Принятие финансовых и стратегических решений в компании (международной)в период кризиса.

Introduction
1 Theoretical bases of decision-making in company’s management
1.1Maintenance of decision-making. Decision-making stages
1.2Bases of strategic management in the company
1.3Model of strategic management
1.4 Concept of financial strategy of the company
2 Strategic targets in business, connection with financial strategy and financial management
2.1 Role of the financial department in company’s strategy
2.2 Cost of business as the basic indicator of strategic financial management
2.3 Evaluation (comparative analysis) of the management estimation during the financial crisis
3Company’s strategy during the crisis
Conclusion
The list of references

Принятие финансовых и стратегических решений в компании (международной)в период кризиса.

It is the opposing forces of operative and strategic business management, arising from the internal logic of the relationships that make a truly well-founded strategic planning essential. We can never make conclusions about strategic development from the operative course of business. Even the best balance sheets and profit and loss accounts never provide enough information on the long-term and permanent capability of a company to remain in business. Operative tools say nothing to us about the health of a business.
Strategic strategy means, therefore, constantly evaluating and improving the quality and durability of the present requirements for success and to create the requirements for success in the future. While we can judge the success or lack of success of current operative business activity from the accounting system on the basis of income and expense or receipts and disbursements, very different measures must be used to assess the potential for success.
The decisive measures for the evaluation of current potentials are primarily the indicators for the market positioning of a company and the consequent fundamental cost structures. For the evaluation of future potentials for success, we must add the possibility of competitive substitution, primarily on the basis of technological substitutions and profound knowledge of the problems of the end-user, normally the consumer.15
Picture 1.2.1 –Orientation and business measures for business management
Only on this basis is it possible to recognise and evaluate the opportunities and risks inherent in new technological developments, to identify our true competitors and thus to have some control over the dangerous problem of competitive substitution.
Most authors agree that the strategic management tradition started to take form in 1960’s when the seminal works by Chandler (1962), Ansoff (1965) and Andrews (1965) were published (Rumelt et al., 1994; Pettigrew et al., 2002). The strong diversification in the field that we can witness today dates back to 1980’s when economics, organizational sociology and political science -oriented sub-fields (such as industrial organization, transaction cost economics, agency theory, modern game theory, evolutionary economics, resource dependency, organization ecology, new institutionalism) begun to develop (Rumelt et al., 1994). At the same time, also behavioural and organizationally oriented research (such as cognitive models, learning organization, core competence and dynamic capabilities) begun to develop but one had to wait until 1990’s before they really started to flourish (Sanchez and Heene, 1997; Pettigrew et al., 2002).
The strategic management, in general, aims at understanding how companies may improve their performance. As competitive environments evolve, and the ways in which companies respond to and trigger environmental changes is altered, the strategic management theories must also evolve. Taking the evolutionary perspective as a starting point we base our review of strategic management perspectives on the three eras distinguished by Venkatraman and Subramaniam (2002): first, the era wherein the strategy is viewed as a portfolio of businesses (referred here as traditional strategic management), second, as a portfolio of capabilities (referred here as competence-based view), and third, as a portfolio of relationships (referred here as network approach to strategic management). Each era represents how researchers have rallied around a particular concept of strategy and how they have viewed the creation of competitive advantage.
A closer analysis reveals that the third era, strategy as a portfolio of relationships, is still an emerging and therefore also fairly amorphous perspective. It is a collection of fragmented ideas rather than an established perspective within the strategic management field. We pay particular attention to how an organization and its relation to environment are viewed and what is the role of relationships and networks in defining the research focus, the view of competition and sources of competitive advantage in each era. In the following, these three major perspectives will be discussed in more detail (see Table 1).
Table 1.2.1
Major strategic management perspectives
Traditional strategic management (strategy as a portfolio of businesses)
Competence-based strategic management (strategy as a portfolio of capabilities)
Network approach to strategic management (strategy as a portfolio of relationships)
Central research problems
Why firms exist? What environmental factors determine the scope and size of the firm?
Why firms differ? How heterogeneity affects their competitiveness?
Why and how firms become connected and interdependent? How relationships affect their ability to compete?
