Managing future uncertainty: Reevaluating the role of scenario planning

The business environment for many firms is changing rapidly and is becoming increasingly uncertain due to the disruption caused by new digital technologies, deregulation, new business models, and the threat of new competitive entrants. This dynamic competitive environment increases the level of uncertainty for senior executives and strategic planning teams who bear responsibility for the strategic development of the firm, particularly in terms of the future direction, scope, and the strategy required to deliver on corporate objectives. This in turn, places increased scrutiny on the strategic planning tools that are used to undertake a rational and comprehensive analysis of the competitive dynamics that inform strategy formulation. This article presents empirical findings and reflections on a scenario-planning project that sought to develop a long-term corporate level strategy. While scenario planning is an established constituent of the strategist’s toolbox, the increasing level of dynamism and uncertainty in many markets has meant that it has seen a resurgence. This article presents empirical findings on how the scenario-planning tool was selected and applied before reflecting on the individual and organizational outcomes of using scenario planning to develop an organizational strategy in uncertain market conditions.     

“One of these days,things are going to change!” How do you make sense of market disruption?

The significance of mindsets is apparent in everyday business life. As today’s managers and companies face uncertainty and disruptive change in the business environment and markets, there is a growing need to understand and strategically address such change. This becomes challenging when disruptive market forces confront the institutional logic or rules of the game based on collectively acquired experience of doing business in the given field. In overcoming such challenges, managers’ hidden reasoning remains an untapped potential while their existing mindset influences what they attend to and what they decide to do. This article elaborates a diagnostic framework, accompanied by a tool to help managers make sense of disruptive markets and reflect individually and collectively on possible courses of action. The framework has two principal dimensions—strategic scope and focus—that are further divided into three business elements of strategic market-oriented management: offering, customer, and market. The tool offers a practical means of profiling individuals’ mindsets. In increasingly dynamic business environments, reflection capabilities represent a new source of competitive advantage.     

Strategic transformation as the essential last step in the process of business turnaround

Just over a decade ago, the work of strategic management scholars helped to broaden the perspectives of executives caught in the throes of declining organizational performance. In addition to the traditional turnaround options that stabilized financial performance, managers were shown approaches that they could deploy to reduce the chances of a recurrence of the turnaround situation. This article updates the progress that has since been made in understanding the turnaround process. Further, we look at an ambitious approach to redirecting the strategies of a reemerging company toward a more promising competitive position, as the essential last step in the process of business turnaround. Called strategic transformation, this approach to reformulating strategy cultivates company growth in strong or emerging markets.     

Transforming under deep uncertainty: A strategic perspective on risk management

Companies increasingly face the need for transformation in today’s rapidly changing business environment, characterized by major shifts in technology, regulation, and customer behavior. A lack of strategic risk insight and foresight leaves many incumbents insufficiently prepared in the face of such deep uncertainty. We argue that traditional risk management falls short because it predominantly focuses on strategy execution while leaving strategy formulation largely untouched. Moreover, an administrative-heavy risk management process can create strategic inertia and a misleading sense of control. In today’s dynamic business context, companies must not only increase the speed and impact of their strategy execution but also continuously explore the development of new strategies in response to disruptive events or emerging opportunities. Our research shows how leading companies develop a strategic risk management (SRM) capability to increase their resilience and agility in response to deep uncertainty. SRM takes a strategic, forward-looking perspective and focuses on strengthening processes, people, and practices for purposefully integrating risk into the strategy formulation process. This article offers a framework with three proven configurations of content and timing integration, risk management roles, and leading practices that enable effective SRM.     

服务化理论最新研究进展

服务化是制造业升级的重要途径,企业采用服务化战略实现由制造向服务转变,可以获得新的竞争优势。文章通过梳理国内外服务化理论的经典文献,阐述服务化的定义、目标与研究内容,归纳理论构成的主要维度：影响因素、发展策略和管理模式,并详细介绍了各维度的主要观点和演化过程。最后,基于对现有研究成果的总结和评述,运用系统思维和价值共创等概念,构建了服务化理论框架,并探索未来的理论发展方向。     

Marketing perspectives on digital business models: A framework and overview of the special issue

Strong digital developments are changing markets, and firms may adopt a digital business model to deal with these developments. This special issue focuses on such digital business models. In this editorial, we discuss the relevance of digital business models, propose a conceptual framework, and discuss how digital business models affect firms, firm performance, and markets. We introduce the papers in this issue and show how they each fit within the conceptual framework. We discuss four important areas for future research.     

