MESI Research Plan 20070116 for MESI Report

8/2/2019 MESI Research Plan 20070116 for MESI Report

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MANAGEMENT OF EMERGING STRATEGIC ISSUES

A RESEARCH PLANSUBMITTEDTOTHE NATIONAL TECHNOLOGYAGENCYTEKES

PROJECT COORDINATOR:

HELSINKI UNIVERSITYOF TECHNOLOGY

PROFESSOR TOMI LAAMANENDepartment of Industrial Engineering and Management

Helsinki University of Technology

P.O. Box 5500, FIN-02015 TKK, FinlandEmail:[email protected]

PROFESSOR MARKKU MAULADepartment of Industrial Engineering and Management

Helsinki University of TechnologyP.O. Box 5500, FIN-02015 TKK, Finland

Email: [email protected]

DR. MATTI KEIJOLADepartment of Industrial Engineering and Management

Helsinki University of TechnologyP.O.Box 5500, 02105 TKK, Finland

Email: [email protected]

PARTICIPATING COMPANIES

Nokia OyjSanomaWSOY Oyj

Vaisala OyjSuomen Posti Oyj
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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EXECUTIVE SUMMARY

The scope and number of strategic business issues faced today by Finnishcompanies striving to operate and be successful internationally has

increased with the increasing pace and complexity of the increasinglyinternational business environment.

This research plan proposes a project that aims at contributing to thepractices of technology-based firms for managing emerging strategicissues - be they threats or opportunities. The proposed project is acontinuation of a two-year long corporate-funded research project thatfocused on the strategic issue management practices of a leading Finnishtechnology-based corporation, Nokia Oyjs Corporate Strategy unit. In thisfeasibility phase, a detailed understanding emerged on what are Nokiasand some of the other world leading technology-based large firms best

practices in the area strategic issue management (IBM, HP, and GE).

Companies have varying ways of identifying and dealing with their mostcritical strategic questions. This process is, however, typically anemergent one, not necessarily optimally structured to enable theeffective identification of the most critical questions and the appropriateallocation of top management attention and corporate intelligencesupport to answer the identified strategic questions. The proposedresearch project is positioned to (1) deepen the knowledge gained fromthe pre-project phase, (2) contrast it to the experiences of othercompanies, (3) develop practices that would be applicable for both large

and small technology-based firms for managing their businesses so thatthey would be able to benefit optimally from emerging opportunities andbe prepared to counter emerging threats, and (4) leverage thesepractices to all the participating Finnish firms.

The research theme is at the forefront of management research. At themoment, other researchers focusing on similar topics are around 1 to 2years behind in understanding the dynamism of how emerging strategicissues should be dealt with inside firms. Thus, in addition to the practicalcontribution, also the academic contribution of this research project canbe expected to be novel. The empirical analyses of our research project

include (1) company-specific strategic issue management systemdevelopment (Nokia, SanomaWSOY, Posti), (2) an in-depth analysis of anemerging strategic issue (Vaisala and Posti) and (3) a survey of thebroader strategic issue management practices of Finnish technology-based firms. The main research questions to be answered include: Whatis the state of art in dynamic strategy formation in companies? What arethe best practices? What improvements can be considered? How to


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Research Proposal on Management of Emerging Strategic Issues 3/18

institutionalize them? What results to expect?. The results of the projectwill include new knowledge and improved practices for Finnish companiesto manage their strategy work, thereby increasing their success andviability in dynamic global markets.

In nutshell, the proposed project builds on a pre-project feasibility studyalready financed by and conducted with Nokia. The project will be basedon in-depth case studies involving three major Finnish industrialcorporations as well as on benchmarking sessions with majorinternational companies (Shell and 3M). Additionally, considerationsrelevant and applicable to smaller, growth companies will be addressed.The project will thus have a rare access to a unique set of real corporatedata of sensitive and confidential nature. The proposed project is plannedto last for two years and will be carried out by the Institute of Strategyand International Business together with staff from the participatingcompanies.


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TABLE OF CONTENTS

1 INTRODUCTION ..............................................................................................................................................1

2 PROJECT MOTIVATION ................................................................................................................................3

3 BACKGROUND RESEARCH ..........................................................................................................................4

4 THE MESI PROJECT .......................................................................................................................................6

4.1 RESEARCH QUESTIONS............................................................................................................................ 6

4.2 RESEARCH DESIGN................................................................................................................................. 6

4.3 WORKPACKAGES (WP) .............. ............... .............. .............. .............. .............. .............. ..... ..... ..... ......7

4.3.1 Work Package 1 Project Management .............................................................. ....................7

4.3.2 Work Package 2 Company Case Studies ........................................................................ ...... .74.3.3 Work Package 3 Benchmarking ............................................................................................8

4.3.4 Work Package 4 Growth Company Considerations ...............................................................8

4.3.5 Work Package 5 Integration .................................................................................................9

