Creating Corporate Advantage

Topics: Strategic management, Corporation, Management Pages: 3 (829 words) Published: November 15, 2009
How can you tell if your company is really more than the sum of its parts? To create viable corporate strategy you can´t act independently within the different internal factors of the company company. Even if you work well at the company core competencies, or even if you do a great job restructuring its corporate portfolios or building learning organizations you might not succeed. In that case you would be only focusing on individual elements of corporate strategy: resources, businesses, or organization rather than turning those elements into an integrated whole. That insight is the essence of corporate advantage – the way a company creates value through the configuration and coordination of its multibusiness activities. Ultimately, it is what differentiates truly great corporate strategies from the merely adequate. Great corporate strategies come in first instance from strength in each side of the triangle: high-quality rather than pedestrian resources, strong market positions in attractive industries and an efficient administrative organization. But true corporate advantage requires a tight fit at each angle as well. When company´s resources are critical to the success of its businesses, the result is competitive advantage. When the organization is configured to leverage those resources into the businesses, synergy can be captured and coordination achieved. Finally, fit between a company´s measurement and reward systems and its businesses produces strategic control. There are many managers that think they are getting the alignment of their corporate strategies right, when in fact they are not. They mistakenly enter businesses based on similarity in products rather than similarities of the resources that contribute to competitive advantage in each business. Moreover, instead of tailoring organizational structures and systems to the needs of a particular strategy, they create plain vanilla corporate offices and infrastructures as if there were on best practice...
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