La strategia nella realtà aziendale: mission e obiettivi a lungo termine

Strategia aziendale: mission e obiettivi a lungo termine

STUDII UNIVERSITAS Sier TAURINENSIS 1404 SME SCUOLA DI MANAGEMENT ED ECONOMIA UNIVERSITÀ DEGLI STUDI DI TORINO La strategia nella realtà aziendale (2/2) ECONOMIA E DIREZIONE DELLE IMPRESE E STRATEGIE D'IMPRESA DECISIONE STRATEGICA: Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO

Capitoli del testo Strategie d'Impresa

3. La mission e gli obiettivi di lungo termineSTUDII UNIVERSITAS Sier TAURINENSIS 1404 SME SCUOLA DI MANAGEMENT ED ECONOMIA UNIVERSITÀ DEGLI STUDI DI TORINO How to define a Strategy DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO Bernardo BertoldiStrategy is necessary to firm success

Assuming that firm success is manifested in attaining a competitive position or series of competitive positions that lead to superior and sustainable financial performance.

Condizioni per il successo aziendale

To explain firm success, the early literature on strategy defined three essential conditions:

• Consistent set of goals and functional policies INSIEME di OBIETTIVI e POLITICHE FUNZIONALI The first is that a company develop and implement an internally consistent set of goals and functional policies that collectively defined its position in the market. A set of goals and functional policies is needed to counter the centrifugal forces that lead functional departments in separate directions. Strategy, in modern language, is a solution to the agency problem that arises because senior management cannot participate in or monitor all decisions.
• SWOT alignment ALLINEAMENTO tra PUNTI di FORZA e DEBOLEZZA The second condition for success is that this internally consistent set of goals and policies aligns the firm's strengths and weaknesses with the external (industry) opportunities and threats. Strategy is the act of aligning a company and its environment. That environment, as well as the firm's own capabilities, are subject to change. Thus, the task of strategy is to maintain a dynamic, not a static balance.

PUNTO di FORZA: QUALCOSA che SAI FARE MEGLIO (NON SOLO BENE)

• Creation and exploitation of "distinctive competences" The third condition for success is that a firm's strategy be centrally concerned with the creation and exploitation of its so-called 'distinctive competences'. These are the unique strengths a firm possesses, which are seen as central to competitive success.

CREAZIONE di COMPETENZE DISTINTIVE: SAPER FARE QUALCOSA di DIVERSO STUDII UNIVERSITAS TAURINENSIS 1404 Source: Porter, M. E. (1991). Towards a dynamic theory of strategy. Strategic management journal, 12(S2), 95-117. Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 66What makes something "a Strategy"?

Firms identify the need of a «Strategy>> when the company's actions do not fit together and have not a unified logic. An example has been when McDonalds, famous for being a fast-food chain with its low prices, launched a burger targeted at sophisticated taste (Arch Deluxe). This show how the sign of a "lack of Strategy" is a lack of consistency.

Definizione e ruolo della strategia

The Definition of Strategy "The smallest set of choices to optimally guide (or force) other choices (towards sustained superior performance)" STRATEGIA: LE Plù PICCOLE DECISIONI che INFLUENZANO le DECISIONI SUCCESSIVE

The Role of Strategy The role of strategy is to make sure that all decisions fit together, at a point in time and over time. To achieve that fit, a strategy specify the core of a intended course of action so that every employee knows where the rest of the company is heading and can align his or her actions on that. For this reason, strategy is a plan boiled down to its essence and is not a detailed plan. What is important is to capture the big picture to help all decisions fit together.

STUDII UNIVERSITAS TAURINENSIS Source: Van Den Steen, E. (2017). "Strategy and Strategic Decisions", Harvard Business School. 140A Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 67Is the Strategic DNA the Vision or the Mission?

STUDII UNIVERSITAS TAURINENSIS 140A Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 68Vision is "where we go" [WHY], Mission is "who we are to get there" [HOW], DNA is "what we do to get there"

Vision, Mission e DNA strategico

Description Vision DOVE VOGLIO ANDARE TRA X ANNI? . Envisioned future: the most ambitious programme of the organisation (BHAG*). Normally they require from 10 to 30 years for been completed BIG HAIRY AUDACIOUS GOALS · Vivid description: It is a realistic picture of how it would look like if one would reach the BHAGS. It gives an emotional side which can make things happen

Mission COME LO FACCIAMO PER ARRIVARCI? . It is the "raison d'etre" of an organisation, . What it is at its core, what it is outstanding at

DNA COME SIAMO FATTI per ARRIVARCI? . The smallest set of choices to optimally guide (or force) other choices (towards sustained superior performance)

STUDIJ UNIVERSITAS TAURINENSIS 140A Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 69What is the mission of Disney? A. Make people happy B. At least 10% profit margin in every business unit C. To be the world's premier entertainment company D. Be seen as the ambassador of the "American way of life"

STUDII UNIVERSITAS TAURINENSIS 140A Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 70The Wonderful World of DISNEY Mission: "To make people happy"What is the vision of Disney ? A. Bring good things to life B. At least 10% profit margin every business unit C. To be the world's premier entertainment company D. Be seen as the ambassador of the "American way of life"

STUDII UNIVERSITAS TAURINENSIS 140A Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 72The Wonderful World of DISNEY Vision: "To be the world's premier entertainment company"Mission statements must be linked directly to the strategic DNA, Porter recall us.

