Competitive and Collaborative
Strategies

General Environment
◦ Social, Technological, Economic, Ecological, and
political forces

Task Environment
◦ Customer and buyer power, rivalry among
competitors, substitute products/services, and
potential new entrants

Enacted Environment
◦ Managerial perceptions and representations of
the environment
192

Dynamism - the extent to which the
environment changes unpredictably

Complexity - the number of significant
elements the organization must monitor


Information Uncertainty - the extent to
which environmental information is
ambiguous
Resource Dependence - the degree to
which an organization relies on other
organizations for resources
193
Low
Low
Resource Dependence
High
Minimal
environmental constraint
and need to be responsive
to environment
Moderate constraint
and responsiveness
to environment
Moderate constraint
and responsiveness
to environment
Maximal
environmental constraint
and need to be responsive
to environment
Information
Uncertainty
High
194

Uniqueness

Value

Difficult to Imitate
◦ All organizations possess unique bundles of
resources and processes that represent the source
of competitive advantage
◦ Organizations that arrange their unique resources
and processes to produce products or services that
have value (low cost, desirable features)
◦ Competitive advantage is sustainable when it is
difficult to duplicate
195




Strategic Analysis
Strategic Choice
Designing the Strategic Change Plan
Implementing the Strategic Change
Plan
196
Strategy
S1
Organization
O1
Strategic Analysis
Strategic
Change
Plan
Implementation
Strategy
S2
Organization
O2
Strategic Choice
197

Strategic Analysis

Strategic Choice
◦ Assess the readiness for change and top
management’s ability to carry out change
◦ Diagnose the Current Strategic Orientation
◦ Top management determines the content of
the strategic change

Designing the Strategic Change Plan

Implementing the Strategic Change Plan
◦ Development of a comprehensive agenda to
achieve the change
198



Merger - the integration of two
previously independent organizations
into a completely new organization
Acquisition - the purchase of one
organization by another for integration
into the acquiring organization.
Distinct from strategies for collaboration,
such as alliances and networks, because
at least one of the organizations ceases
to exist.
199




Diversification
Vertical integration
Gaining access to global markets,
technology, or other resources
Achieving operational efficiencies,
improved innovation, or resource sharing
1910

Pre-combination Phase

Legal Combination Phase
◦ The organization must identify a candidate
organization, work with it to gather
information about each other, and plan the
implementation and integration activities
◦ The two organizations settle on the terms of
the deal, gain approval from regulatory
agencies and shareholders, and file
appropriate legal documents

Operational Combination Phase
◦ Implementing the operational, technical and
cultural integration activities
1911




Involve two or more organizations who agree to
work together to achieve their objectives
Align and coordinate organization strategies,
goals, structures, and processes as they become
interdependent
Allow organizations to perform tasks that are too
costly and complicated for single organizations to
perform
Also known as transorganizational systems,
including alliances and networks
1912



When two organizations formally agree to
pursue a set of goals
There is sharing of resources, intellectual
property, people, capital, technology,
capabilities or physical assets
Common alliances are licensing agreements,
franchises, long-term contracts, and joint
ventures
1913

Alliance Strategy Formulation

Partner Selection
◦ Clarify the business strategy and why an
alliance is needed
◦ Leverage similarities and differences to create
competitive advantage

Alliance Structuring and Start-up

Alliance Operation and Adjustment
◦ Build and leverage trust in the relationship
1914



Involves three or more companies joined
together for a common purpose
Each organization in the network has
goals related to the network as well as
those focused on self-interest
Characterized by two types of change:
creating the initial network
(transorganizational development) and
managing change within an established
network
1915
Identification
Convention
Who should
belong to the
transorganizational
System (TS)?
• Relevant skills,
knowledge,
and resources
• Key stakeholders
Should a TS
be created?
• Costs and
benefits
• Task
perceptions
Organization
How to organize
for task
performance?
• Communication
• Leadership
• Policies and
procedures
Evaluation
How is the TS
performing?
• Performance
outcomes
• Quality of
interaction
• Member
satisfaction
1916


Create instability in the network
Manage the tipping point
◦ The Law of the Few
◦ Stickiness
◦ The Power of Context

Rely on self-organization
1917