A Brief History Of Strategic

Thought
Corporate Reputation and
Competitiveness
Gary Davies: Session 1

Course Aims and Outcomes

Course Aims
For students to understand the role of
corporate reputation as a strategic
framework.
Learning Outcomes
Students will understand how to define and
measure the reputation of an organisation,
how to manage a corporate reputation and
what linkages there are between reputation
and company performance

Lecture Aims
To review the development of Strategic
Thinking and to locate Reputation within
this
To make the case for Reputation as a
Strategic Framework

What is Strategy?
Strategy is about matching the
competencies of the organization to its
environment.
A Strategy describes how an organization
aims to meet its objectives.
A successful Strategy is one that achieves
an above average profitability in its sector.

Early Tools
Anecdotal comment (war stories) from
captains of industry
Simple frameworks: SWOT, PEST
Early proscriptive models, eg gap analysis

Gap Analysis
Goal

The Planning
Gap
Forecast

Time

The Two Planning Flows

VISION

OBJECTIVE

STRATEGY

GOAL

TACTICS

BUDGET

STRATEGIC

FINANCIAL

MODEL

The Five Forces Model

NEW
ENTRANTS

SUPPLIERS

RIVALRY

SUBSTITUTES

CUSTOMERS

CONSUMERS

Adapted from Porter 1988

Generic Strategies
The idea that strategic frameworks and
options can be defined that fit all
companies/organisations in all
circumstances
Porters 3 generic strategies: Cost
leadership, Focus, Differentiation

The PIMS Paradigm

Market Structure
Market Differentiation
Market Growth Rate
Purchase Quantity

Competitive Position

Strategy and
Tactics

Performance

Relative perceived quality

Relative market share
Relative capital intensity
Relative cost

Adapted from Buzzel & Gale (1987)

The New Economy

Growing emphasis on the service sector and
manufacturers adding value by adding
services e.g. IBM selling solutions
Need to define new models to guide the
management of service business

The Serqual Gaps Model

Expected Service

CUSTOMER
Perceived Service

Service Delivery

Service Quality
Specification

External
Communications to
Customers

PROVIDER
Management Perceptions
of Customer Expectations

Dimensions of Service Quality

Access (can the customer obtain the service easily)
Credibility (can you trust the company?)
Knowledge (does the supplier understand the
customers needs?)
Reliability (is the service dependable and
consistent?)
Security (is the service free from risk?)
Competence (how knowledgeable and skilled are
staff?)

Dimensions of Service Quality

Communication (is the service well
explained?)
Courtesy ( are staff considerate and polite)
Responsiveness (are staff quick to
respond?)
Tangibles associated with the service
(buildings, uniforms).

The Service Profit Chain

Employee
Retention

Internal
Service
Quality

Employee
Satisfaction

External
Service
Value
Employee
Productivity

Revenue
Growth

Customer
Satisfaction

Customer
Loyalty

Profitability

Source: Adapted from Heskett et al (1994)

People
Management

Leadership

Policy &
Strategy

Resources

Enablers

People
Satisfaction

Processes

Customer
Satisfaction

Impact on
Society

Results

The Business Excellence Model

Business
Results

Concern about Strategic Models

Can you plan a modern, complex company
from the top even using a strategic planning
team as advisors?
Why do strategic models conflict (PIMS
and stuck in the middle)?
Should strategy start from the market place
not from the strategy team? Isnt it time we
distinguished between strategic analysis and
strategy itself?

Emergent Strategy
Henry Mintzbergs thinking that few
strategies come from the top and that most
emerge changes our view of strategising.
The role of senior manager changes from
deciding what to do and finding someone
else to do it to coach, filter, enabler.

Top down v Bottom up?

The Customer
Management

Staff

Staff

Management

The Customer

MARKET-FOCUSSED
COMPANIES

Understanding the Customer

Direct customer contact at many levels
Widely disseminated and understood research on
who the core customer is and on the market structure,
e.g. on market segmentation
Responsiveness of the organisation to customer needs
Regularly receive and act upon customer satisfaction
surveys
Responsive to customer complaints and suggestions
Track key customer data on company image

MARKET-FOCUSSED
COMPANIES
Provision of real value for money
Monitor aspects of quality relevant to the marketplace
Conduct comparative surveys of competitive prices
and services
Reward inside the organisation based on performance
with customers
Source: Corporate Strategy, Richard Lynch, Pitman 1997, p.198

CUSTOMER FOCUS
Customer focus goes beyond market focus. The
company is managed totally from the customers
point of view. Key features of customer focused
companies are:
The business is led by someone who is a fanatic
about the customer and able to model the desired
behaviours
Customer facing employees are empowered to react
to what the customer wants.

CUSTOMER FOCUS [cont ]

Employees have a stake in the business (usually

share or other form of ownership)
Employees feel trusted to run the business.

Customers are regularly asked for ideas as to how

the business should be run.
Achieving a customer focus is a cultural issue (not
an organisational issue). Changing to a customer
focus is neither easy nor comfortable.

Mission and Vision

PURPOSE
( Why the Company Exists)

STRATEGY

COMPANY VALUES

(The commercial rationale)

(What senior management believe in)

STANDARDS and BEHAVIOUR

(Policies and behaviour patterns that guide how the
company operates)

The Ashridge model from Campbell &Tawaday (1990)

Analysis and Implementation

Model One: Two discrete stages
Analysis
Implementation

Analysis

Time
Implementation

Model Two: Two overlapping stages

A New Approach?
Should meet the basics of strategy: link to
profit, clear direction etc
Should be generic (applicable to any
organisation)
Should reflect the trend towards service
business
Should be bottom up/emergent in focus
Should be implementable

Aims and Objectives

To present the case for Reputation as a
paradigm for managing the strategic
direction of an organisation
To explore how reputation management has
emerged from PR and Communications
To demonstrate how Reputation can meet
the criteria for being a strategic tool

What is Strategy?
Strategy is about matching the
competencies of the organization to its
environment.
A Strategy describes how an organization
aims to meet its objectives.
A successful Strategy is one that achieves
an above average profitability in its sector.

What Is Reputation?
The net result of the interaction of all the
experiences, impressions, beliefs, feelings
and knowledge that people have about an
organisation

Other External
Stakeholders: Suppliers,
Investors

Recruitment

Satisfaction

Employee
View

Reputation

Customer

Satisfaction

View

Retention

Loyalty

Identity

Image
Revenue

The Corporate Reputation

Chain

Agreeableness
Enterprise
Competence
Corporate
Personality

Chic
Ruthlessness
Machismo
Informality

The 7 Dimensions of Corporate Personality

Summary
Reputation can be considered as a useful
strategic framework
It is particularly useful for service
companies
It can be used to direct the strategy for no
for profit as well as for profit seeking
organisations