week3 readings 1 and 2

8/8/2019 Week3 Readings 1 and 2

1/19

STRATEGIC DISSONANCE

by Robert A. Bugelman and Andrew S. Grove


2/19

DISSONANCE

Inconsistency between the beliefs one holds or

between one's actions and one's beliefs

Lack of agreement, consistency, or harmony; conflict


3/19

QUESTION:QUESTION:

How can top management inHow can top management inextremely dynamic environmentsextremely dynamic environmentsdecide on the right strategic intent?decide on the right strategic intent?


4/19

KEY CONCEPTS

Strategic Dissonance

Strategic Inflection Point

Strategic Recognition Conceptual Framework


5/19

STRATEGIC DISSONANCE

Alignment between firms strategic intent and

strategic action.- key premise

Strategic actions will begin to lead or lag strategic

intent cause of strategic dissonance.

Differences or conflict between

competence and the basis of competition

Strategy and action


6/19

Conflict is strategic when it signals future

industry or corporate transformation

Key to moving the company out of strategic

dissonance is top managements capacity to

use the conflicting information generated by it

to create new strategic intent


7/19

STRATEGIC INFLECTION POINT

Giving way of one type of industry dynamics toanother; the change of one winning strategy intoanother; the replacement of an existing technological

regime by a new one.

Creates a valley of death

The way out of the valley of death is a new strategicintent that takes advantage of the new industry

conditions--problem is, how do you know what thatis?? How do you know if its an SIP?


8/19

STRATEGIC RECOGNITION

Top managements major tool for dealing with

strategic dissonance and an SIP

Picks out the elements that can form the basis for

new, viable strategic goals

Enabled by the ability of internal selection

environment


9/19

CONCEPTUAL FRAMEWORK

Describes the evolving linkages between companys

core competencies and the basis of competition in

the industry and its official corporate strategy and

strategic action


10/19

FRAMEWORK

Basis of competitive

advantage in the industry

nternal selection

environment

istinctive competence

of the firm

fficial

corporate

strategy

trategic

action


11/19

SOURCES OF STRATEGIC DISSONANCE

Divergence of the basis of competition and

distinctive competence

Divergence between stated strategy and strategic

action


12/19

INTERNAL SELECTION ENVIRONMENT

If the company faces SIP, the internal selectionenvironment would be more important for survival thanits stated strategy.

Regulates the allocation of the companys scarceresources to strategic action while the official strategy is

in flux

Cash, competencies, capabilities and sr. managementattention

The continues success provides time cushion for bringingcorporate strategy back in line with strategic actionand keeping company alive during SIP


13/19


14/19

MANAGING STRATEGIC DISSONANCE

Taking advantage of strategic dissonance and

surviving an SIP depend on the internal selection

environment and top management behaviors

Internal selection environment must reflect external

reality

Top management must allow dispute to occur


15/19

NEW STRATEGIC INTENT

Formulate based on strategic recognition

Develop a mental image of what the industry will

look like based on information generated by strategic

dissonance

Changing with the environment and the organization

(led by reality)

Requires reinventing or rediscovering the companys

identity


16/19

STRATEGIC INTENT

TO STRATEGIC ACTION

Reassigning resources to pursue new strategic intent

Corporate strategy is realized by performing the series

of strategic action and not via strategic planning.

Middle managers insights

Too little logical debate--vision is not clearly developed and

march is not clear

Too much debate paralyzes the company and delays

strategic action

Role of sr. management:

Pull strategic action and strategy in line.

Encourage debate, bring it to conclusion


17/19

CULTURE IS THE KEY

Dominant top-down force lock steps towardsstrategic intent

Dominant bottom-up force company will drift

aimlessly Strong both bottom-up and top-down forces

Two attributes:

1) Tolerates-even encourages-debate

2) Capable of making-and accepting-clear decisions;with entire organization capable of supporting thedecision


18/19

Conclusion

Conceptual framework examines link between:

Companies' distinctive competencies and basis of

competition

Strategy and action

Divergence is the natural outcome of internal and

external dynamic forces

Strategic dissonance creates opportunity for thetop management to learn about changing reality of

the competitive world


19/19

Thank you

week3 readings 1 and 2

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