4.4 PROJECT ORGANIZATION, RESOURCES.......................................................................................................94.5 PROJECT SCHEDULE................................................................................................................................ 9

5 REFERENCES ..................................................................................................................................................11

APPENDIX 1, THE CONCEPT OF THE STRATEGIC AGENDA .............................................................14

APPENDIX 2 LIST OF RESEARCH QUESTIONS .....................................................................................16

APPENDIX 3, WP 2, CASE STUDIES .............................................................................................................17

METHODOLOGY........................................................................................................................................ 18

CONTRIBUTION.........................................................................................................................................18

DELIVERABLESANDDISSEMINATION.............................................................................................................19

APPENDIX 4, WP 3, BENCHMARKING .......................................................................................................20

METHODOLOGY........................................................................................................................................ 20

CONTRIBUTION.........................................................................................................................................20


APPENDIX 5, WP 4, GROWTH COMPANY CONSIDERATIONS ...........................................................22

METHODOLOGY........................................................................................................................................ 22

CONTRIBUTION.........................................................................................................................................22


APPENDIX 6, WP 5, INTEGRATION ............................................................................................................24

METHODOLOGY........................................................................................................................................ 24

CONTRIBUTION.........................................................................................................................................24



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1 INTRODUCTION

The scope of strategic business issues faced by Finnish companiesstriving to operate and be successful internationally has widened due toan increasingly broad geographic scope and the increasing complexity oftechnology. Strategic issues arise not only through the formal, periodicstrategic planning processes in companies. They can, and quite often doarise unpredictably due to new insights, unexpected advances intechnology or competitive activities in the market place. The existingresearch acknowledges this emergence, but does not provide anyapplicable ways of dealing with this kind of incidents.

All companies have their way of identifying and dealing with these, their

most critical strategic questions. However, this process of managingemerging strategic issues is typically non-structured, not necessarilyoptimally suited to enable the effective identification of the most criticalquestions and the appropriate allocation of top management attentionand corporate intelligence support to answer the identified strategicquestions. Despite the past research during 1960s, 1970s, and 1980s intothe domain of strategic issues (SI), strategic issue management (SIM),and strategic issue management systems (SIMS) there is a scarcityapplicable approaches for firms to use in improving their attention focusand distribution in strategic issue management processes.

The Institute of Strategy and International Business (ISIB) at HelsinkiUniversity of Technology together with Nokias Corporate Strategy Unithave been addressing the challenge described above using Nokiasstrategy processes as a case. The research project proposed here buildson the work that focused on the Nokia case and extends it to cover otherworld class companies in Finland and abroad so as to create results thatare applicable to a wider set of large and growth companies. The Finnishcase companies, in addition to Nokia Oyj, will be Suomen Posti Oyj,SanomaWSOY Oyj, and Vaisala Oyj. On the international sidebenchmarking sessions have already been scheduled with the corporatestrategic planning units of Shell International and the 3M Corporation.

The extended empirical data to be collected in the company cases will berare in that it will be about a critical aspect of a companys business andas such is highly confidential and sensitive in nature. The data will,however, help create and test new theories and practices regardingstrategic issue management in companies.


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Evidence about the relevance of the proposed study to the scientificcommunity can be seen in that a paper describing the qualitative resultsbased on the Nokia case was accepted and presented at the StrategicManagement Society 2004 Conference (Kajanto et al, 2004) and that asecond paper describing the quantitative results of the case has been

accepted for presentation at the Strategic Management Society 2005Conference (Kajanto et al, 2005).

This document is structured as follows. Section 2 outlines the rationale forthe project. In Section 3, a review of the background research ispresented and Section 4 presents the actual research plan for the projectand its work packages.


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2 PROJECT MOTIVATION

Theoretical contribution

Strategic planning practices have undergone significant changes from the1960s and 1970s to the late 1990s. Grant (2003) shows how strategicdecision-making in major oil companies in the late 1990s was occurringfor the most part outside of companies strategic planning systems. Thestrategic planning systems were less formal than in the earlier decadesand numbers of corporate strategy staffs were greatly reduced. Grant(2003) argues that the effectiveness of the companies strategic planningmay have deteriorated in three respects. First, the shortening of theplanning horizons may reflect a shift in top management priority from

long-term development to short- and medium term performance goals.Second, the transfer of responsibility from staff planners to linemanagers, while solving the problems of formalization and detachment,also entailed a loss of analytical capability. Third, while breaking down therigidities of the old formalized planning systems and embracing emergentstrategy-making processes, the companies had done little in terms ofpositive measures to encourage innovation in strategy making. Ourproject aims to create new insights to the planning practices ofcompanies and strives for innovation in their dynamic strategicmanagement for the benefit of Finnish companies.

