Strategic Choice

Miles & Snow Framework

Varun Joshi (10FN-117) Vidu Rastogi (10HR-044) Srikanth Konduri (10FN-109) Saurabh Thadani (10FN-102) Vishal Aggarwal (10DM-176) Tarun KSG (10DM-162)

Agenda
Item 1

Miles & Snow Strategic Human Resource Systems

Evolution of the framework

Item 2

Prospector Defender Analyzer Reactor Strategic Orientation & Application

Critical analysis

Item 3

Item 4

Item 5

Item 6

Raymond E. Miles

Professor of Business administration and dean of the School of Business Administration at the University of California, Berkeley His early work focused on the effects of alternative theories of management on relationships and performance within the superior/subordinate work team

Charles C. Snow

Associate Professor of Organizational Behavior in the College of Business Administration at The Pennsylvania State University He has written many articles on strategic management and organization design. Written the book Organizational Structure, Strategy and Process with Raymond E. Miles (McGraw-Hill, 1978)

Strive for excellence : US v/s Japan

During 1970s, many US corporations started giving renewed attention & added status to human resource functions and specialists

Japanese challenge prompted US managers to focus on HRM as a means of restoring their competitive position in challenging global market place

As US moved further into the complex & new world of a high-technology, service based economy, farsighted managers recognized crucial role of HRM

Started to learn language and techniques of strategic planning, assumed a proactive chance in strategic thinking

Historical evolution of Business Strategies

Investigated competitive strategies of several companies in widely different industries Encountered impressive & dramatic competitive tactics & strategies

Convinced that these approaches revolve around few fundamental business strategies

Observed 3 basic types of strategic behavioral characteristics: Defender, Prospector & Analyzer

Adaptive Cycle
Based on Study of 84 firms in : 1. College text book publishing 2. Electronics 3. Food processing 4. Hospitals

The Entrepreneurial Problem (Product/Market domain)

The Administrative Problem (Leading/Lagging)

The Engineering Problem (Technology for production)

Snows take on adaptive cycle

PROSPECTOR

DEFENDER

ANALYSER

REACTOR

Prospector
Creators of change & uncertainty to which their competitors must respond Regularly experiment with potential responses to emerging environmental trends

Search for product & market opportunities

Microsoft

Concern for market & product innovation so, usually not completely efficient

Fedex
3M

Adobe Systems

Adobe Cues from CEO

$3.4bn acquisition of Macromedia, a multimedia software firm

Diversification & growth by adding Flash to its product line

Meeting a broader set of customer needs & expanding its current market

They valued first mover advantage to gain premium pricing opportunity

Confidence to coordinate challenges among cross functional teams

PROSPECTOR

DEFENDER

ANALYSER

REACTOR

Defender
Ignore developments outside of this domain Penetrate deeper into current markets

Aggressively maintain prominence within its chosen market segment

Philips

Paramount pictures
Dell

Normally, growth occurs cautiously and incrementally due to seldom technology adjustments

Ryanair Airlines

Ryanair Cues from Conversation

It keeps costs at rock bottom, lower than anyone else in Europe companys mantra is cheap tickets and not customer care Staff costs are kept low too. Offers no business class, maximizes seating space, doesnt offer travel agent commissions Instead of giving away snacks or food, Ryanair sells it with a strategy: Pile em high and sell em cheap Turns around an aircraft in 25 minutes compared to 45 or so required by traditional carriers Although expanding by adding new routes, primarily concerned with stability rather than risk taking & seeking growth

PROSPECTOR

DEFENDER

ANALYSER

REACTOR

Analyzer
Successful imitation through extensive market surveillance Growth normally occurs through market penetration

Mixture of products & markets, some stable, others changing

Sony

Growth may also occur through product & market development

P&G
Starbucks

Texas Instruments

Texas Instruments Cues from Operations

Views itself as a leader in product design & development-also competitive as the most efficient mass producer Mature products human resources play maintenance and training role Innovative products human resources play a more developmental role Their development is closely planned and the process of allocating resources to such developments is closely monitored Prides itself on its ability to shift organization structures

PROSPECTOR

DEFENDER

ANALYSER

REACTOR

Reactor
Technology, Structure and Process are not linked to strategy appropriately Management adheres to a Strategy-Structure relationship that is not relevant to the environment Except in highly regulated industries, they perform less well than the other three types

Management fails to articulate a viable organizational strategy

Kodak

Kellogg
Xerox

Atari Inc.

Atari Inc. Cues from E.Ts Game Over

In Lieu of increasing their sales, accepted developing E.T in just 6 weeks, based on the huge success of the movie E.T Result one of the worst video games ever released-dull design, boring & monotonous game-play & chaotic product development Had no prior experience of making an action game out of a movie. Hence was a dumb idea Had a articulated strategy to develop the game but technology, structure & process not linked to it appropriately Unable to react efficiently to the changing market needs Nintendo ultimately took over

Strategic Orientation & Application - 1

Entrepreneurial Problem

Organization

Product-Market Domain Broad, continuously expanding

Success Posture Active initiation of change through M&A

Sureveillance Environment oriented, aggressive search Strong organizational monitoring

Growth Enhancing product market development, diversification Cautious penetration, advances in productivity Assertive penetration, careful product market development Hasty Change

Adobe Systems

Ryanair Airlines

Narrow, carefully focused

Prominence in Low cost airlines

Texas Instruments

Segmented, carefully adjusted

Calculated followers of change

Competitive oriented and thorough

Atari Inc.

Uneven, transient

Opportunistic thrust, coping posture

Sporadic, issue dominated

Strategic Orientation & Application - 2

Engineering Problem

Organization
Technological Goal Technological Breadth Multiple technologies, pushing the edge Focal, core technology, basic expertise

Technological Depth Technical personal skills,diversity Standardisation, maintenance programs

Adobe Systems Ryanair Airlines Texas Instruments Atari Inc.

Flexibility and innovation

Cost efficiencies

Technological Synergism

Inter-related technologies,at the edge

Incrementalism, synergism

Product development, completion

Shifting technological applications,fluidity

Ability to experiment & rig solutions

Strategic Orientation & Application - 3

Administrative Problem

Organization

Dominant Coalition

Planning Problem & opportunity finding Inside/Out.. Control dominated

Structure

Control

Adobe Systems Ryanair Airlines

Marketing & R&D

Finance & Production

Product/ market oriented

Functionality, line authority

Sales Volumes, performance Centralised & formal/financially anchored

Texas Instruments

Comprehensive Planning Staffs with incremental changes Trouble Shooters Crisis oriented, disjointed

Staff dominated/ matrix oriented

Multiple method, careful risk calculation

Avoid problems/remain solvent

Atari Inc.

Tight formal/loose operating

Critics & Convergence

Assesses relationships between organizations & their environments Emphasized the great influence of topmanagement in the adaptation process Led to Porters strategic positioning framework

Optimizing Analyzer behavior not explained in detail

Should not be applied to conglomerates that span multiple industries Defender & Prospector were similar to Burns & Stalkers Organic & Mechanic forms

New Product Development

Ansoff Sheth and Morrison Study

Miles and Snow Porter Typology

Bibliography

www.provenmodels.com www.kulzick.com/milesot.htm www.globalnpsolutions.com Organization Theory & Design

Strategic Choice Typology Miles & Snow Organizational Types A Review of Innovation Strategy Types Richard L. Draft

Designing Strategic Human Resource Systems by

Miles & Snow