Student Self-administered case study The internal environment ? THE STARTING POINT FOR STRATEGY FORMULATION Case summary: Case duration (Min): Strategic Management (SM) Organizational Behaviour (OB) The internal environment Organization culture 45-60 Worldwide Business success can be realized by focussing on the organization, rather than the external business environment. Aside from a need to be aware of the external environment, the manager must also know the internal business environment –managers need to understand the strengths ad weaknesses of their organizations; they need to leverage resources.
In order to do this they must know what they are and how they contribute to value creation and goal attainment. There are two film clips associated with this case; the second focuses on corporate culture and can be used to supplement discussions. Learning objectives: Understand the significance of the internal environment for strategy. Distinguish between the positioning and the resource? based perspectives. Case problem: Why is it important for the strategic decision? makers to understand thoroughly their organisation’s resources, capabilities and core competences?
Case media Stanford’s Entrepreneurship Corner – Case study © Dr Phil Kelly 2009 Company Amyris Biotechnologies Amyris Biotechnologies is translating the promise of synthetic biology into solutions for real? world problems. It is a renewable products company, devoted to creating a more sustainable world. Page 1 First, if you are taking a taught management course then consult with your tutor and ensure that the case has not been scheduled into a teaching class or tutorial. If it has not: 1. Play/ read the media associated with the case.
You may need to access the Internet and enter a URL to locate any video clips. 2. Attempt the Case study questions. Consider attempting the case study as a group exercise; you could form a study group with fellow students. 3. Check the suggested answers – remember these are suggestions only and there are often many possible answers. Discuss questions and answers with other students. 4. If you feel your answer(s) were weak then consider reading the relevant suggested readings again (also see the case study suggested references). Title/ Media type Planning for the Market:
URL/ Media description http://ecorner. stanford. edu/authorMaterialInfo. html? mid=2025 Start? up Amyris Biotechnologies didn’t quite realize the potential of its assets or its market possibilities, says company CEO John Melo. The company made a choice. Rather than exploring the limits of the technology simply for technology’s sake, they thought instead about exploring the needs of the marketplace. They first looked at the attributes of existing energy sources, and then investigated molecular alternatives that can mesh with current capabilities.
Film Defining Company Culture: http://ecorner. stanford. edu/authorMaterialInfo. html? mid=52 Jeff Hawkins believes you have to be conscious and methodological about your company culture. The culture starts at the top and permeates to the bottom. The culture at palm is a product culture. High integrity is not just internal, but integrity with vendors, suppliers and customers. Hawkins points out that a lot of companies keep secrets but the transparency has been very good for Palm .
A good, solid culture can help a company go through hard times. Film NOTES: Page 2 Case media Stanford’s Entrepreneurship Corner – Case study © Dr Phil Kelly 2009 Case study questions… Action Pre/During/After class 1 2 3 THE INTERNAL ENVIRONMENT: What do we mean by the internal environment and why might it be analysed when creating strategy? During During ANALYSIS OF THE INTERNAL ENVIRONMENT: Discuss the role of analysis in strategy formulation and list several favoured ways to analyse the internal environment.
THE STARTING POINT FOR STRATEGY FORMULATION: With reference to the film clip and your wider reading/ experience, highlight and describe the two contrasting views about the starting point for strategy formulation. Evaluate whether corporate success depends upon positioning an organisation in a favourable market environment or on unique resources. Should strategies be developed by looking outward to the external business environment or should they be developed by looking inward to the organizations resources? During 4 5 ORGANISATIONAL RESOURCES
In the film clip, CEO John Melo discusses capabilities and what the organization can or could do. List and discuss resources and distinguish between resources and the capabilities of the organisation During CAPABILITIES: IDENTIFICATION AND EVALUATION Discuss how organizations might identify and evaluate key resources and capabilities During Page 3 Case media Stanford’s Entrepreneurship Corner – Case study © Dr Phil Kelly 2009 Answers… INTERNAL ENVIRONMENT Relates to the culture and climate of an organisation and to the prevailing atmosphere surrounding the organisation.
CAPABILITIES A company’s distinctive competencies to do something well and efficiently DYNAMIC CAPABILITIES the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments ORGANISATIONAL CLIMATE Relating to the prevailing atmosphere surrounding the organisation, to the level of morale, and to the strength of feelings or belonging, care and goodwill among members. Organisational climate is based on the perceptions of members towards the organisation.
ORGANISATIONAL STRUCTURE Structure is the pattern of relationships among positions in the organisation and among members of the organisation. It defines tasks and responsibilities, work roles and relationships and channels of communication. ORGANISATIONAL SUB? SYSTEMS The interrelated sub? systems of an organisation: tasks, technology, structure, people and management. These sub? systems need to be co? ordinated to ensure that the activities of an organisation are directed towards the achievement of aims and objectives. CONTEXTUAL RELATIVISM Different actions are judged according to appropriate context
Question/ Answer 1 THE INTERNAL ENVIRONMENT: What do we mean by the internal environment and why might it be analysed when creating strategy? Internal environment – relates to the culture and climate of an organisation and to the prevailing atmosphere surrounding the organisation. The internal environment includes organisational goals and values, resources and capabilities, structure and systems. Strategy forms a link between the organisation and its external environment. Organisations must determine how they will deploy resources within their own environment in order to satisfy longterm goals.