Cyert and March (1963) noted in their classical book on A BehavioralTheory of the Firm that organizational decision-making is commonly inmany ways only boundedly rational, driven by local problem-driven,temporally sequential search processes. Later research, including Ansoffswork (1965; 1984), the subsequent work on strategic issue management(Dutton et al., 1987a, 1987b), and the work on attention-based view oforganizational decision making (Ocasio, 1997) has picked up thechallenge posed by Cyert and March (1963) and Cohen, March, and Olsen(1972) for improving organizational strategic decision-making practices,but even today, there is still lack of applicable approaches for firms to usein improving their attention focus and distribution in strategic issue

management processes. Our project will contribute to research instrategic issue management with new theories based on empiricalresults.

Practical contribution


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Companies participating in the project will directly benefit from theproject by improving their strategy processes. They learn to consider theirprocesses for how best to select, allocate and direct attention toemerging strategic issues depending on the envisaged characteristics ofthe issues and the resources at their disposal. We expect that Finnish

companies applying the results of the project will increase their viability inthe increasingly complex and competitive global business environment.By dynamically managing a right set of strategic issues, a companymakes efficient use of management resources and thus improves itsstrategic direction, success and viability. Failure to do so may forebodeunsatisfactory performance in the future. Methods and processes to beconceived for growth companies are expected to improve the rates ofsuccess for some of the fast growing Finnish companies adopting themethods and processes.

3 BACKGROUND RESEARCH

Extending Grants (2003) work on oil companies strategic planningpractices, we have examined the corporate level strategic planningpractices of major technology-based firms in the information andcommunications technology sectors. We have carried out a 18 monthlong extensive in-depth case study of Nokias corporate strategic planningand issue management practices with managers involved with thedevelopment and management of the corporate level strategic planningpractices. In addition, we have interviewed representatives of other firms

as benchmarks and studied secondary material that is publicly availableon the strategy planning practices of Hewlett-Packard and IBM. In 2000HP developed its strategy process as part of its Reinvention campaignby introducing different schemes to facilitate emergent strategic decision-making (Zell et al., 2004). Similarly, starting in 1999 IBM replaced itsannual strategy review process with a year-round series of topicallyfocused strategic assessments (CSB, 2000). The goals of IBMs newprocess were (1) to ensure that strategic issues are addressed quickly, (2)to create a more rigorous decision-making process that would challengeassumptions and broaden their view of available options, and (3) toaddress cross-unit issues missed in traditional business unit-centered

process (CSB, 2000).

We have found three archetypical configurations of strategic issuemanagement systems optimized for different purposes and were able tocompare the benefits and challenges involved in each of them. Theconfigurations and their characteristics are shown in Figure 1.


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Basic assumption

Main emphasis

Issue analysis

Issue identification

Implementation plan

Speed of action

Potential challenges

Detailed analysis of

strategic issues

Fast, in-depth

analysis is the key

Analysis

Detailed analysis

practices and tools

Emergent,

one-time

Part of the analysis

recommendations

Relatively fast after

the analysis results

Analysis cannot

always imply optimal

implementation plan

Detailed analysis of

strategic issues

Fast, in-depth

analysis is the key

Analysis

Detailed analysis

practices and tools

Emergent,

one-time

Part of the analysis

recommendations

Relatively fast after

the analysis results

Analysis cannot

always imply optimal

implementation plan

Facilitated group

work on issues

Efficiency in team

work is the key

Implementation

Utilizing teams

analysis intelligence

Emergent,

one-time

Emerges as a result

of the group work

Determined at the

initiation of work

Team self-sufficiency,

team member choice,

limited time frame

Facilitated group

work on issues

Efficiency in team

work is the key

Implementation

Utilizing teams

analysis intelligence

Emergent,

one-time

Emerges as a result

of the group work

Determined at the

initiation of work

Team self-sufficiency,

team member choice,

limited time frame

On-going strategic

issue management

Preserving valuable

options is the key

Both

Varying profiles

of resource use

Emergent and

cumulative

Sensemaking result

emerging over time

Non-determinable,

options preservation

Saturation of the

process and rejection

of new issues, speed

On-going strategic

issue management

Preserving valuable

options is the key

Both

Varying profiles

of resource use

Emergent and

cumulative

Sensemaking result

emerging over time

Non-determinable,

options preservation

Saturation of the

process and rejection

of new issues, speed

Figure 1. Three archetypical strategic issue managementconfigurations


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4 THE MESI PROJECT

4.1 Research QuestionsThe main questions to be answered in the proposed empirical researchare: What is the state of art in dynamic strategy formation in companies?What are the best practices? What improvements can be considered?How to institutionalize them? What results to expect? We structure ourdetailed research questions according to our model of the corporatestrategic agenda. The elements of the agenda schema form the sub-domains of research and trigger more detailed research questions.Answers to these questions help understand each of the sub-domains andserve to answer the main questions. The list is shown in Appendix 2.

