Global Strategy - blog

As an occasional observer and sometimes an adviser in public sector strategy processes, one may easily ask to what extent business strategy is applicable in the strategic management of, for example, universities? Or to be more specific: what kind of strategic management would be of any help in public sector strategizing? The specification is important as (a) firms generally are a rather bad benchmark for any activities meant to last longer than three years. A statistical fact is that most for-profit firms die young; die painfully; or otherwise cease to exist. In this sense, there is not much to learn from the sudden success stories which may be explained more by random evolutionary processes than skillful strategic thinking. Even less we may learn from the constant failures of small and large firms. Also, what organizations optimize (profit, survival, efficient public good production) already makes for-profit organizations entirely different relative to non-profit organizations. The specification is also important because (b) strategy practices differ considerably from firm to firm. To keep things simple: there is two ways (bad and good) for strategic management. (1) many firms still follow 'old-school' strategy based on belief that top management have super-human skills in seeing into future, and acting accordingly. This 'old-school' approach respects strategic planning, control, heavy administrative processes, and other activities meant to hamper innovativeness and emergence. From a performance and survival perspectives, this approach is like flipping a coin because we still not have managers with those super-human qualities (called as 'psyches'’ in science fiction).

An interesting question to GloStra is how firms can or should adapt their strategies according to the societies in which they operate.

The success of technology based firms hinges greatly upon their strategic fitness within two key domains: output markets and technology. First and foremost, the better the firms are able to develop and deliver valuable outputs (i.e. products and services) to customers within a focal target market, the better chances of success they have. Market based success is a function of an optimal market position and coverage and thus the demand potential underlying the targeted market. However, the value-added that that technology based firms ultimately deliver to their customers is based on an extensive and complex platform of technological knowledge and routines. Technology thus represents the inputs to a firm's productive process, whereby routines are required to turn the technological-scientific knowledge into tradable outputs that are perceived valuable by the customers. Despite normal mechanisms of market-based competition, much of competitive racing actually takes place in the technological domain.

The dynamics between a firm's strategy and finance is one major research focus in GloStra (see e.g. http://www.glostra.fi/research/business-model-evolution, as well as http://www.glostra.fi/faculty/hse/120-jaakko-aspara). Therefore, it is interesting to ponder what implications the current financial crisis and looming recession have for the relationships between firms' strategies and finance options, such as venture capital.

You do not have to spend much time in the USA to note how effortful companies (and sometimes also authorities, parties, and media) are in using academic research results in their political activities. Since political strategies of corporations are a topic of major research interest in GloStra (see e.g. the research area on Corporate Strategy & Society as well as Lamberg et al.'s article, and Mantere et al.'s article) let me present an illustration, an example which I ran into tonight.

Juha-Antti Lamberg, Henri Schildt and Juha Mattsson had the opportunity the share their knowledge in the Journal of Helsinki University of Technology, Polysteekki, which had a theme issue on strategy. In the editorial Lamberg pointed out how the brand of strategic research is believed to have all the answers to business operations success.