Strategic planning at Canon with a cooperative corporate style (part 5)

For all practical purposes, core competencies seem to be the same concept as critical capabilities and resources that all advocate the building of competitive advantage based on “something” internal to the firm. Strategic management is concerned with the overall direction of the firm and with those issues that require a substantial portion of the organization’s resources to deal with and play themselves out over a long period. Strategic management is also about ensuring the success and survival of the organization by adapting the organization to changes in its environment and making sure that the organization is competitive. Therefore, it is possible to say that strategy is the link between the organization and its environment and that the task of strategic management is to determine how the organization should deploy its resources in the environment and adapt the organization to satisfy the long-term objectives of the firm.

It is important to note that strategic management deals with several time spans. The organization needs to be more than just competitive today. The competition for industry leadership is just as crucial to firms as is the competition for developing the right competencies in the right time. Thus, strategic management is also about integrating time horizons and activities related to all three kinds of competition. This often means finding those issues that should be kept invariant for the time being and adjusting other activities and issues accordingly. For instance, a company could choose to maintain its current customer base and then develop new products and competencies to account for changes in customer demands. Or a company could choose to stick to its current product portfolio and find new markets and customers for that portfolio.

As opposed to strategic management, operational management is about the short-term operation of the activities in the organization within the context of strategic management. In operational management, strategic decisions are executed and short-term results created. But this happens within the confinements of the current strategy of the company. This also implies that strategic management is about innovation for firms. Innovation, in short, breaks with the assumptions of how things are currently done and, hence, always points toward the reformulation of the strategies of a firm. Therefore, strategic management is also about innovation. In summary, the role of strategic management is:

• To guide the organization in the long term.

• To provide context for the operational management and daily activities of the firm.

• To balance the three forms of competition by choosing what is to be kept invariant.

• To secure innovation in the activities, markets, products, or competencies of the firm (Mintzberg, 2005).

In general, the new competitive situation has important ramifications on how firms operate and are managed, as the many different fads on management theory all offered with a rationalization in competition show (Mintzberg, 2005). In the new competitive situation as shown by the Canon’s case, there seems to be near universal agreement among theorists that the focus on product-market competition no longer suffices (Printz, 2003). Product-market competition needs to be supplemented with other forms of competition with different time horizons and characteristics in order to cope with the hypercompetitive dynamics of the new competitive landscape.

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