4.2 Research Design

The project builds on a feasibility study, already performed, and on themethods developed during the pre-study phase. The research methodsinclude literature survey, company case study, and quantitative study. Arich and unique set of data will be collected in the project permitting avariety of analyses and triangulation of results.

The research work in the project will be divided to five work packages(WP). The first WP involves management of the project. The followingthree work packages are the major fact finding exercises of the project.

They are all designed to provide answers to the basic research questionsbut take on differing complementary approaches. The second WPcomprises case studies related to the participating industrial companies.The third WP is about extending the research to cover major internationalcompanies through the process of benchmarking. The fourth WPaddresses issue management in growth companies. The fifth WP involvesintegration of the results of WP2, WP3 and WP4 and the full disseminationof results. The packages are outlined in the following and are described inmore detail in Appendices 3,4,5 and 6. Figure 1 highlights the overallresearch design.


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WP 2

Large company cases

WP 1

Project management

WP 5

Integration

WP 4

Growth firm survey

WP 3

Benchmarking

Figure 2. Design of the MESI research project

4.3 Work Packages (WP)

4.3.1 Work Package 1 Project Management

Project management resources the project and keeps track of the projectschedule and budget. Additionally and importantly it entails liaison withproject partners and benchmarking companies as well as formingcontacts with new international companies.

4.3.2 Work Package 2 Company Case Studies

This work package consists of three new in-depth company case studiesand an extension of the old Nokia case. A new case is formed for SuomenPosti Oyj, SanomaWSOY Oyj and Vaisala Oyj. The cases are designed withtwo goals in mind

They should serve our research in the accumulation ofempirical data in the quest to provide answers to ourresearch questions, and

They should serve the case companies in understanding andimproving their strategic planning and issue processing processes

In the case studies we will work on real strategic themes and issues thathave been or will be processed within our industrial partner corporations.Two types of cases are planned. In the first case type, the emphasis is ona companys strategic planning process and on the way it processes itsstrategic issues. In the second type, the emphasis is on how thedevelopment of a new strategic theme and its related issues should andwill progress.


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In order to answer our research questions, we will collect data onstrategic decision-making with respect to the cases, including issuecharacteristics, planning and decision processes, resource deployment aswell as estimates of the impact and correctness of the decisions. Thecollected data will be analyzed both qualitatively and quantitatively. For

example, we will use network plots of individuals involved in the strategicissue work. These networks will show how each theme is participated andby which individuals, thus giving a handle on nature of issue processingand the workload of key people. The accumulation of issue-based datawill permit quantitative analysis revealing dependencies betweencharacteristics of issues. The prime deliverables of the case analyses willbe reports detailing each case and its findings and the practicalrecommendations for the companies involved. Each case is scheduled tolast six calendar months and will be continuously followed up to the endof the project.

4.3.3 Work Package 3 Benchmarking

In addition to the in-depth company cases benchmarking sessions withworld-class global companies are sought. These sessions will not be as in-depth as the case studies, but will cover the strategic issue managementpractices and considerations in the companies involved, and will thus addbreadth to projects fact finding. Sessions are currently scheduled withthe corporate strategic planning staffs of Royal Dutch/Shell Group and the3M Corporation. Separate reports are produced on each benchmarkingsession.

4.3.4 Work Package 4 Growth Company ConsiderationsThis work package will address the specific nature of strategic issueprocessing in technology-driven growth companies. Intensive case studiesare not warranted in smaller companies due to the limitations of growthfirms resources. An alternative, lighter, approach is thereforeappropriate. First, a survey of the issue processing practices in a largenumber of growth companies is conducted. The survey questionnaire willbe designed based on our research questions. Based on the results of thesurvey and the company cases in WP2 and benchmarking in WP3,methods suitable for growth companies are designed and tested. A reportof considerations and recommendations for issue processing in growthcompanies will then be produced. At the end, feedback from a selectedset of companies is solicited.

The prime deliverable of this WP is a report outlining the considerationsand recommendations updated with feedback from the growthcompanies. This work package is planned to commence in the secondyear of the project and will last 12 months.


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4.3.5 Work Package 5 Integration

This WP will integrate the results from the case studies in WP2, thebenchmarking work from WP3 and the growth company considerations in

WP4. Quantitative studies based on accumulated data will be conducted.Summary report of the case study work will be produced

Results of project will be published in scientific conferences and seminars.Material to be used in university teaching as well for training growth firmswill be developed. The work package will commence in 18 months fromthe beginning of the project and will last six months.

4.4 Project Organization, Resources

The project will be carried out by the Institute of Strategy andInternational Business of Helsinki University of Technology. The persons incharge of the project are Professor Tomi Laamanen and Professor MarkkuMaula. The project will be managed by Dr Matti Keijola. Institute ofStrategy and International Business has extensive experience on similardemanding research projects.

