4CR Part C
4CR C1.4 - 2nd January 2007
The value, responsiveness and responsibility dimensions of strategic management
By Dr P Katsoulakos - INLECOM Ltd UK
Prof Y. Katsoulakos - Athens University of Economics and Business
The 4CR framework has been designed to integrate the various strands of corporate responsibility and to support stakeholder oriented strategic management and the staged development of strategic capabilities enabling companies to reach optimised performance.
This paper constitutes Part C1 of the 4CR framework. It provides an analysis of the main strategic management theories with reference to value, responsiveness and responsibility factors.
The 4CR strategic framework is being developed by Athens University of Economics and Business in collaboration with K-NET SA and INLECOM Ltd utilising their initial research work in the CSRQuest project.
Table of contents
1. STRATEGIC MANAGEMENT THEORY ROOTS4
2. EVOLUTION OF STRATEGIC MANAGEMENT THEORY5
3 REVIEW OF STRATEGIC MANAGEMENT THEORIES7
3.1 Industry organisation theories and environment based approaches7 Background7
Industry change trajectories10
3.2 Resource based View10
Core competencies and distinctive capabilities11
3.3 Business networking13
Types of business networks14
Business networking principles14
Generic networking strategies15
Objectives and value alignment16
3.4 The knowledge view of the organisation16
Change support knowledge and business intelligence19
The responsibility dimension of knowledge management19
3.5 The Corporate responsibility perspective20
A multidimensional view of corporate responsibility20
CSR and corporate sustainability drivers21
Goals and principles for responsible corporate behaviour21
Strategic positioning incorporating responsibility options22 3.6 Stakeholder approaches to strategic management23
Instrumental stakeholder approaches24
Intrinsic stakeholder approaches25
Quality of stakeholder relations and Social capital26
4 THE 4CR STRATEGIC MANAGEMENT CLASSIFICATION27
MINTZBERG ET AL.’S TEN STRATEGY SCHOOLS, EXEMPLARS, AND WRITTEN WORKS28
This paper presents an analysis of strategic management theories against Value, Responsiveness and Responsibility criteria. The objective is to establish an integrative view of strategic management incorporating corporate responsibility issues.
In the first part of the paper a cursory review of the evolution of strategic management theories indicates that the key strategic issues for business managers are value, responsiveness and responsibility. Strategic management theories are therefore analysed with respect to value, responsiveness and responsibility criteria and the output is summarised in the 4CR strategic management classification.
The main theories examined are:
a.Industrial organisation / environmental approaches;
b.Resource Based View (RBV) and related theories on core competencies and dynamic capabilities; c.Business networking;
d.Knowledge view of the firm;
e.Corporate responsibility and sustainability
f.Stakeholder oriented approaches.
1. Strategic management theory roots
The primary objective of every company is to consistently make profits in excess of its cost of capital (economic rent) by outperforming its rivals in specific markets. For this, companies seek to establish a competitive advantage and then maintain it for as long as possible. Strategic management theory explores how firms create and sustain competitive advantage which is regarded as the purpose of the firm on the assumption...