Disciplinary roots
Influenced largely by industrial organization economics
Influenced by Penrosian the growth of the firm theory and resource-based theory
Influenced by industrial network approach and strategic network approach
Exemplary studies
Ansoff 1965; Andrews 1971; Porter 1980, 1985; Rumelt et al. 1994
Wernerfelt 1984; Prahalad and Hamel 1990; Barney 1991; Grant 1991; Hamel and Prahalad 1994
Håkansson and Snehota 1989; Juttner and Schlange 1996; Gulati et al. 2000
Unit of analysis
Business units within the corporation
The corporation
Organization with blurred boundaries
Nature of environment
Stable, certain, deterministic
Some degree of uncertain
Both certain and uncertain, complex
Strategy-environment –relation
Closed, Beating the competition with scale of operations; The environment rewards optimal strategies with survival (economic Darwinism);
Firm adapts to environment
Some degree open, Creating unique competencies;
Firm shapes the environment or adapts to it
Open, Creating unique resource constellations;
Firm shapes the environment or adapts to it
Sources of competitive
Physical assets, operational
Internal capabilities, organizations as
Networks of relationships; Firms
advantage
excellence; Best fitting firms survive
unique resource collections; Firms with most unique capabilities survive
with best/optimal relationship portfolios survive?
Competitive orientation
How organizations can out beat other organizations?
How organizations can create inimitable capabilities to create sustainable competitive advantage?
How organizations can create value with other organizations to compete with other networks?
Nature of strategy process
Planned, rational
Emergent
Emergent and dynamic
In their referenced book Rumelt et al. (1994) study the historical and disciplinary roots of strategic management theory, and propose that strategic management should address to questions like “How do organizations behave (i.e. how organizations make assumptions and decisions about context)? Why are organizations different (i.e. what sustains the heterogeneity in resources and performance despite competition and imitative attempts)?”. These questions are relevant and in focus in all three research approaches. However, frames of reference adopted by economists, which we associate closely with traditional strategic management approach, seem to typically focus on questions such as “Why do firms exist? What factors determine the scope and size of the firm? What is the function of the firm and its managers?” (Seth and Thomas, 1994). It seems also that one basic difference in these three perspectives is that the traditional strategic management approach originating from economics has primarily concentrated on strategy formulation while the strategy implementation has mainly been covered by organizational and sociologically oriented research, which are more close to the competence-based approach (Prahalad and Hamel, 1994; Seth and Thomas, 1994).
Håkansson and Snehota (1989) take a rather extremist position by contrasting the network approach and traditional strategy research with each other. They criticize the traditional strategy research for being rigidly interested on directing and managing the behaviour of individual organizations, and ignoring the consequences of interorganizational relationships. In a sense, the traditional strategy research seems to either explicitly or implicitly assume that organizations operate in faceless and atomistic environment, which is beyond the influence or control of the organization, and that strategy is about positioning a business in a given industry structure (Håkansson and Snehota, 1989). Such traditional strategy thinking might be suitable on existing, stable industries, but definitely not in emerging or strongly changing industries. Prahalad and Hamel (1994) also criticise traditional strategy research by arguing that organizations, which focus their strategic analysis within single industry and limit their attention to how they are positioned in their focal industry alone, often fail to anticipate the potential for new competitors to transform the structure of their industry and seriously undermine prevailing product-market positions.
In their critique Håkansson and Snehota (1989) state that the dominant idea in the traditional strategy research has been survival of the fittest (the fit between organizational capabilities and the requirements arising from the environment, often referred as the market). Moreover, the strategic management is seen as a pattern of activities performed by the organization aimed at adapting to the external environmental conditions in which the organization operates. Porter’s (1980) ‘five forces’ model provides a classic example of fit between organization and environment. Using the business unit as the unit of analysis, the model analyses how an organization’s strategy can match or is constrained by the industry environment. However, the model seems to adopt one fatal and largely simplifying assumption. The organizations are not allowed heterogeneity within industry, except as regards to scale. They are also viewed as identical in terms of the strategies they pursue (Barney, 1991; Seth and Thomas, 1994). The basic argument for this assumption seems to be that the environment rewards with survival of those organizations, which select strategies optimal to the industry (the idea of economic Darwinism) and organizations that deviate from optimal behaviour will be driving towards extinction.
It is typical of the traditional strategic management research that it emphasizes the accumulation and control of company internal resources. The effectiveness of an organization is dependable on its relative efficiency in combining and allocating the hierarchically controlled resources to adapt the environmental conditions (Håkansson and Snehota, 1989). Thus, the approach offers little insights into contemporary interorganizational relationships and networks (see also Sanchez and Heene, 1997).
The resource-based view of the firm and its strategic management, which can be traced to the seminal works by Penrose (1959) and Wernefelt (1984), switched the focus from industry structure, strategy groups and external competitive dynamics to the particular collection of tangible and intangible resources of the company (Pettigrew et al., 2002). The resource-based view of the firm introduced a conception of firms as heterogeneous accumulations of resources and sought to explain differences in performance by individual firms in terms of their distinctive resource endowments (Sanchez and Heene, 1997). The resource-based view was soon complemented by competence-based and knowledge-based theories (Prahalad and Hamel, 1994; Pettigrew et al., 2002).
