|Politecnico di Torino|
|Academic Year 2016/17|
Strategy and Organization
Master of science-level of the Bologna process in Engineering And Management - Torino
Strategic Management and Organization Design are deeply intertwined disciplinary areas in management. In this course their perspectives are integrated in order to show how firms are able to create superior economic value through appropriate strategic decisions related to market positioning, investments in technology resources and organization design.
In so doing, the course aims at equipping students in management with the fundamentals of strategic thinking that is needed to firms to undertake appropriate competitive actions. The foundations of strategic thinking lie in an array of concepts, frameworks and techniques that is needed by managers and business analysts to conduct strategic analysis and to take appropriate decisions accordingly. As such, the course illustrates the fundamentals of strategic analyses, giving a high emphasis on the role that technological change have in shaping competitive dynamics and in offering new ways to develop valuable products for customers. In so doing, the course explores the interdependencies that strategic management has with the main issues that managers have to deal with when they design the firm’s organizational structure and business processes. In this regard, the course discuss the fit between the firm’s strategy, its organization structure and its competitive environment that is at the origin of a firm’s high competitiveness.
At the accomplishment of the course, students should be able to think according to a strategic perspective in dealing with the traditional tools of strategic analysis in order to assess how in a given industry firms should take decisions by considering the threats and opportunities related to global competition and demand, technological change, and other competitive forces existing in their relevant market.
Importance of Strategy and Organization Design in the professional background of the Managerial Engineer
In the curriculum of a student in Management and Engineering, Strategic management and Organization design have a central importance irrespective of the choices and the chances that students will have in the job market. For example, a graduate in Engineering and Management may work as a strategic analyst in the Strategic Planning department or a in a consulting company and can be thus involved in making analysis whose outcomes are inputs to the strategic actions/decisions made by the top management team. For graduates working in other functional departments (e.g. Manufacturing, Logistics , Sales, Management of Information Systems) studying Strategic management will be important to understand how the firm’s business strategy and the trends in its competitive environment (technology evolution, global competition and demand, etc.) influence strategy and operations within each function and require an alignment between the business strategy and functional strategies/operations. In all cases, progress in career always means being required more managerial skills and not only competencies that are specific of the task and the functional department (a «T-shaped» competence profile).
L1. Introduction (3 hours).
Course objectives and structure. Structure of the course andthe teaching material. Rules for the exam.
Part I – The tools of Strategy Analysis (27 hours)
L2. Strategy and the Strategic Management Process (6 hours)
o Program: 1. Strategy definition, Strategic Management and Competitive Advantage; 2. Strategic fit; properties of successful strategies 3. What is a competitive advantage and how you measure it. 4. Competitive positioning and market segment. 5. Introduction to Generic Competitive Strategies and to value creation mechanisms. 6. The strategic management process; deliberate and emergent strategies. The strategic management process in the organization. What are "strategic decisions"?
Grant. Chapters 1 and 2. (from the 7th edition or the 8th edition)
Porter, M. What is Strategy, HBR
L3. The external environment and Industry analysis: the fundamentals (9 hours)
o Program: 1. Structure-Conduct-Performance Model. 2. The Five Forces Model. 3. Internet and industry structure. 4. Segmentation and Defining Relevant Markets. 5. Critical Success factors in a market segment
Grant. Chapters 3 and 4 (from the 7th edition or the 8th edition).
o Case Studies:
The US Airline Industry in 2012 (from Grant, R.M.)
Genzyme (provided online by the instructors)
L4. The Analysis of the Firm: Evaluating the Firm’s Resources and Capabilities (12 hours)
o Program: 1.Resource and Capabilities: what they are, VRIO Framework, and assessment; the core competence view 3. Barriers to Imitation and Development Dynamics of Capabilities (e.g. acquiring or developing capabilities; knowledge processes that promote capability development).4.
o 5. the geographical distribution of resources and capabilities : the Porter’s Diamond model
Book: Grant: Chapters 5 (from the 7th or the 8th edition)
o Case studies:
Lands’ End (available online). Topics: VRIO framework, sustainability of competitive advantages in Internet-related markets, unbundling of the value chain.
KODAK AND THE DIGITAL REVOLUTION, Harvard Business Online n° 705448. Topics: strategies based on resources and capabilities; strategic decisions under technological discontinuities. role of analogy, conflict and cognitive biases in strategy thinking.