The other project resources will include Master of Science and PhDstudents. Each case will have a dedicated researcher either from theparticipating companies or from HUT. The two PhD level researchersinvolved in the project at Nokia and at SanomaWSOY have already been

nominated. In addition there will be a full-time researcher working on allsub-projects of MESI and will be the resource for addressing the growthcompany considerations. The project will have a Steering Group withmembers from the participating companies and Tekes.

4.5 Project Schedule

The project is scheduled for a period of 24 months. The main emphasisduring the first 12 months will be on cases and benchmarking sessions.After that the focus shifts on the growth company survey, and leveragingthe results of the first part. The last six months represent an integrativephase in the project.


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Research Proposal on Management of Emerging Strategic Issues

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Month from the start of the project

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

WP0 Project Management

Steering Group Meeting X X X X X

WP1 Case studies

Case 1

Case 2

Case 3

Case 4

WP2 Benchmarking

Benchmarking sessions x x x x x

WP3 Growth companies

Survey planning

SurveyReport, draft

Feed-back solicitation

Report , final

WP4 Integration

Case summary report

Course material

Training and consulting material

Summary report

Scientific papers


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5 REFERENCES

Aguilar FJ. 1967. Scanning the Business Environment. McMillan.: New

York, NYAnsoff HI. 1965. Corporate Strategy. McGraw-Hill: New York

Ansoff HI. 1984. Implementing Strategic Management. Prentice-Hall:Englewood Cliffs, NJ

Ansoff HI. 1991. Critique of Henry Mintzberg's 'The design school:Reconsidering the basic premises of strategic management'. StrategicManagement Journal12(6): 449-461

Chakravarthy B, Mller-Stevens G, Lorange P, Lechner C (Eds.). 2003.Strategy Process: Shaping the Contours of the Field. Blackwell Publishing:

OxfordChakravarthy BS, Doz Y. 1992. Strategy Process Research - Focusing onCorporate Self-Renewal. Strategic Management Journal13: 5-14

Cohen MD, March JG, Olsen JP. 1972. A garbage can model oforganizational choice.Administrative Science Quarterly17: 1-25

CSB. 2000. IBM's Deep Dive Strategy Process. Corporate Strategy Board

CSB, 2004. Changes Since CSBs 2000 Profile of IBMS Deep DiveStrategy Process

Cyert RM, March JG. 1963.A behavioral theory of the firm. Prentice Hall:

Englewood Cliffs, CADaft RL, Sormunen J, Parks D. 1988. Chief Executive Scanning,Environmental Characteristics, and Company Performance - an Empirical-Study. Strategic Management Journal9(2): 123-139

Dutton JE. 1986. The Processing of Crisis and Non-Crisis Strategic Issues.Journal of Management Studies23(5): 501-517

Dutton JE. 1993. Interpretations on Automatic - a Different View ofStrategic Issue Diagnosis.Journal of Management Studies30(3): 339-357

Dutton JE, Ashford SJ. 1993. Selling Issues to Top Management.Academy

of Management Review18(3): 397-428Dutton JE, Ashford SJ, Oneill RM, Hayes E, Wierba EE. 1997. Reading thewind: How middle managers assess the context for selling issues to topmanagers. Strategic Management Journal18(5): 407-423

Dutton JE, Duncan RB. 1987a. The Creation of Momentum for Changethrough the Process of Strategic Issue Diagnosis. Strategic ManagementJournal8(3): 279-295


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Dutton JE, Duncan RB. 1987b. The Influence of the Strategic-PlanningProcess on Strategic Change. Strategic Management Journal 8(2): 103-116

Dutton JE, Fahey L, Narayanan VK. 1983. Toward Understanding StrategicIssue Diagnosis. Strategic Management Journal4(4): 307-323

Dutton JE, Jackson SE. 1987c. Categorizing Strategic Issues - Links toOrganizational Action.Academy of Management Review12(1): 76-90

Dutton JE, Ottensmeyer E. 1987d. Strategic Issue Management-Systems -Forms, Functions, and Contexts.Academy of Management Review12(2):355-365

Dutton JE, Webster J. 1988. Patterns of Interest around Issues - the Role ofUncertainty and Feasibility.Academy of Management Journal31(3): 663-675

Garg VK, Walters BA, Priem RL. 2003. Chief executive scanningemphases, environmental dynamism, and manufacturing firmperformance. Strategic Management Journal24(8): 725-744

Goold M, Campbell A, Alexander M. 1994. Corporate-Level Strategy:Creating Value in the Multibusiness Company. John Wiley & Sons, Inc.:New York

Grant RM. 2003. Strategic Planning in a Turbulent Environment: Evidencefrom the Oil Majors. Strategic Management Journal24(6): 491-517

Hambrick DC. 1982. Environmental Scanning and Organizational

Strategy. Strategic Management Journal3(2): 159-174Haspeslagh PC, Jemison DB. 1991. Managing acquisitions - Creating valuethrough corporate renewal. The Free Press: New York

Jackson SE, Dutton JE. 1988. Discerning Threats and Opportunities.Administrative Science Quarterly33(3): 370-387

Kajanto M, Keijola M, Laamanen T, Maula M. 2004. Strategic IssueManagement through Corporate Strategic Agenda. Conference of theStrategic Management Society, Puerto Rico

Kajanto M, Keijola M, Kunnas P, Laamanen T, Maula M. 2005.

