Topics to be Covered
This module draws on the lecture entitled “What is Strategy?,” a presentation that covers a broad range of topics associated with organizational strategy in both the for-profit and non-profit worlds. According to the speaker, relatively few organizations, even in the world of corporate business, are following real strategies, as he defines them. In his view, a real strategy is based on a basic premise: a successful organization needs to differentiate itself from its competitors rather than beat them in a head-to-head competition over prices. In keeping with this premise he puts forward a number of ideas about what constitutes a good organizational strategy, both for businesses and non-profits. In adopting a good organizational strategy, in his view, an organization must identify a specific group of customers or clients that it can serve better than its peers and competitors. A true strategy therefore involves decisions about which niche to occupy within a market, industry, or ecosystem, with an eye to maximizing overall profitability or, in the case of nonprofits, value as perceived by clients and beneficiaries of services. Some industries offer different kinds of parameters for successful strategies than others. Many organizations labor under the misunderstanding that they should try to please any possible customers or clients, when they should focus on a group they can serve with a uniquely attractive product. Strategy also should be seen to involve the entire set of activities the organization performs, or its “value chain,” in the terms used by the speaker. An effective strategy presumes that the organization can not only make its value chain consistent with the strategy, but it can do so in a way that is operationally effective. Operationally ineffective organizations will not create sustainable profitability, even if they are following a sound strategy. In the for-profit world, a sound strategy should enable the organization to avoid a lot of price-based competition with peers and rivals. Finally, it is imperative that the organization, particularly the leadership of the organization, commit themselves to a single strategy for a considerable length of time, as even sound strategies must be implemented consistently for some time in order to bear fruit.
Learning Outcomes
After hearing this lecture, students will enjoy a better understanding of what constitutes a strategy for organizations in the business world and the non-profit sector, and why so many organizations fail to develop and implement strategies at all.