Assessing business value of Big Data Analytics in European firms

In the strategic management field, dynamic capabilities (DC) such as organizational agility are considered to be paramount in the search for competitive advantage. Recent research claims that IT business value research needs a more dynamic perspective. In particular, the Big Data Analytics (BDA) value chain remains unexplored. To assess BDA value, a conceptual model is proposed based on a knowledge-based view and DC theories. To empirically test this model, the study addresses a survey to a wide range of 500 European firms and their IT and business executives. Results show that BDA can provide business value to several stages of the value chain. BDA can create organizational agility through knowledge management and its impact on process and competitive advantage. Also, this paper demonstrates that agility can partially mediate the effect between knowledge assets and performance (process level and competitive advantage). The model explains 77.8% of the variation in competitive advantage. The current paper also presents theoretical and practical implications of this study, and the study's limitations.     

A STRUCTURAL EQUATION MODEL OF SUPPLY CHAIN MANAGEMENT STRATEGIES AND FIRM PERFORMANCE

This research develops and analyzes a theoretical framework for supplier management and customer relationship strategies, supply chain management strategy, and firm performance using structural equation modeling. Data used in the paper were collected from a comprehensive survey circulated to a wide variety of U.S. and European business executives. Based on the findings, a clearer picture of the practice and benefits of SCM and its strategic implications emerges.     

Merger and Acquisitions as Adjustment Processes

The Tichy review needs to be placed in a broader conceptual framework. Declining transportation and communication costs have globalized markets. Technological changes including Internet developments have transformed industries and blurred industry boundaries. Such change forces have required adjustments by all firms. Mergers represent only one of the many strategies business firms have used. In adjusting to changing environments and competitive developments, firms changed the scope and mix of products and markets. Alliances, joint ventures, licensing, franchising, investments modify organization structures and business relationships. Divestitures, spin-offs, split-ups, rollups, consolidations, downsizing, and reorganizations alter the size, focus, growth rates, and vertical structures of firms. The efforts seeking to improve a firm's competitive position succeed or fail in various degrees. The many forms of industry and firm adjustment processes make structural-based antitrust guidelines bad policies.     

饮食服务企业经营与战略

饮食服务企业在社会经济生活中的地位、作用越发显得重要,饮食服务企业经营战略确定与选择是饮食服务企业发展的重大课题。饮食服务企业经营战略确定是由饮食服务企业经营特殊性决定的;战略确定的依据是行业政策和企业环境;战略选择原则是发挥整体优势,适应经营环境,战略实施具有连续性和内聚性,战略目标及方向是社会需求和产业化服务。     

Innovations in Retail Business Models

A retail business model articulates how a retailer creates value for its customers and appropriates value from the markets. Innovations in business models are increasingly critical for building sustainable advantage in a marketplace defined by unrelenting change, escalating customer expectations, and intense competition. Drawing from extant strategy and retailing research, we propose that innovations in retail business models are best viewed as changes in three design components: (1) the way in which the activities are organized, (2) the type of activities that are executed, and (3) the level of participation of the actors engaged in performing those activities. We propose six major ways in which retailers could innovate their business models to enhance value creation and appropriation beyond the levels afforded by traditional approaches to retailing. We also describe the drivers of business model innovations, the potential consequences of such innovations, and numerous examples from retail practice that highlight our concepts and arguments. In doing so, we provide a starting point for academic research in a domain that is deficient in theoretical and empirical research, and offer retailing managers a framework to guide retail business model innovations for sustainable competitive advantage.     

