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Strategy Dynamics Course - Class 8 – Policies and Decisions

NOTE: The frameworks in this class can be applied on their own, as well as being used as part of a more complete business model.

Strategic decision-making covers a wide range of issues confronting management that need organizing, to see where they arise and how they are connected. A more or less chronological sequence for an enterprise is:

  1. Whether to start the business in the first place.
  2. Choosing a strategic "position" that may work (who to serve, with what, and how – also known as the "business model".
  3. Designing a likely path to success.
  4. Steering strategy through time.
  5. Whether to extend or revise the strategy.

Standard strategy methods are somewhat helpful for items 1, 2 and 5, but say little about the scale and timing of performance that may be possible, and nothing about implementation – how to continually manage the strategy with key decisions across all parts of the business, working well together, in every period, and adapted as conditions change. The principles in this class apply with little modification to strategic challenges in public services and voluntary organizations.

Key issues addressed

  • The different categories of decision that arise in different stages of strategy
  • Understanding "policy" as a rule or guideline for making a decision, often by changing a previous value of that decision
  • Recognizing that most decisions of strategic significance affect resource growth and retention
  • The interrelated issues of evaluating strategic opportunities, choosing between them, and designing a path that might deliver success
  • The critical importance of good policy to steer strategy as time passes
  • Designing policy that allows decisions to balance conflicting aims
Class 8.0 – Policies and Decisions Summary - (40 min)
Why we need a time-phased action-plan to translate the broad principles of a strategy into business development and performance. How we use "policies" (rules based on performance information and targets) for guiding our decisions – and the principles for good policies.
Class 8.1 – The bigger picture of Strategy and Policy - (17 min)
The big, but rare strategic decisions that need to be taken at different stages in the life of a business, and the need for much more frequent, continuous decisions to manage the strategy and deliver performance. How strategy dynamics can help work out whether a strategy is plausible, before we decide to start.
Class 8.2 – Dealing with multiple objectives - (11 min)
The challenge of trying to pursue more than one aim at the same time (growth and profitability being a common example). How policies are modified to respond to more than one aim, and the danger of unforeseen consequences.
This course is supported by a series of worksheets provided in both PDF format and as Sysdea online models.
There are three exercises with class 8 which differ from earlier exercises in that you set parts of the policy-rules – which typically do not change much over time – and it is those rules that determine the actual decisions in each period. For the summary class the Manufacturing model is used and for segment 8.2 the IT company model is re-visited.
For segment 8.2 the IT company model is re-visited, looking at dealing wioth multiple objectives.

free access for teachers - login or register Additional materials are available to registered teachers as well as free access to the complete course. Login here or register here for more information.

Other resources and links

Books

Henry Mintzberg, Joseph Lampel, James Brian Quinn and Sumantra Ghoshal, 2002, The Strategy Process (4th edition), Prentice Hall; Hemel Hempstead, UK
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John Morecroft, Strategic Modelling and Business Dynamics: A Feedback Systems Approach. Wiley, 2007
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