Determinants of Strategic Issue Management System Performance: AnEmpirical Analysis. Conference of the Strategic Management Society,Puerto Rico

Mintzberg H. 1990. The design school: Reconsidering the basic premisesof strategic management. Strategic Management Journal11(3): 171-195

Ocasio W. 1997. Towards an attention-based view of the firm. StrategicManagement Journal18: 187-206


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Pettigrew AM. 1992. The Character and Significance of Strategy ProcessResearch. Strategic Management Journal13: 5-16

Prahalad CK, Bettis RA. 1986. The Dominant Logic - a New Linkagebetween Diversity and Performance. Strategic Management Journal7(6):485-501

Simon HA. 1947. Administrative Behavior: A Study of Decision MakingProcesses in Administrative Organizations. Macmillan: Chicago, IL

Tripsas M, Gavetti G. 2000. Capabilities, cognition, and inertia: Evidencefrom digital imaging. Strategic Management Journal21: 1147-1161

Zell D, Glassman AM, Duron S. 2004. Accelerating the Strategy Process:One Industry Giant's Attempt, Academy of Management Annual Meeting:New Orleans


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APPENDIX 1, THE CONCEPTOFTHE STRATEGIC AGENDA

As a synthesis of our case analyses in the feasibility study phase, we havedefined a broader framework for corporate level strategic managementand named it as the corporate strategic agenda. Corporate strategicagenda can be defined as the set of key issues, decisions and programsthat are considered strategically the most important from the corporateperspective. The focus could similarly have been put on a business ordivisional level. Our choice of the corporate level of analysis is, however,consistent with our primary focus on the first phases of the strategic issuemanagement processes. On the business level, more emphasis should beplaced on the following up of strategic issue implementation. Strategicissue management could also be seen to represent an important functionof the corporate parent. As Goold, Campbell, and Alexander (1994) pointout, among the key sources of parenting advantage are the parentsmental maps. They are rules of thumb or mental models that help acorporate parent interpret and synthesize information and that shape theparents perception of the different business improvement opportunities(Goold et al., 1994).

We define the concept of corporate strategic agenda to comprise fiveelements, as shown in Figure 2: (1) Scanning of agenda items, (2) Itemselection, (3) Item structuring, (4) Intelligence support for the strategic

agenda, and (5) Agenda management. The purpose of each of theseelements is to help explicating the thought processes underlying strategicissue management. In particular, the purpose is to provide a frameworkthat would overcome the challenges in strategic issue identification andimplementation discussed earlier.

Scanning for

agenda itemsStructuringItemselection

Intelligence

support

Agenda

management

Internal andexternal infor -

mation sources

Potentiallydisruptive

changes

Organization:responsibilities

and processes

Emergent or

analytical

Selling and

gaining

acceptance

Potential

biases

Number of

items: fixed

or flexible

Itemtype

Underlying

assumptions,

Objectives and

constraints

Priorities

Intelligence

requirements

Organization:

responsibilities

and processes

Prioritymanagement

Update triggersand frequency

Organization:responsibilities

and processes

Figure 2. Elements of corporate strategic agenda


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The scanning for agenda items is aimed at easing the identification ofstrategic issues. It helps decision-makers explicate and pool emergentideas and get them faster to discussions with peer decision-makers. Thiscan be expected to reduce the time lag that it takes for a strategic issue

to take shape. The scanning phase also provides an arena to collectemerging weak signals in a more structured fashion. An organizationalintelligence function can also help identify emerging issues and bringthem to the attention to decision makers in a more concentrated fashion.

The biases resulting from existing organizational cognition, as well asstructural and social realities, cannot be overcome in the item selectionphase. It provides, however, an explicated process for selecting amongthe emergent strategic issues. Issue and project selection systems existcommonly at more advanced stages when the issues and projects havealready feasibility studies supporting them. Advanced item selection

helps alleviate internal issue ecology challenges. The issue structuring inour framework helps explicate and study the underlying assumptions andconstraints of each of the items on a corporate strategic agenda.

Decision-makers are often relatively alone with their ideas when a newstrategic issue emerges as a weak signal. In many cases, there are noother ways to take care of the situation than to wait how things develop,discuss the issue with others, and then eventually at some point starttaking actions on the issue. The purpose of the intelligence supportprovided for strategic agenda items is that intelligence support at anearlier stage helps speed up the analysis of emerging issues and prevents

that the issues are discarded due to time constraints or due to othersimilarly emerging issues.

