Session 10&11 Flashcards
(24 cards)
What are the key challenges of implementing change
- Change requires tactics, but not all tactics are effective.
- Time Constraints: Execution takes time, and resources (days) are limited.
- Expected vs. Actual Adoption: Adoption starts slowly and accelerates over time.
How does Rogers’ Diffusion of Innovation explain people’s attitudes toward change?
Rogers’ model divides people into four categories based on their attitude toward change:
- Innovators & Naturals – A small group naturally inclined to accept change.
- Silent Majority – The largest group, more likely to follow once momentum builds.
- Cynically Inclined – Skeptical but persuadable.
- Resistors – Actively opposed to change.
Strategy Insight: Limited resources should be used to engage Innovators and the Silent Majority rather than trying to convince Resistors.
What are the key principles of change as a social process?
- Use latent support: People follow social cues (herd mentality).
- Champions matter: Find strong advocates for change.
- Momentum is key: Creating a sense of inevitability helps overcome cynicism.
- Prevent public opposition: Avoid pushing people into a public anti-change stance.
What is the matrix for implementing change based on resistance and power?
The matrix categorizes people by their resistance to change and power:
- High Power, Low Resistance → Innovators/Champions: Get early support.
- High Power, High Resistance → Hold Outs/Resistors: Listen & inform (don’t punish).
- Low Power, Low Resistance → Critical Mass: Mobilized by champions.
- Low Power, High Resistance → Cynics and Silent Majority (Bandwagon Effect).
What are the key steps to implementing change effectively?
Diagnosis:
- Understand social (informal) networks.
- Anticipate culture (norms, customs, rituals).
- Identify early adopters, gatekeepers, champions, and resistors.
Approach:
- Select targets carefully.
- Timing matters (right tactic at the right time for the right target).
- Build pace and momentum (create a sense of inevitability).
- Maintain strategic consistency and adaptability (stay calm, learn, and adjust).
Quote (Kurt Lewin): “If you want to understand an organization, change it.”
What are the key limitations of industry analysis in business strategy according to the concept of hypercompetition?
Porter’s Five Forces assumes:
- Industry structure drives competitive behavior.
- Industry structure is relatively stable.
However, competition changes industry structure:
- Schumpeterian Competition: Market leaders are overthrown by intermittent innovation.
- Hypercompetition: Intense and rapid competitive moves continuously create new competitive advantages while destroying existing ones.
How does hypercompetition differ from traditional industry analysis?
- Traditional View: Assumes industry structure is stable and determines competition.
- Hypercompetition View: Competitive strategy itself reshapes industry structure.
Hypercompetition is characterized by:
- Rapid and intense competitive moves.
- Continuous creation and destruction of competitive advantages.
- Firms constantly adapting to stay ahead.
What is value migration in business ecosystems, and how can firms influence it?
A business ecosystem includes organizations, institutions, and individuals that impact an enterprise.
Value migration occurs when changes in the business ecosystem shift value between firms.
- Firms can increase captured value by:
- Becoming a guardian of quality.
- Being irreplaceable.
- Reconfiguring the value chain.
How do business models help firms understand and influence business ecosystems?
- A business model is a simplified description of how a firm creates value.
- Business models help develop strategies to exploit opportunities in complex ecosystems.
- Example: Business Model Canvas (BMC) provides a structured approach to defining value creation.
What is business model innovation, and what are key actions to implement it?
Business Model Innovation = A strategic redesign of a company’s business model to:
- Create new value for customers.
- Capture new markets.
- Enhance competitive advantage.
Key actions:
- Re-evaluate the value proposition for customers.
- Redefine value delivery (e.g., product changes, service enhancements).
- Adjust revenue streams and cost structures to improve profitability and market position.
What are the stages of the industry lifecycle and the key drivers of industry evolution?
Stages of the Industry Lifecycle:
- Introduction – Low sales, high uncertainty.
- Growth – Rising sales, increasing adoption.
- Maturity – Peak sales, market saturation.
- Decline – Sales decrease, industry contraction.
Drivers of Industry Evolution: Demand growth and creation and diffusion of knowledge.
How do product and process innovation evolve over an industry’s lifecycle?
- Product innovation occurs early in an industry’s lifecycle and peaks before process innovation.
- Process innovation takes over as the industry matures, focusing on efficiency and cost reduction.
Over time:
- Product innovation declines.
- Process innovation becomes dominant.
How do industry lifecycle patterns vary, and what are examples of lifecycle regeneration?
- Technology-intensive industries (e.g., pharma, semiconductors) may retain emerging characteristics without clear decline.
- Basic necessity industries (e.g., food, construction, apparel) may reach maturity but not decline.
- Some industries regenerate through continuous innovation (e.g., motorcycles, televisions).
Examples of lifecycle regeneration:
- Motorcycles: Experienced multiple growth phases.
- Televisions: Evolved through B&W, color, portable, flat screens, and HDTV innovations.
Key Insight: Lifecycle models help predict industry evolution, but assuming a fixed pattern is risky.
