Strategy formulation: Focusing on core competencies and processes

Abstract

The linkage between the external environment, strategy process, organizational structure and performance has been changing over time. To begin with, the relationship was considered unidirectional, i.e. environment deciding the strategy which in turn influenced the structure leading to superior performance. The strategy process was seen as hierarchical and function oriented. This view of linkage has changed considerably in recent times. The concepts of core competencies/capabilities transformed strategic thinking. More recently, business process re‐engineering (BPR), seen by many as the means of transforming organizations, is radically altering organizational structures. These developments call for a reappraisal of the traditional views on strategy‐structure linkages and the process of strategy formulation. This paper attempts to identify some of the important issues in this debate and provide a framework for developing a more robust environment‐strategy‐structure‐performance linkage which reflects the current trends.

Revisiting BPR: a holistic review of practice and development

“…They further describe five migrating forms for business process and show how these processes change over time. Bhattacharya and Gibbons (1996) propose a framework of strategy formulation for BPR which focuses on core competencies and processes and defines a link between strategy and structure. They define a strategy as``a specific course of action designed to meet the business objectives'' (p. 48).…”

A hierarchical model of business competence

“…However, an alternative view is found in the literature which uses the word "competence" in yet another sense. As Bhattacharya and Gibbons (1996) have pointed out the approach taken by both Prahalad and Hamel (1990) and Stalk et al (1992) suggests that competences are a part of the organization structure and should influence strategy making. This is more a capability type of competence, similar to our use of the word, and is generically one of distinctiveness: capabilities possessed by a firm which it believes give it competitive advantage.…”