Finally, the agenda management aspect contributes to an orderly, explicitprocessing of strategic issues and their transition to implementation. Ithelps bridge the gap between strategic issue identification andimplementation by tracking the strategic issue implementation. Inaddition, it addresses explicitly the organizational responsibilities for thestructuring of attention and provides continuous support for items on astrategic agenda. A systematic strategic agenda management processmay also help alleviate the challenges of adversely escalating

commitment.


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APPENDIX 2 LISTOF RESEARCH QUESTIONS

1. Scanning for new agenda items

What is the emphasis in scanning?

What are the types of items are to be scanned for?

What is the organization for the scanning process and itsresponsibilities?

2. Selection of agenda items

Is the process emergent or analytical?

Are there potential biases?

What is the manageable number or size of new items? Is itfixed or flexible?

3. Item structure What types of items can be recognized?

What are the underlying assumptions?

What are their objectives and constraints?4. Item implementation and management

Intelligence requirements and organization?

Item management including1. how are priorities assigned?2. how are issues framed: threat vs. opportunity?3. what is the right forum for an issue?

4. what is the role and significance of the issue driver?5. what is the impact if the driver changes?6. what is the impact if the resources change?7. what should be the role of the senior executive

associated with the case?8. what are the best corporate and business

involvements?9. how are decisions made?

5. Agenda management

How are priorities managed?

What is the update frequency and what are the triggers?

What is the organization (responsibilities and processes)? What is the total number or size of manageable items

How is attention allocated?

How are decisions made?


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APPENDIX 3, WP 2, CASESTUDIES

The company cases are designed with two goals in mind

They should serve our research in the accumulation of empiricaldata in the quest to provide answers to our research questions,and

They should serve the case companies in understanding andimproving their strategic planning and issue processingprocesses

Two types of cases are planned. In the first type, the emphasis is on a

companys strategic planning process and on the way it processes itsstrategic issues. In the second, the emphasis is to consider how thedevelopment of a new strategic theme and its related issues should andwill progress. The company cases are briefly outlined in the following.

Suomen Posti Oyj is the leading messaging and logistics company inFinland and selected markets in the Baltic Rim, with letter, magazine anddirect-mail deliveries including its traditional business operations. Seekinggrowth, particularly in the Information Logistics and logistics businesses,Finland Post Group is developing its business towards integratedinformation and materials flow management. The case for the MESI

project will center on addressing issues around Information Logistics andthe transition of legacy services to the new services.

Nokia is a world leader in mobile communications, driving the growthand sustainability of the broader mobility industry. Nokia connects peopleto each other and the information that matters to them with easy-to-useand innovative products like mobile phones, devices and solutions forimaging, games, media and businesses. Nokia provides equipment,solutions and services for network operators and corporations. The Nokiacase will be an extension of the work already performed regardingstrategic issue management at the corporate level.

SanomaWSOY is Finland's leading media group and the largest mediacompany in the Nordic region. The Group is comprised of five divisionsoperating in versatile fields of media in 20 European countries.SanomaWSOY is also among the top five European magazine publishersand has a strong position, in addition to Finland, in the Netherlands,Belgium, Bulgaria, the Czech Republic, Hungary, Slovakia and Russia.


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The SanomaWSOY case will address the corporate level strategic issuemanagement process.

Vaisala develops, manufactures and markets products and services for

environmental and industrial measurement. Vaisala's markets are global.The goal is to provide basis for better quality of life, environmentalprotection, safety, efficiency and cost savings. The Vaisala case willcenter on issues related to the development of its information servicesbusiness.

Methodology

Each chosen case is different from the others thus enriching the total setof cases. Without going into too much detail in the confidential naturecases we note the following aspects

One case is about refining an already existing scheme for processingstrategic issues

One case is about creating and formalizing a new process for handlingstrategic issues

One case incorporates issues around a strategic theme involvingtransition from the physical legacy world to the new e-world

One case incorporates issues about building a new aspect of

companys business

In order to answer our research questions, we will collect data aboutstrategic decision-making regarding the cases, such as issuecharacteristics, planning and decision processes, resource deployment aswell as estimates of the impact and rightness of the decisions made.

Data will be analyzed both qualitatively and quantitatively. For example,we will plot networks of individuals involved in strategic issue work. Thesenetworks will show how each theme is participated by which individualsthus giving a handle on the workload of key people. Accumulation of

issue-based data will permit quantitative analysis revealing dependenciesbetween characteristics of issues.

Contribution

The case studies will help companies understand and develop theirstrategy processes. They will understand what types of issues demandwhat type of effort and what types of resources. They also learn to


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observe when rapid results can be demanded and expected and whenshould caution and option preservation be exercised when makingdecisions about how issues should be tackled. The case studies serve toaccumulate data about strategic issue processing systems. This will help

create new insights into the strategic management of companies.

Deliverables and dissemination

The prime deliverables of the case analyses are reports detailing eachcase and its findings. A final report summarizing and integrating theresults of the individual cases will be produced in WP5. Separateconference papers about the cases will be planned. Each case isscheduled to last approximately six calendar months and will then becontinuously followed up to the end of the project.