How do industries evolve over time, and what are the key factors influencing competition?
Industries evolve from innovation-driven competition to cost and efficiency-driven competition.
Key industry changes:
- Customers become more knowledgeable and price-conscious.
- Diffusion of technology leads to standardized products.
- Production shifts to low-wage countries and becomes less R&D-intensive.
- Market saturation slows demand growth.
- Excess capacity increases, and distribution channels consolidate.
Competitive impacts:
- Price competition intensifies.
- Bargaining power of distributors increases.
- Firms seek new sources of differentiation.
Successful firms adapt their business strategies across lifecycle stages to survive cost pressures and industry consolidation.
What are the key sources of organizational inertia that make adaptation difficult?
- Organizational routines – Established patterns of coordinated activity limit capability development.
- Social & political structures – Change threatens existing social relationships and power dynamics.
- Conformity – Firms imitate common structures and strategies, leading to institutional isomorphism.
- Limited search – Bounded rationality leads to localized (suboptimal) solutions rather than optimal ones.
- Strategy-structure complementarities – Close-fitting organizational features make isolated changes dysfunctional, requiring systematic change.
What are the main challenges firms face when adapting to technological change?
Competence-enhancing vs. competence-destroying technologies
- Competence-destroying technologies require different resources and capabilities, making adaptation harder.
Architectural vs. component innovation
- Architectural innovations (new product architectures) are more difficult for firms to adapt to than component-level innovations.
Sustaining vs. disruptive technologies
- Sustaining technologies improve existing performance attributes and are easier to adopt.
- Disruptive technologies introduce new performance attributes, making adaptation more challenging.
What are dual strategies in strategic change, and how does organizational ambidexterity balance them?
Dual Strategies require firms to:
- Exploit existing resources, capabilities, and market position.
- Explore new opportunities to prepare for the future.
Organizational ambidexterity balances two conflicting strategies:
- Exploitation – Leveraging existing strengths.
- Exploration – Seeking new, innovative solutions.
What are the two ways firms can enact exploration and exploitation simultaneously?
1.Structural Ambidexterity
- Separate organizational units handle exploitation and exploration.
- Different employees, incentives, structures, and job designs are used.
2.Contextual Ambidexterity
- The same people/units engage in both exploitation and exploration.
- Employees switch between activities depending on the situation.
What are strategies to overcome organizational inertia?
Organizations resist change due to inertia. Strategies to overcome this include:
- Create perception of crisis – Employees may accept change if they believe a crisis exists.
- Establish stretch targets – Ambitious goals can motivate effort but may discourage risk-taking.
- Organizational initiatives – Top-down changes can drive transformation if employees support them.
- Reorganizing company structure – Restructuring breaks power bases and enabels external hires but may erode trust and tacit knowledge.
- New leadership – Existing leaders often resist change due to investment in the status quo.
- Scenario analysis – A structured approach to anticipating external changes and preparing for the future.
What are the two types of knowledge as a basis for sustainable competitive advantage?
1. Explicit Knowledge (“Knowing About”)
Characteristics:
- Easy and cheap to transfer.
- A “public” good (non-exclusive).
Implications:
- Easy to exploit within the firm.
- Hard to protect from rivals → weak basis for competitive advantage.
2. Tacit Knowledge (“Knowing How”)
Characteristics:
- Difficult to articulate or codify.
- Requires practice and observation.
Implications:
- Harder to exploit but easier to protect from rivals → stronger basis for competitive advantage.
What are the key processes in knowledge management, and what are some examples?
Involves identification, measurement, retention, transfer, and analysis of knowledge.
Examples:
- Patent licensing (Texas Instruments).
- Employee databases (BP).
- Best practice sharing (Ford).
- Big data analytics (Walmart).
What are the key methods of knowledge conversion and systematization?
Knowledge Conversion Methods
- Socialization – Sharing tacit knowledge.
- Externalization – Documenting tacit knowledge.
- Combination – Synthesizing explicit knowledge.
- Internalization – Learning explicit knowledge.
Systematization
Definition: Embedding knowledge into organizational processes.
- Firms must balance explicit and tacit knowledge for a competitive advantage.
- Tacit knowledge is harder to replicate but more valuable long-term.
- Big data & AI are crucial for modern knowledge management.
What are the key differences between operating and innovating organizations?
Operating Organizations:
- Bureaucratic & hierarchical structure.
- Eliminate variation to maintain efficiency.
- Financial rewards based on promotion.
- Recruitment focuses on specialized skills.
Innovating Organizations:
- Flat & flexible structure.
- Encourages variation and idea generations
- Rewards autonomy & participation.
- Hires creative individuals with technical expertise.
What are key organizational initiatives to stimulate innovation?
- Cross-functional teams – Improve knowledge integration.
- Product champions – Link invention with commercialization.
- Buying innovation – Acquiring start-ups to enhance innovation.
- Open innovation – Sharing knowledge across firms.
- Corporate incubators – Independent innovation units within large firms.
