Summary Strategy Processes and Decisions

Table of Contents

Session 1 Strategic thinking 4 Cognitive activities 4 [pic] 4 Limitations in cognitive abilities 5 Cognitive maps 5 Paradox of logical and creative thinking 6 Rational and generative reasoning perspectives 6 Article 1: “the concept of corporate strategy” 8 Article 2: “The mind of the strategist” 8 Article 4: “decision –making, it’s not what you think” 8

Lecture 2 – Organizational Purpose (read main parts of chapter 11 as well) 9
General Overview 9
The functions of mission and the link between mission and vision 10
Stakeholder versus shareholder view 11
CSR 11
Article: How companies define their mission 13 Tips to the exam (Fred’s word): 14

Lecture 3 – Values and decision- making 16 Virtue ethics – corporate core values 16 Deontological ethics/duty – rule-based management 17 Teleological (consequential) – utility theories, management by objectives, MCDM, balanced scorecard, stakeholder theory 17 Stakeholder theory 18 Shareholder theory 18 Immediate and expected emotions 18
Generic value system 19 Virtue values – core values - core values of the firm 19 Duty values - standards and procedures – protected values 19 Consequential values - stakeholder values – created values 19
Article: Structuring organizational value statements 21

Lecture 4 – Rationality 22 Four dimensions of rationality 22 Von Neumann-Morgenstern's axioms and utility 23
The expected utility theorem 23 An example of a utility function 23
Measuring a utility function 24
Terminology 24
The shape of the utility function 24
Insurance versus betting 24
Multi criteria decision analysis 24 Model structure 25 Goal hierarchy 25
Decision criteria 25
Willingness to pay principles 26

Lecture 5 – strategy development processes in organizations 27 Strategy formation 27
Strategy formation activities 27
Strategy formation model explained 28 Application of the paradox: In the formal approach