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Chapter 5 organization and competitive advantage
Reflection: strategy shall contain a set of objective, a statement of scope, a clearly stated competitive advantage and logic that explains how the internal context of the firm will enable it to achieve its objectives given its external context. Once the firm’s managers have identified what specific coordination and incentive issues are implicit in the strategy they are pursuing, they can build an appropriate architecture, routines and culture.(ARC) alignment between strategy and organization is crucial to meeting the strategic objectives. Because organization and strategy are interdependent, we need, and in next session will develop a framework to investigate the relationship between organization and strategy. As the firm seeks to deepen its current competitive advantage or build new competitive advantage, the firm has to change the way it deploys its resources. Chapter 5 will discuss two different approaches to organization design that enable a firm to meet this challenge. One design is particularly suitable for a firm intent on creating the continual and incremental change necessary to maintain its existing competitive advantage. Firms with this design and intent are called exploiters because they are focused in successfully exploiting the competitive advantage that they already have. The second design type is better suited to a firm that is attempting to create a new competitive advantage either because the firm wants to change its strategic scope or because it needs to exploit new technologies. Firms organized to generate a stream of advantage capabilities or positions are call explorer firms.
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