Part II. The organization of the firm (21 hours)
L5. The Vertical Integration of the Firm (4.5 hours)
o Program: 1) make versus buy: reasons to make and to buy; 2) Transaction Costs Economics; 3) vertical integration and outsourcing : real-world evidence.
Besanko & Dranove: Chapters 2 and 3.
L6. Fundamentals of Organization Design (16.5 hours)
o 1) Specialization, Control and Coordination. 2) how the organization functions: The five fundamental coordination mechanisms and the five basic parts of the organization; (3 hours)
o 3) design of structures: grouping; (3 hours)
o 4) design of lateral linkages; 5) design of decision-making systems: horizontal and vertical decentralization. (3 hours)
o contingency approach (3 hours)
o 6) bureaucratic vs. organic organizations and the environment
o 7) technology and the organization
o excerpt from H. Mintzberg. The Structuring of the Organization (provided by the instructors)
o Case Studies: (3 hours + 3 hours)
o Zara: IT for fast fashion, HBS.
o Procter & Gamble
Part III. The strategy in the firm’s context (21 hours)
L7. Business Strategies: Cost Leadership and Product Differentiation (6 hours)
o Program:1. source of cost advantages. Value of cost leadership.2. Value of Differentiation Advantages. Design-Driven Strategies. 3. Organizing to implement Cost leadership and Product Differentiation Strategies.
o Grant: Chapters 8, 9 and 10 (from the 7th edition) or Chapter 7 (from the 8th edition). Besanko Chapters
L8. Strategies in technology-based industries and the management of innovation (15 hours)
i. 1. Industry Life cycle, Technology Diffusion and Technological Discontinuities (Abernathy and Utterback Model) (1.5 hours)
ii. Industry architecture; Life cycle of the organization: ambidexterity; Issues in Management of Innovation (1.5 hours)
iii. Appropriation of Value; appropriability regimes: patents, industrial secrets (6 hours) (6 hours)
i. Grant: Chapters 11 and 12 (from the 7th edition) or Chapter 8 and 9 (from the 8th edition).
c. Case studies:
i. APPLE Inc. 2008, Harvard Business Online n°70848. (topics: industry analysis, dominant design, industry architecture) (3 hours)
ii. Abgenix, Harvard Business Online, topics: industry architecture, strategic decisions, dynamic capabilities (3 hours)
The learning method will be based on combining two types of lectures centred on two different and complementary approaches. Traditional frontal lectures will illustrate relevant theories and concepts from prominent scholars in strategic management and their application in tools for strategic analysis.
Laboratories will be based on a collective case study discussion in which students will be required to apply the tools and the concepts learned during the lectures on theory. Case study discussion will require that students will read material that will be provided by the instructors in advance. Finally, the talks of some invited speakers from business community (e.g. managers with an international experience) will provide an important complement to frontal lectures and laboratories. These talks will take place outside the normal course schedule.
When students are presented with a case, they place themselves in the role of the decision maker: read through the situation and identify the problem they are faced with.
To get the most out of cases, students read and reflect on the case individually, and then meet in learning teams before class to "warm up" and discuss their findings with other classmates. In class—under the questioning and guidance of the professor—students probe underlying issues, compare different alternatives, and suggest courses of action in light of the organization's objectives.
Texts, readings, handouts and other learning resources
A. Custom Book, that combines chapters from :
a. Grant, R. Contemporary Strategic analysis: Text and Cases, John Wiley, 8th edition (or the Text version without cases, but students are required to prepare some case studies from this book)
b. Besanko, Dranove, Economics of Strategy, John Wiley
The book is available on the campus’s CELID bookstore.
B. Excerpt of Organization Design (delivered by the instructors)
C. Collection of articles provided by the instructors and made available on the course’s web platform
D. Case study package, available on Harvard Business Publishing at the following page: https://cb.hbsp.harvard.edu/cbmp/import/ptos/35709857. Students need to register to the HBS’s learning platform to purchase the case studies.
E. Slides, made available on the course’s web platform
Assessment and grading criteria
a. A written Exam. Minimum threshold to pass the exam: 14 points.
b. An Optional Oral Exam, to be taken immediately after the disclosure of the written exam grades. Students can decide not to take the oral exam, and in that case their maximum possible grade will be 27/30.
c. A mandatory team work regarding the strategic analysis of an industry and the definition of strategic recommendations for successfully competing within the industry
Programma definitivo per l'A.A.2016/17