A Brief History of Strategic Thought: Corporate Reputation and Competitiveness Gary Davies: Session 1

A Brief History Of Strategic Thought
Corporate Reputation and Competitiveness Gary Davies: Session 1
Course Aims and Outcomes

Course Aims For students to understand the role of corporate reputation as a strategic framework. Learning Outcomes Students will understand how to define and measure the reputation of an organisation, how to manage a corporate reputation and what linkages there are between reputation and company performance
Lecture Aims
To review the development of Strategic Thinking and to locate Reputation within this To make the case for Reputation as a Strategic Framework
What is Strategy?
Strategy is about matching the competencies of the organization to its environment. A Strategy describes how an organization aims to meet its objectives. A successful Strategy is one that achieves an above average profitability in its sector.
Early Tools
Anecdotal comment (war stories) from captains of industry Simple frameworks: SWOT, PEST Early proscriptive models, eg gap analysis
The Two Planning Flows

VISION MODEL STRATEGY GOAL OBJECTIVE
TACTICS STRATEGIC
BUDGET
FINANCIAL
The Five Forces Model

NEW ENTRANTS
SUPPLIERS
RIVALRY
CUSTOMERS
CONSUMERS
SUBSTITUTES
Adapted from Porter 1988
Generic Strategies
The idea that strategic frameworks and options can be defined that fit all companies/organisations in all circumstances Porters 3 generic strategies: Cost leadership, Focus, Differentiation
The PIMS Paradigm

Market Structure
Market Differentiation Market Growth Rate Purchase Quantity
Competitive Position
Relative perceived quality Relative market share Relative capital intensity
Strategy and Tactics
Performance
Adapted from Buzzel & Gale (1987)
Relative cost
The New Economy

Growing emphasis on the service sector and manufacturers adding value by adding services e.g. IBM selling solutions Need to define new models to guide the management of service business
The Serqual Gaps Model

Expected Service
CUSTOMER
Perceived Service
Service Delivery
Service Quality Specification
External Communications to Customers
PROVIDER
Management Perceptions of Customer Expectations
Dimensions of Service Quality

Access (can the customer obtain the service easily) Credibility (can you trust the company?) Knowledge (does the supplier understand the customers needs?) Reliability (is the service dependable and consistent?) Security (is the service free from risk?) Competence (how knowledgeable and skilled are staff?)
Dimensions of Service Quality

Communication (is the service well explained?) Courtesy ( are staff considerate and polite) Responsiveness (are staff quick to respond?) Tangibles associated with the service (buildings, uniforms).
The Service Profit Chain

Employee Retention Revenue Growth
Internal Service Quality
Employee Satisfaction
External Service Value Employee Productivity
Customer Satisfaction
Customer Loyalty
Profitability
Source: Adapted from Heskett et al (1994)
People Management
People Satisfaction
Leadership
Policy & Strategy
Processes
Customer Satisfaction
Business Results
Resources
Impact on Society
Enablers
Results
The Business Excellence Model
Concern about Strategic Models

Can you plan a modern, complex company from the top even using a strategic planning team as advisors? Why do strategic models conflict (PIMS and stuck in the middle)? Should strategy start from the market place not from the strategy team? Isnt it time we distinguished between strategic analysis and strategy itself?
Emergent Strategy
Henry Mintzbergs thinking that few strategies come from the top and that most emerge changes our view of strategising. The role of senior manager changes from deciding what to do and finding someone else to do it to coach, filter, enabler.
Top down v Bottom up?

The Customer Management Staff
Staff The Customer
Management
MARKET-FOCUSSED COMPANIES
Understanding the Customer Direct customer contact at many levels Widely disseminated and understood research on who the core customer is and on the market structure, e.g. on market segmentation Responsiveness of the organisation to customer needs Regularly receive and act upon customer satisfaction surveys Responsive to customer complaints and suggestions Track key customer data on company image
MARKET-FOCUSSED COMPANIES
Provision of real value for money Monitor aspects of quality relevant to the marketplace Conduct comparative surveys of competitive prices and services Reward inside the organisation based on performance with customers
Source: Corporate Strategy, Richard Lynch, Pitman 1997, p.198
CUSTOMER FOCUS
Customer focus goes beyond market focus. The company is managed totally from the customers point of view. Key features of customer focused companies are:
The business is led by someone who is a fanatic about the customer and able to model the desired behaviours Customer facing employees are empowered to react to what the customer wants.
Employees have a stake in the business (usually share or other form of ownership) Employees feel trusted to run the business.
CUSTOMER FOCUS [cont ]
Customers are regularly asked for ideas as to how the business should be run. Achieving a customer focus is a cultural issue (not an organisational issue). Changing to a customer focus is neither easy nor comfortable.
Mission and Vision

PURPOSE
( Why the Company Exists)
STRATEGY (The commercial rationale)
COMPANY VALUES (What senior management believe in)
STANDARDS and BEHAVIOUR (Policies and behaviour patterns that guide how the company operates)
The Ashridge model from Campbell &Tawaday (1990)
Analysis and Implementation

Model One: Two discrete stages
Analysis
Implementation
Analysis Implementation
Time
Model Two: Two overlapping stages
A New Approach?
Should meet the basics of strategy: link to profit, clear direction etc Should be generic (applicable to any organisation) Should reflect the trend towards service business Should be bottom up/emergent in focus Should be implementable
Aims and Objectives

To present the case for Reputation as a paradigm for managing the strategic direction of an organisation To explore how reputation management has emerged from PR and Communications To demonstrate how Reputation can meet the criteria for being a strategic tool
What is Strategy?
Strategy is about matching the competencies of the organization to its environment. A Strategy describes how an organization aims to meet its objectives. A successful Strategy is one that achieves an above average profitability in its sector.
What Is Reputation?
The net result of the interaction of all the experiences, impressions, beliefs, feelings and knowledge that people have about an organisation
Recruitment
Other External Stakeholders: Suppliers, Investors
Satisfaction
Employee View
Reputation
Customer View
Satisfaction
Retention
Loyalty
Identity
Image
Revenue
The Corporate Reputation Chain
Agreeableness
Enterprise Competence Corporate Personality Chic Ruthlessness Machismo Informality The 7 Dimensions of Corporate Personality
Summary
Reputation can be considered as a useful strategic framework It is particularly useful for service companies It can be used to direct the strategy for no for profit as well as for profit seeking organisations

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A Brief History Of Strategic Thought

Corporate Reputation and Competitiveness Gary Davies: Session 1

Course Aims and Outcomes

The Two Planning Flows

The Five Forces Model

Adapted from Porter 1988

The PIMS Paradigm

Strategy and Tactics

Adapted from Buzzel & Gale (1987)

The New Economy

The Serqual Gaps Model

Service Quality Specification

External Communications to Customers

Dimensions of Service Quality

Dimensions of Service Quality

The Service Profit Chain

Internal Service Quality

External Service Value Employee Productivity

Source: Adapted from Heskett et al (1994)

Policy & Strategy

The Business Excellence Model

Concern about Strategic Models

Top down v Bottom up?

Staff The Customer

Source: Corporate Strategy, Richard Lynch, Pitman 1997, p.198

CUSTOMER FOCUS [cont ]

Mission and Vision

STRATEGY (The commercial rationale)

COMPANY VALUES (What senior management believe in)

The Ashridge model from Campbell &Tawaday (1990)

Analysis and Implementation

Model Two: Two overlapping stages

Aims and Objectives

Other External Stakeholders: Suppliers, Investors

The Corporate Reputation Chain

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