Qualitative results based on the Nokia case have already been reportedat the Strategic Management Society 2004 Conference (Kajanto et al,2004) and quantitative results of the case will be reported at StrategicManagement Society 2005 Conference.


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APPENDIX 4, WP 3, BENCHMARKING

In addition to the in-depth company cases, benchmarking sessions withglobal companies are sought to complement data collection through casestudies. These sessions will not be as in-depth as the case studies, butthey will cover the strategic issue management practices andconsiderations in the companies involved and will thus add breadth toprojects fact finding.

Methodology

Benchmarking sessions primarily involve exchange of informationbetween companies. Each session will therefore have a Finnish company

counterpart and a foreign company counterpart. A typical schedule forthe sessions is

1. The Finnish counterpart presents its strategic planning andstrategic issue management practices and experiences

2. The global counterpart presents its strategic planning and strategicissue management practices and experiences

3. Optionally HUT presents results of its research

4. These presentations are followed by discussions about implications,best practices, and possible future cooperation

Benchmarking sessions are currently scheduled with the corporatestrategic planning staffs of the Royal Dutch/Shell Group and the 3MCorporation. The Finnish counterpart in these sessions will be Nokia. Newsessions involving the other Finnish participating companies will besought.

Contribution

The Finnish counterpart company benefits by having the option to playand compare its views and considerations against the foreigncounterparts views and considerations. The benchmarking sessions willwiden the views of the project and serve to trigger new ideas and insightsin the strategic management practices in leading global companies.


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Working reports are produced about each benchmarking session.Conclusions about the benchmarking sessions will be drawn in the finalreport to be produced in WP5.


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APPENDIX 5, WP 4, GROWTHCOMPANYCONSIDERATIONS

The case study companies can be considered large, rather establishedand having at least some dedicated planning personnel. The lessons fromthese cases might not be applicable in smaller growth companies wherededicated planning personnel are lacking. Growth companies, however,form an important part of the set of all Finnish businesses. This workpackage will specifically address strategic issue processing considerationsin these companies.

Methodology

In order to cover a large set of companies a survey-based approach

complemented with selected feedback solicitation has been chosen forthis work package.

First, a survey of the issue processing practices in a large number ofgrowth companies is conducted. The survey questionnaire will bedesigned based on our research questions. The survey also querieswhether a company is interested to work closer with the project whenfeedback from companies will be requested.

Based on the results of the survey and the company cases in WP2,methods suitable for growth companies will be designed and then

discussed with a selected set of companies (a subset of those that hadindicated interest to work closer with the project).

A report of considerations and recommendations for issue processing ingrowth companies will then be produced. Feedback from a selected set ofcompanies is finally solicited in face-to-face meetings with companyrepresentatives.

Contribution

Growth companies participating in the survey are forced to address the

fact that they have to and they do make strategic decisions about issuesarising over time. This will make them cognizant of the process. Byconsidering the results of the survey and the report to be produced,growth companies, in general, will become better equipped to face andresolve issues as they emerge. They will learn to better allocate theattention of their scarce strategy making resource, their topmanagement, who at the same time most probably also need to attend tomany other issues more operational in nature. By addressing the growth


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company sector, the work package will bring an important extension tothe scope of the total scope of the project. New insights, applicable alsoto larger companies, may be gained.


The prime deliverable of this WP is the report outlining considerations andrecommendations for strategic issue processing in growth companiescomplemented with feedback from the companies. This work package willcommence in the second year of the project and will last for 12 months.


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APPENDIX 6, WP 5, INTEGRATION

This WP will integrate the main results of the project by analyzing dataaccumulated in the case studies in WP2, the benchmarking work fromWP3, and the growth company considerations in WP4 and by integratingthe results of the work packages.

Methodology

The cases, the benchmarking sessions, and the growth company studywill all yield significant amounts of data that facilitates both quantitativeand qualitative studies to answer our basic research questions.

Contribution

The results of the final work package of this research project willcontribute to the strategic decision making capabilities of both large andgrowing Finnish companies operating in global markets by introducingprocesses and methods which will direct the companies to optimize theallocation of their scarce strategic decision making resources and byadvising them to address the variety of issues in the most appropriateway.

The results of the project, being based on rare empirical data, will

contribute to the theories of strategic issue management through newinsights.


A summary report of the case studies will be produced at the end of thelast case study. The final report summarizes the results of work packagesin the project. In addition it presents the results of integration work.Results of project will be published in scientific conferences and seminars.Material to be used in university teaching, as well as in training andconsulting technology-based growth companies will be developed. Thiswork package will commence in full force 18 months from the beginning

of the project and will last six months.

MESI Research Plan 20070116 for MESI Report

Documents

Transcript of MESI Research Plan 20070116 for MESI Report