Indicate how your SSM company strategy integrates key elements of the Formulation and Implementation model (Exhibit 8.1, page 237)
Carpenter and Sanders (2008) describe the interrelation between strategy formulation and implantation. The strategy formulation involves the alignment of the five areas of the strategy diamond: arenas, staging, vehicles, differentiators, and economic logic. Strategy implementation includes implementation levers and strategic leadership.
In the arenas diamond, we utilized analyses to monitor the auto markets and make strategic decisions that aligned with our strategy. We determined that an AEV vehicle would a good expansion for our firm as it aligned with our strategy of providing value-priced vehicles. When choosing arenas, the organization needs to indicate not only where the business will be active, but also how much emphasis will be placed on each (Fredrickson & Hambrick, 2005). Some market segments may be identified as centrally important, while others may be deemed secondary. We chose to focus our efforts into the AEV arena by adding new dealerships where the AEV’s were being manufactured.
While we did not have full-capabilities in the StratSim, we discussed how our firm would realistically operate and strategize in our papers. In our Elements of Strategy paper, we discussed our different vehicles of entry. We chose to use the Six Sigma approach to maximize production with minimal defects. Companies can develop highly advantageous, well-honed capabilities in making acquisitions or in managing joint ventures, but the company that uses vehicles on an ad hoc basis, without an overarching logic and programmatic approach, can be at a severe disadvantage compared with companies that have such coherence (Finkelstein & Haleblian, 1999). We strategically chose joint ventures and partnerships. However, these could not be implemented in the SIM.
Our differentiators diamond is where we failed to successfully implement. In our Elements of Strategy paper, we emphasized that we would differentiate from our competitors by offering vehicles with superior quality at a fair price. We entered into new arenas and added new dealerships, which caused us to have limited funds available to focus on quality upgrades – which was our key differentiator. Fredrickson and Hambrick (2005) explain that many companies find themselves doomed by their efforts to simultaneously outdistance the competitors on too broad an array of differentiators while failing to recognize the inherent inconsistencies and extraordinary resource demands. Fredrickson and Hambrick suggest giving explicit preference to those few forms of superiority that are mutually reinforcing, consistent with the firm’s resources and capabilities, and are highly valued in the arenas the company has targeted.
Ireland et al. (2007) states that staging represents the time it will take to achieve the goals our firm has set for ourselves. At the time of the Elements of Strategy paper, we made the decision to focus on our family and economy vehicles in the first phases, and then take the time to learn consumer preferences and market demand by performing more research. As stated above, we expanded into new markets and failed to leave cash for our quality improvements.
Our economic logic again utilized the Six Sigma approach. We failed to property analyze our results and strategic choices. The business strategy must clearly define how profits will be generated, not just some profits, but all profits above the firm’s cost of capital. I see now that we may have spread our initiatives too thin and could have better utilized financial analyses.
What causes the Knowing-Doing Gap?
Carpenter and Sanders (2008) explain that the knowing-doing gap Is when a company is better at generating new knowledge than they are at creating new products based on that knowledge. Carpenter and Sanders discuss how the knowing-doing gap also applies to our StratSim, with possible causes being running out of time to enter decisions or failing to understand exactly how to translate a strategic directive into the set of decisions that need to be made. I think the latter was absolutely our team’s issue. That can be due to lack of experience in the auto industry and with a StratSim, as well as the limitations in the StratSim. Our firm has consistently adjusted our tactics and strategies when we were surprised with our results.
I also think the knowing-doing gap strongly applies to my organization, particularly with my direct boss. He is brilliant at formulating ideas, but oftentimes misses the mark on implementing them. Many of the managers come up with brilliant ideas that are successfully implemented when in the field, rather than through our strategy sessions. Joyner (2015) states that a practice that is rarely followed, but should be, is the process of acquiring new knowledge in the actual doing of the task and less in formal training programs that are frequently ineffective.
Carpenter, M. A., & Sanders, W. M. (2008). Strategic management: A dynamic perspective—Integrated StratSim simulation experience. Upper Saddle River, NJ: Pearson Prentice Hall.
Finkelstein, S. & Haleblian, J. (1999). The influence of organizational acquisition experience on acquisition performance: A behavioral learning perspective. Administrative Science Quarterly, 44: pp. 29 –56.
Fredrickson, J.W. & Hambrick, D.C. (2005). Are you sure you have a strategy? Academy of Management Executive Journal, 19(4): pp. 51-61.
Ireland, R. D., Hoskisson, R. E., & Hitt, R. E. (2007). Understanding business strategy: Concepts and cases. Mason, OH: Thomson South-Western.
Joyner, F. F. (2015). Bridging the Knowing/Doing gap to create high engagement work cultures. Journal of Applied Business Research, 31(3), 1131-n/a. Retrieved from https://search-proquest-com.library2.csumb.edu:224…