L'importanza delle mission statement secondo Michael Porter

An interview with Michael Porter ACADEMY OF Management Gary Hamel has promoted the idea that companies should pursue causes, rather than products. Companies should have mission statements that motivate people with a cause. Does every corporate goal have to relate to profitability? A cause has to be directly connected to a business purpose and competitive advantage to be useful for strategy. The cause must say something about the value that the company's product delivers ... By articulating the value in cause-like terms, one often gets internal benefits such as motivation of employees and external benefits such as free publicity. But in these examples, the cause ties directly to a distinctive strategy. A lot of mission statements are completely useless. They are statements of broad principles that might create a warm glow in the company, but they don't guide competitive success

STUDIJ UNIVERSITAS TAURINENSIS Source: Argyres, N., & McGahan, A. M. (2002). An interview with Michael Porter. Academy of Management Perspectives, 16(2), 43-52. Copyright @ Bernardo Bertoldi 1404 DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 74A strategy is a guidance to make decisions (1/2)

Too often firms mistakenly let the company's management and employees take the "best decision" in their perspective instead of following the guidance of a strategy when making decisions.

Perché le "migliori decisioni" non funzionano senza strategia

Three reasons why does not work the "best decisions" way of doing:

1. Choices Interact: the optimal marketing choice depends on product development choices, and the other way around. Strategy is exactly the set of core choices that ties together these interdependent choices. Understanding the company's strategy allows managers and employees to anticipate what others will do and align their actions. The alternative would be for the management to get together for every decision and revisit the firm's full course of action to make sure that this particular choice fits with all together INTERAZIONE tra DECISIONI
2. By fixing core choices, strategy reduces the amount of time and expertise needed in making decisions as it reduces how often employees need to revisit the full set of facts and discuss the full set of choices with the complete team
3. Having a clear strategy gives management more control over the direction of the organization.

STUDII UNIVERSITAS TAURINENSIS Source: Van Den Steen, E. (2017). "Strategy and Strategic Decisions", Harvard Business School. 1404 Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 75A strategy is a guidance to make decisions (2/2)

Esempio pratico: la strategia di Ryanair

The "Strategy as core guidance" can be practically illustrated through the strategy of Ryanair, the Irish low-cost carrier:

THE OFFER Ryanair offer the: 1. Cheapest I MENO CARI (TRA TUTTI) 2. Point-to-point 3. Short- and medium- distance flight in Europe

THE MODEL THE RATIONALE Ryanair low-cost model is built on: 1. a frugal culture, 2. minimal amenities, 3. the use of secondary airports The strategic choices are high level choices, which function as goals for lower levels in the organization and as guidance for the management team going forward. With this strategy Ryanair prevents that some parts of Ryanair make investments to accommodate flight connections - raising costs - while others do not - preventing actual connections and thus stopping Ryanair from recouping these expenses.

STUDIJ UNIVERSITAS TAURINENSIS Source: Van Den Steen, E. (2017). "Strategy and Strategic Decisions", Harvard Business School. 1404 Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 76A statement to be a strategy DNA must pass three tests

Test per il DNA di una strategia

Key Questions Description Guidance Does the strategy guide appropriately? è ALLINEATA la DECISIONE STRATEGICA con IL DNA? Does the strategy make clear how the decision should and should not be taken? Does each company's choice reflect properly the Strategic Statement defined? (as well it's useful to address the same question at the lower managerial levels)

Specificity Is it non-generic? Pick some competitors that seems to pursue a different strategy (if there is no such competitor, imagine an important alternative strategy). Is it clear how the strategy, as selected, does not apply to this competitor? Is it therefore specific for your company?

Conciseness Is it really the smallest set of choices? Could you get the same guidance in a more concise way? Is it no more than 5-7 choices (or, when formulated as a sentence, no more than 30- 40 words)? Can people easily remember it?

STUDII 02/03/2025 UNIVERSITAS TAURINENSIS Source: Van Den Steen, E. (2017). "Strategy and Strategic Decisions", Harvard Business School. Copyright @ Bernardo Bertoldi DM DIPARTIMENTO DI MANAGEMENT VALTER CANTINO 77