Daniel Kipley

Societal Strategy for the Business Firm

Beginning in the 1950s, firms in the USA and Europe have come under increasing pressures from government, consumers, and environmental protection groups. In the USA, which remained firmly committed to the capitalist free market ideology, some firms responded to the challenge by embracing social causes and engaging in social audits aimed at establishing the firm as a responsible member of society.

Extending Ansoff’s Strategic Diagnosis Model

Given the complex and disruptive open-ended dynamics in the current dynamic global environment, senior management recognizes the need for a formalized, consistent, and comprehensive framework to analyze the firm’s strategic posture. Modern assessment tools, such as H. Igor Ansoff’s seminal contributions to strategic diagnosis, primarily focused on identifying and enhancing the firm’s strategic performance potential through the analysis of the industry’s environmental turbulence level relative to the firm’s aggressiveness and responsiveness of capability. Other epistemic modeling techniques envisage Porter’s generic strategic positions, Strengths, Weaknesses, Opportunities, Threats (SWOT), and Resource-Based View as useful methodologies to aid in the planning process. All are complex and involve multiple managerial perspectives. Over the last two decades, attempts have been made to comprehensively classify the firm’s future competitive position. Most of these proposals utilized matrices to depict the position, such as the Boston Consulting Group, point positioning, and dispersed positioning. The GE/McKinsey later enhanced this typology by expanding to 3 × 3, contributing to management’s deeper understanding of the firm’s position. Both types of assessments, Ansoff’s strategic diagnosis and positional matrices, are invaluable strategic tools for firms. However, it could be argued that these positional analyses singularly reflect a blind spot in modeling the firm’s future strategic performance potential, as neither considers the interactions of the other. This article is conceptual and takes a different approach from earlier methodologies. Although conceptual, the article aims to present a robust model combining Ansoff’s strategic diagnosis with elements of the performance matrices to provide the management with an enriched capability to evaluate the firm’s current and future performance position.

Institutionalizing Strategic Responsiveness

While the preceding chapter was concerned with effective ‘pushing’ of a discontinuous change through the firm and assuring its effectiveness and stability; in this chapter, we turn attention to converting the firm into a habitual strategic actor.

Strategic Dimensions of Technology

When the concept of strategy was first developing, the focus was on economic and competitive variables. R&D, like production, was treated as a functional area to which strategic decisions could be assigned for ‘implementation.’

Competitive Posture Analysis in Turbulent Environments

When systematic strategic planning was first introduced during the 1960s, the initial focus was on diversification of the firm. But as firms increasingly faced strategic challenges from technological turbulence, changing competition, saturation of growth, and sociopolitical pressures, it became evident that the problems posed by these challenges could not be resolved simply by adding new business areas to the firm. As a result, in the 1970s the strategist’s attention turned from diversification to optimizing the firm’s competitive strategies in its historical businesses and then to optimizing the firm’s total business portfolio. This shift was accelerated by the fact that the prospects for the different historical businesses of the firm became progressively differentiated from one another with respect to future growth, profitability, and strategic vulnerability.

Diagnosing Future General Management Capability

This chapter presents a procedure by which a firm can determine its future general management capability profile. The first version of this procedure appeared in 1976 (Ansoff et al. in From Strategic Planning to Strategic Management. Wiley, New York, 1976-F). The revised procedure presented here has been repeatedly tested in practice with satisfactory results.

Dispersed Positioning in Competitive Analysis

This chapter is based on early research and collaboration between Ansoff and two of his German friends, Werner Kirsch, and Peter Roventa. Kirsch and Roventa’s idea was that the concept of weak signals, which Ansoff developed for analyzing issues in highly turbulent environments, needs to be applied to strategic portfolio analysis. This chapter is based on the paper which resulted from this exciting collaboration [HIA].

General Managers for Diversified Firms

This chapter is based on a paper which Igor Ansoff wrote with Dick Brandenburg in 1967. In the paper, they predicted the qualifications which general managers would have to bring to their jobs during the last quarter of the twentieth century. Their principal predictions about complexities and diversity of demands on the general managers are currently observable in practice.

Alternative Methods for Managing a Discontinuous Change

The preceding two section chapters described the attitude toward resistance which has historically been found in firms and most other organizations. This attitude can be summed up, to borrow from Senator Moynahan, as ‘benign neglect.’ Firms introduce new strategies without anticipating, nor providing, for the resistance, and they deal with it reactively when it arises. Ansoff noted ‘this attitude may be justified when the changes in strategy are evolutionary, minor and incremental, because the level of resistance to these will not be significant enough to warrant special attention. But as discontinuous strategy changes become frequent, the costs and delays due to resistance will increasingly focus the firm’s attention on managing the transition process.’

Evolution of Management Systems

The management system used by a firm is a determining component of the firm’s responsiveness to environmental changes because it determines the way that management perceives environmental challenges, diagnoses their impact on the firm, decides what actions to take, and implements the decisions.