Designing a tool for service-dominant strategies using action design research

Both academic research and industrial practice recognize difficulties in translating the principles of service-dominant (S-D) business logic into actionable insights for practitioners, particularly when considering S-D logic at the strategic level. To address this problem, this paper focuses on the conceptualization, formulation, and communication of an S-D business strategy. From the theoretical standpoint, we conceptualize the elements of an S-D strategy by filtering the scattered literature about S-D strategy and business models through the lenses of traditional views of business strategy. From the practical standpoint, we develop a tool embedding our conceptual development to support practitioners in the formulation and communication of S-D strategy. While traditional strategy tools take a value chain perspective, our tool helps to position the focal organization at the center of a complex ecosystem of partners who are co-creating value. Following the principles of action design research, the tool is developed and evaluated in close collaboration with practice in a case study in the financial services industry. Consequently, this paper contributes both to the conceptual and the practical operationalization of S-D logic at the strategic level.     

Cognitive Maps and a Hyperknowledge Support System in Strategic Management

Strategic management is defined as the system of action programs which form sustainable competitive advantages for a corporation, its divisions, and its business units in a strategic planning period.We have developed a system called Woodstrat to serve as a support system for these action program activities on both the corporate, the divisional, and the business unit levels. The system is modular and is built around the logic of strategic management, i.e., the main modules cover the market position; the competitive position; the production position; and the profitability, investment, and financing positions. The innovation in Woodstrat is that these modules are linked together, i.e., when a strong market position is built into some market segment, it will have an immediate impact on profitability through links running from the assumptions on an expected development to the projected profit/loss statement. There are similar links making the competitive position interact with the market position, and the production position interact with both the market and the competitive positions, and with the profitability and financing positions.The intermodular links are based on expert knowledge of strategic management; expert knowledge is also worked into the modules such that the logic of strategic management guides the user through the process of working out sustainable competitive advantages. The process is made user-supportive with a hyperknowledge user interface. The support is made intuitive and effective with the use of object-oriented expert system technology. The basis for this is rather unusual: the Woodstrat system was built with Visual Basic, in which the objects to create a hyperknowledge environment were built.It is shown that the conceptual constructs which form strategic management can be described with cognitive maps, and that these can be adequately represented with our hyperknowledge objects. It is also shown that the knowledge formation which takes place in a management team when strategic plans are formed can be described and validated with a hyperknowledge support system. It is finally shown that a support system with hyperknowledge features, which are close to the cognitive maps of a management team, will have a profound impact on the depth and the structure of its strategic management processes.     

Issues of Competitiveness

Abstract

This article investigates the forces that constrain Taiwanese-based corporations from improving quality and introducing and marketing new products. A total of 182 executives from the service and manufacturing sectors participated in the study. The results indicate that Taiwanese-based firms are optimistic about their competitive market position and about their respective industries. Furthermore, executives of these firms prefer to compete in regional and global markets. Absence of pride in a job well done, ineffective performance evaluation systems, and excessive government regulations were found to be the most important factors that may prohibit improvement in product quality. The results also reveal that various factors may hinder the development and marketing of new products. They are inattentiveness to consumer needs, top management's lack of attention to world competition and global opportunities, deterioration of the competitive spirit among employees and managers, absence of a flexible manufacturing strategy, volatile business environment, and too much focus on immediate results.     

Developing Information Systems to Support Flexible Strategy

The literature on strategic applications of information technology(IT) and strategic information systems (SIS) contains a number of "classic" success cases. These systems are successful in terms of one particular strategy framework, but there is evidence that the demands placed upon SIS are changing. Changes in the business environment and in the rate of development of technology have created a requirement for more flexibility in the strategic process. This must be supported by a "new generation" of SIS that integrate with flexible infrastructures to provide long-term effective support for a flexible business strategy. This article looks at the changing nature of the strategic: process and examines a framework that has potential to assist in these aims. A number of techniques are analyzed to assess their capability for identifying strategic applications of IT. Finally, a way of providing a flexible IS/IT infrastructure relevant to the development of a flexible SIS is discussed.     

