1. Doaa Al Thalathini Spotlight on Strategic Management

2. The field of strategic management has advanced substantially in both the theoretical domain and empirical research over the last 25 years. While the roots of the field can perhaps be traced back as early as 320 BC to the work of Sun Tsu, the evolution of the field in the last few decades has been dramatic. Recent work traced the intellectual structure of the field over the period 19802000 (Ramos-Rodriguez & Ruiz-Navarro, 2004). Some of the most cited works represent particular perspectives such as industrial organization economics, corporate strategy- product diversification (Rumelt, 1974), transaction costeconomics (Williamson, 1975), evolutionary economics (Nelson & Winter, 1982), resource dependence (Pfeffer & Salancik, 1978), and the behavioral theory of the firm (Cyert & March, 1963. 3. Agency theory and transaction cost economics have played prominent roles in building our understanding of executive and firm behavior, industrial organization economics and the resource-based view of the firm (RBV) have dominated much of the research and thinking in the field over the past 25 years. During the 1990s and since, rich streams of research emerged in such areas as competitive strategy, corporate governance ,international strategy, strategic leadership and dynamic capabilities. Emerging areas of strategic management research include strategic entrepreneurship ,strategy process and network strategies. 4. Much research in the strategic management field has focused on why some firms outperform others. One explanation is that market imperfections allow this; thus, prior research has focused on the source of these imperfections and how firms take advantage of them. The RBV has been used to help explain why some firms outperform others. 5. Resources and Resource Management International Strategy Innovation Strategic Leadership and Processes Corporate Governance & Strategic Entrepreneurship 6. The first process is structuring the resource portfolio, which requires that firms engage in the acquisition and development of resources and, when necessary, delete less valuable resources, as well. The first process is structuring the resource portfolio, which requires that firms engage in the acquisition and development of resources and, when necessary, delete less valuable resources, as well. To create capabilities, managers can engage one or more processes, such as stabilizing, enriching, and pioneering. 7. If firms have a competitive advantage and operate in a stable environment, they may engage in a stabilizing process whereby existing capabilities are incrementally improved. Enrichment, on the other hand, adds substantial value to existing capabilities, often by bundling new resources with existing ones. Pioneering involves the creation of new capabilities by recombining existing resources or using substantial amounts of resources added to the portfolio. In dynamic environments, enriching and pioneering bundling processes are increasingly necessary. 8. The final primary process in the effective management of resources in the organization involves leveraging those capabilities to create a competitive advantage. Sirmon et al. argue that leveraging involves mobilizing the capabilities, coordinating them to create configurations, and then deploying them to exploit opportunities; that is, strategies are designed and executed to exploit market opportunities. I anticipate a considerable amount of research on the management of resources to exploit market opportunities will be conducted in the next few years. 9. An important area of research in strategic management. Focuses on what is required for success in international markets. Almost all large established US firms operate in international markets. Approximately 50% of US SMEs also have sales outside the domestic market. Along with the increasing number of multinational enterprises, the interconnectedness of cross-border, regional, and even global markets places significant importance on the topic of international strategy. 10. An area of ongoing research in under international strategic. A review of this research highlights the importance of strategic alliance activity and the current emphasis on learning how to manage the multiple alliances in which many firms engage. 11. Has a growing importance in recent years. Merge: when two firms agree to go forward as a single new company rather than remain separately owned and operated. Acquisitions: when one company takes over another and clearly establishes itself as the new owner. The recent acquisition of IBMs personal computer business by the Chinese firm, Lenovo. 12. Less research has been conducted on cross-border M & As than international strategic alliances, a recent review suggested that M & As are used to: Gain access to important international markets. Obtain new knowledge. Develop new capabilities. We need to learn about international M & As, as they present greater challenges to achieving success than most other strategies. We know that many M & As are not successful. 13. Recent research explains how firms can complete acquisitions that are valuable and difficult to imitate, thereby contributing to a competitive advantage. Research suggest when firms complete acquisitions that allow them to control new resources and combine these with existing resources to develop new capabilities, their performance is likely to improve. 14. Another topic of increasing importance, why and how foreign firms enter them, and how local firms react. Its strategies have become increasingly important: The accumulated value of foreign direct investment by these firms over time is now greater than $800 billion. It has been predicted that a few emerging market countries are likely to have a significant effect on the world economy over the next 20-40 years. These countries include Brazil, Russia, India, and China. 15. Its important to learn about institutions in the domestic environments, also its realized the importance of different institutional environments across countries. There are significant effects of different institutional environments on firm strategies. Firms may employ different strategies in different institutional environments. Firms are concerned about the resources they must have to be successful in different international markets and different institutional environments. 16. A report entitled Innovate America (2004), concluded that innovation was the single most important factor that will affect the success of US firms in the 21st century. According to the Innovation Index, the US slipped in ranking from 1st in 2002 to 3rd in 2004. Research has been conducted on how corporate and business-level strategies affect innovation. M and As can lead to reduced innovation output and that acquisitions can even be used as a substitute for innovation. 17. Recent research suggests that firms try to buffer their own unique and valuable technological knowledge while trying to stay attuned to new externally created technological knowledge. Two recent phenomena of potential importance are the increased number of international R & D alliances formed and efforts to establish R & D centers in foreign countries. The R & D alliances are designed to use different but complementary knowledge stocks to create uniquely new innovations. 18. Alternatively, foreign research centers usually have two purposes: 1. They are intended to build on knowledge unique to the host country that allows the firm to develop products that will be successful in that countrys domestic markets. This is especially important where the markets are large (e.g., China). 2. To obtain new knowledge that can be diffused throughout the organization to create innovative products that are competitive in global markets. 19. Last 25 years much of researcher has focused on the content of the strategies. There a definite need to a better understand to the processes used to develop and implement effective strategies. Tow questions must be raised especially to the boards of directors. 1. What are the process used by the board of directors to evaluate and approved (or not) the major strategic decisions? 2. How does the board remove or replace a CEOs? 20. Much of strategies leader ship research focused on the demographic characteristics of top executives managers and top management but the recent research represents a perceptible change. For Example: Cannellas earlier work focused on processes (Cannella & Lubatkin, 1993). 21. Cannellas resent work with Hambirk examines the predictors of when CEOs have COOs, the authors found that the firm with both CEOs and COOs have lower performance than those with CEOs only. (Hambirk & Cannella ,2004). More research is needed on the process of making and implementing strategic decisions. Book edited by Chakravarthy (2003) examined: - the dynamic of the strategy content overtime - effect of the strategy process dimensions on firm performance. 22. -Interrelation ship between firm context and strategy process. - Linkage among context process and outcomes. - the editors emphasize how firms develop strategies that create and sustain competitive advantages. Book edited by Floyed (2004) explains: - the genesis of innovative strategy making, contexts of innovation and models of strategic renewal. Although These edited Books provide a beginning foundation, we clearly need more research on strategy implementation process. 23. Corporate Governance is actually important in both field of finance and strategic management because its practical and scholarly importance. Strategic entrepreneurship -Recent research has suggested that in order to enjoy success overtime , new venture firms must be both strategic and entrepreneurial. New venture firms are generally entrepreneurial but the do not succeed because they dont take strategic actions to establish and maintain a competitive advantages. 24. Alternatively, while established firms may enjoy a competitive advantages they are likely to lose it over time if the are not entrepreneurial additionally established firms sometimes find difficult to be entrepreneurial. There are many other topics on which research is conducted in strategic management, the author have tried to emphasize some of the most important to the field and to the top executives and managers as a means of guidance for making strategic decisions in their organizations. 25. Great Thanks To You