How managers' everyday decisions create or destroy your company's strategy

Citation

Bower, J.L. (2007), "How managers' everyday decisions create or destroy your company's strategy", Strategic Direction, Vol. 23 No. 8. https://doi.org/10.1108/sd.2007.05623had.008

How managers' everyday decisions create or destroy your company's strategy

How managers’ everyday decisions create or destroy your company’s strategy

Bower J.L., Gilbert C.G. Harvard Business Review, February, 2007, Vol. 85 No. 2, Start page: 72, No. of pages: 7

Purpose – To consider how strategy gets made and implemented in practice. Design/methodology/approach – Argues that in practice, strategy is crafted, step-by-step, as managers at all levels of the company commit resources. Tell stories to illustrate this contention, suggesting that senior management should focus less attention on the company’s formal strategy and more on the processes by which it allocates resources. Discusses the impact of organizational structure and decision-making practices, pointing out that knowledge is dispersed, that roles determine perspectives and that processes are iterative and span multiple levels. Considers the influence exerted by general managers, operational managers, customers and capital markets on the practice of corporate strategy. Identifies six ways that senior managers can direct the strategy of the firm by better understanding the resource allocation process. Observes that the implication of this insight is that it is not possible to rely on a system to manage the resource allocation process. Adds that planning and capital budgeting procedures cannot substitute for the considered judgements of the best leaders in the company as to how to allocate resources. Recommends that corporate senior management should therefore selectively engage in the debates that mark inflection points in this process. Originality/value – Concludes that the key leadership challenge in driving strategy is to give coherent direction to how resources are allocated, so aligning bottom-up processes with top-down objectives.

Keywords: Alignment, Corporate strategy, Decision making, Resource allocation