Managerial Perceptions of Organizational Planning Benefits

Abstract

The last two decades have witnessed an increase in the number of business organizations which have recognised and adopted formal measures for undertaking strategic planning in industrialised countries. Notwithstanding the volume of pedagogical literature concerning strategic planning practice, there is limited evidence on issues relating to the planning process in developing nations. Although executives in transition developing economies may be stimulated to adopt a robust approach to planning their commercial activities, the justification for such an orientation has tended to rely upon intuitive thinking and conceptual contributions to knowledge. It is suggested that empirical tests or the anticipated benefits of planning might be more revealing and provide a grounded approach to assessing the utility of strategic planning for businesses operating in an emerging developing market. For this reason, the focus of this article is a discussion of the findings from an empirical study that investigated the perceived attitudinal and behavioural consequences of strategic planning, with the aim of determining the significance of such effects on planning among firms operating in Ghana's transition economy. A number of favourable outcomes are identified in managerial perceptions of planning. The implications     

Marketing strategy in emerging markets: a conceptual framework

Citing difference between emerging and developed markets, scholars highlight need for different approaches to marketing in emerging markets. In this paper, we argue that while there are some unique characteristics of emerging markets, all countries within emerging markets do not have similar levels of product penetration and consumption. As a result, it is wrong to assume that emerging markets are untapped and under-served across the product categories. To a list of characteristics identified as unique to emerging markets, we add large population as an important characteristic and discuss its strategic implications. We develop a conceptual framework that factors in combined effect of varying degrees of product penetration & consumption levels with large population of emerging market countries. The conceptual framework identifies four strategic alternatives for marketing in emerging markets. Instead of recommending any generic marketing strategy, we propose that marketers need to choose an appropriate mix of strategies aimed at primary and selective demand creation in emerging markets.     

Imperfect markets: Business ethics as an easy virtue

This paper marks a radical diversion from the large body of prevailing literature in business ethics which primarily views the issue in individual-personal terms, i.e., corporate executive and employee, and suggests that making corporations more ethical would primarily come through changes in executive behavior. While this approach has strong intellectual roots in moral philosophy and religion, it fails in explaining the persistence of unethical and illegal behavior among corporations of all sizes, financial health, competitive market conditions, and, level of individual executive compensation. This paper argues for a fundamentally different approach to understanding ethical behavior, or lack thereof, among corporations and their executives. It is asserted that an overwhelmingly large rationale and/or inducement for proactive ethical business behavior is rooted in competitive aspects of particular markets, and industry structures prevailing in those markets. Furthermore, while highly competitive markets may promote efficiency, they do not guarantee ethical behavior and may indeed provide greater opportunities and incentives for unethical business behavior. Thus, by following the current prognosis, we could be wasting enormous resources in terms of teaching business ethics, and creating and imposing corporate codes of conduct. We assert that these approaches would at best make a marginal improvement in the ethical performance of corporations while at the same time exacerbate the problem by ignoring more fundamental, structural issues. Imperfect markets, with their above-market profits, are a necessary but insufficient condition for corporations to behave ethically. It is only under conditions of imperfect markets that individual executives can play an important role in guiding their corporations toward greater ethical norms. These are undertaken for a variety of reasons, including, protecting a corporation's good name, public expectations, competitive norms, and, corporate culture and individual executive's predilections, to name a few.S. Prakash Sethi is Professor and Acting Director, Center for Management, Baruch College, The City University of New York. He has widely published in the areas of corporate social responsibility, international business, business ethics, and corporate strategy and public policy. His most recent publication isMultinational Corporations and the Impact of Public Advocacy on Corporate Strategy: Nestle and the Infant Formula Controversy (Kluwer, 1994).     

Supplier Selection Practices among Small Firms in the United States: Testing Three Models

One of the issues investigated in recent studies on small business enterprises involves the role of supply chain management. Supply chain management has become an important part of strategic planning in both large and small businesses in the 1990s as firms increasingly choose outsourcingas an externally-driven strategic growth path. This study examines the supplier selection practices among 78 small business executives in the midwest United States by testing three models: rational/normative, external control, and strategic choice. Although the results show support for all three models, the rational/normative model emerges as the most significant model for predicting the supplier selection practices of small firms.     

CLASS: Five elements of corporate governance to manage strategic risk

Strategic risk management is an increasing concern for both boards and senior executives. Many recent business failures are due to senior level misjudgement and mismanagement of risk, the consequences of which can range from embarrassment to serious setback to bankruptcy. Ineffective risk management puts otherwise strong business models in jeopardy. Here we present CLASS (Culture, Leadership, Alignment, Systems, and Structure), an integrated, five-element model of corporate governance. We identify how attending to the elements in this framework supports development of an integrated and robust approach to corporate risk, and helps senior executives anticipate and handle the complexities of risk inherent in meeting strategic objectives.