Course Knowledge Management

Topic Strategic Management Perspectives

Faculty Aroor Aatmika Shetty
Knowledge Management
Learning Objectives

At the end of this session, you will be able to:

❑Explain the differences between the industrial organization tradition and the
institutionalist perspective in strategic thinking
❑Understand the contribution of the resource-based view and the knowledge-
based view of the firm to strategic management
❑ Discuss the development of IS strategy and its influence on knowledge
management strategies
 Knowledge Management
Strategic Management Perspectives

❑The two dominant pillars of knowledge management are technology and

human resource considerations
❑Explore how KM strategies may relate to a firm’s business strategy
❑ Similar to philosophical perspectives, there is a diverse range of viewpoints
and schools of thought on the nature of strategy and competitive change.
❑This session begins by exploring the meaning of strategy in terms of
deliberate and emergent strategies as our goals and plans may not be
realised as expected
 Strategic management: schools of thought

❑ Strategy : A plan of action linked to achieving one’s goals

❑ An intended strategy is the strategy that an organization hopes to execute. Intended

strategies are usually described in detail within an organization’s strategic plan.

❑ Realised strategy : a product of a firm’s intended strategy (i.e., what the firm planned to
do), the firm’s deliberate strategy (i.e., the parts of the intended strategy that the firm
continues to pursue over time), and its emergent strategy (i.e., what the firm did in reaction
to unexpected opportunities and challenges)

❑ Emergent Strategy : An Organizational Strategy that emerged over time due to firms
learning over time
 Strategic management: schools of thought

•
Industrial organisation tradition

❑In the industrial organisation (IO) tradition, the relationship between the firm
and industry is central

❑The performance of a firm is determined by the structure of the industry and

its market structures

❑ Many of the principal models about market structure and competition come
from rational microeconomic theory

❑ At its most basic level, the market is concerned with the supply and demand of
goods and services and the elasticity or inelasticity of the demand curve
 Industrial organisation tradition

❑cost leadership – reducing the cost of product and services relative

to competitors with a drop in quality. Example : Walmart

❑differentiation – providing products or services which are unique or

different and valued by customers. Example : Apple

❑ focus – providing high perceived value justifying higher prices in

certain market segments such as traditional corner shops compared
with supermarkets. Example : Rolls Royce
Industrial organisation tradition

❑In the planning model, adopted by most MBA students and

executives, the traditional approach to strategy is along the
following rather mechanical lines

❑PESTEL
❑SWOT
❑Porter’s Five Force Model
Reflect on the strategy in your organization. Describe how
you perceive the corporate strategy of your organization. To
what extent were you consulted in the preparation of it?
In relation to your organization, what do words such as
‘mission’, ‘vision’ and ‘strategy’ mean to you? How alive are
those words in informing your everyday actions? How typical
are your views compared with those of colleagues in the
organization? Is there any advice you would give to senior
managers in the preparation of annual strategies?
Industrial organisation tradition

Disadvantages :

❑Only 10 per cent of formulated strategies get implemented.

❑Separating thought from action by isolating the formulation and
implementation processes.
❑Assuming that firms and individuals have perfect knowledge of
market changes when in reality there may be considerable ignorance
leading to questioning of the rationalist tenets of the microeconomic
tradition.
❑ No real conception of competition as a process over time.
❑ Environments assumed to be predominantly stable.
 Institutionalist perspective

❑It suggests that competitive forces are inherently unstable and in a continual
process of ‘creative destruction’

❑ Institutional economics places greater emphasis on agents (individuals) and

suggests that their economic relations are determined through their experience
and learning over time rather than through some form of rational maximisation
behaviour

❑ Strategy from an institutionalist perspective is seen as a process over time and

considered synonymous with strategic change

❑ Strategic change is informed by the managers’ (or other agents) understanding

and learning of a situation over time
Institutionalist perspective
 Resource Based View

❑It suggests that competitive forces are inherently unstable and in a continual
process of ‘creative destruction’

❑ Institutional economics places greater emphasis on agents (individuals) and

suggests that their economic relations are determined through their experience
and learning over time rather than through some form of rational maximisation
behaviour

❑ Strategy from an institutionalist perspective is seen as a process over time and

considered synonymous with strategic change

❑ Strategic change is informed by the managers’ (or other agents) understanding

and learning of a situation over time
Resource Based View

❑ Resources are distributed heterogeneously across firms.

❑ Resources have a ‘stickiness’ and cannot be transferred from firm to firm
without a cost.
❑ Resources are rare – not widely held.
❑ Resources are valuable – they promote efficiency and effectiveness.
❑ Resources are not imitable and cannot be replicated easily by competitors.
❑ Resources are not substitutable – other resources cannot fulfil the same
functions.
❑ Resources are not transferable and cannot be bought in resource markets.
Developing a knowledge management strategy
Developing a knowledge management strategy
Developing a knowledge management strategy