21 November 2008

Strategic Management Dynamics - Chapter 4 - Interdepence and the strategic architecture.

This Chapter adds to the ideas that performance depends on resources and that these accumulate and deplete the further observation that resource-building depends on existing resources – a rigorous, quantified perspective on the principle of 'complementary resources'. It shows how combining these three basic causal principles enables the laying out of an integrated core business system for any kind of organisation. The basic math behind these principles is explained, and how this relates to a simple spreadsheet-perspective on modelling business performance. The Chapter shows how to use the resulting 'strategic architecture' to both understand and anticipate organizations' performance. It explains how interdependence creates feedback mechanisms that give rise to common phenomena of performance dynamics - escalation, collapse and limits-to-growth. Investigation of how strategic architectures behave shows that minimum resource levels are required for an enterprise to function at all, and that there is a maximum performance limit that can be extracted from a finite set of resources.

Includes connections to the following frameworks and concepts: The Bass Diffusion model, Tipping Points, Issue Tree Analysis, Value Drivers, Balanced Scorecard, Strategy Maps.

Materials to support Chapter 4 of Strategic Management Dynamics include -

For registered site users:

Worksheets 4 and 5 that accompany Strategic Management Dynamics, both in PDF and mystrategy format - Login above or register here

For registered online students:

Class lecture segments.
Additional exercises, including video demonstrations.

For information on our 10-week online course in Strategy Dynamics see the course information page

For registered Teachers:

PDF slides from the book
Solutions to end of chapter questions.

If you hold a faculty position at a university and wish to apply for teacher registration see registration links here

Other resources and links

Software

Download the mystrategy reader for use in the worksheets and exercises here

The Brand Management Microworld and the LoFare Airlines Microworld are also referenced in this chapter. For more information see these pages
Brands | LoFare

Books

Prahalad, C.K. (2005) The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, Wharton School Publishing, Upper Saddle River NJ.


Robert Kaplan and David Norton, The Balanced Scorecard, (1996), Harvard Business School Press: Boston MA


Kaplan, R. and Norton, D. (2004) Strategy Maps, Harvard Business School Press, Boston MA.