in strategic thinking is risky but has its rewards. Pre-emptive moves involve taking reactive moves even before the events reacted to have not yet fully unfolded which results in gain of lead-time and an upper hand.

The timing and sequence of strategic moves must be in stages and be part of strategic logic. Each strategic move must be broken down into its separate specific components to make analysis, monitoring, and modification easier. Very big strategic moves are riskier. Each move must consider previous moves and anticipated future ones.

Strategy implementation requires motivated leaders, resources, organizational restructuring, and behavioral changes. Strict control measures are needed to ensure that there is no deviation. Contingency or back up plans must be made. Opportunities should always be exploited. There are 4 main difficulties in strategy implementation: the long lag-time between action and outcome, uncertainty about the future, and dynamic shifts that require changing plans rapidly.


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