The logic in competence-based theory is that if organizational processes and routines are valuable and difficult for rivals to imitate, organizations could create and sustain competitive advantage (Barney, 1991). The strength of the framework is that it allows the analysis of these internal processes in a more systematic way. The knowledge-based theory, on the other hand, perpetuated also the internal resource focus but in elaborating a more process-oriented view of the acquisition, maintenance and utilization of knowledge based resources (Pettigrew et al., 2002). However, the competence-based approach tends also to focus on company internal resources and competencies, and offers thus little insights to interorganizational relationships.
Time to time there has been studies in each perspective that have considered issues that are external to the organization. For example Sanchez and Heene (1997) argue that “firms may also form competence alliances that link one firm’s competences or resources to those of other firms in order to draw on a broader range of competences, to acquire desired competences more quickly, or to extend the reach of current competences into new competitive domains”. Also, Nalebuff and Brandeburger (1997) within the economics oriented game theory have noticed the importance of co-operative and competitive relationships. However, while these approaches provide completely valid points, they often fail to provide insights into explaining how and why organizations engage in resource and competence-based exchange relationships with each other, and how these relationships are governed and co-ordinated (e.g. value-adding activities within and between firms). In this area the industrial network theory seems to have a special strength. In our view, this is exactly what the network approach to strategic management should also provide. It should create understanding of how and why companies engage linkages with each other, how these relationships influence the business strategy and what strategic activities the networked business environment involves.
The basic proposition in the network approach to strategic management is that by linking firm-addressable resources, capabilities and competencies in a network of co-operating companies, all companies in the network may increase their strategic flexibility to quickly configure new resource constellations to serve rapidly changing market opportunities (Cravens et al., 1996; Sanchez and Heene, 1997). The firms may also be able to jointly realize greater economies of scale and scope and overcome time compression diseconomies. The approach should be about conceptualising how a company develops strategy and how the strategy becomes influenced, by understanding the resource flows in complex network of relationships. Compared to the earlier strategy frameworks, which have helped us to understand how organizations create and leverage resources and competencies within their organizational boundaries, the challenge is now to understand and theorise how companies create and leverage resources and competencies from a broader network of relationships (Venkatraman and Subramaniam, 2002; Gulati et al. 2000).
There is interesting discussion in Sanchez and Heene (1997), Mintzberg and Lampel (1999), and Pettigrew et al. (2002) on whether we should try to integrate these perspectives and create a unified theory. Sanchez and Heene (1997) see that unified theory should be the goal and claim that their competence-based competition approach is such approach. However, we tend to agree with Mintzberg and Lampel (1999) and Pettigrew et al. (2002) that different research traditions are products of evolution in the field, and thus have different focuses and perspectives to the issues. The paradigmatic unity is neither present nor perhaps even desirable in a field that should open up yet more to new ideas and is constantly being challenged by rapidly changing contexts. Thus, these perspectives should rather be seen as complementary than competing and as such does not require creation of unified theory.
In developing a network approach to strategic management, one can engage in different network traditions and base one’s ideas on varying assumptions of the organization-environment interface accordingly. It seems that the assumptions concerning freedom of act, convergence of actor’s goals and opportunity to control and manage the network differ considerably depending on the network approach taken (see e.g. Axelsson 1992; Håkansson and Ford, 2002).
The traditional strategic management theories have strong emphasis on accumulating and controlling resources within a single firm. However, the shift towards increasingly networked business environments raises a question whether these theories can still be considered as valid. Most organizations have limitations in terms of resources they can possess internally and hence need to develop a range of external linkages to gain access to needed resources. Combining the idea of networks and strategic management is still an emerging and rather amorphous perspective.
Interorganizational relationships and networks are inevitably a strategic issue for any company and should thus have a crucial role in the business strategy. The firm’s networks, and the resources they allow the firm to tap into, can serve as a source of sustainable competitive advantage (Gulati et el. 2000, p. 207). Håkansson and Snehota (1995) even argue that the future role, development and performance of a company can be largely explained by its ability to manage relationships with other organizations. Still there seems to be only a handful of researchers who have touched strategic management from an interorganizational relationship and network perspective.
Contributions on this issue emanate mainly from two schools of thought: the industrial network theory (IMP Group) represented by Håkansson and Snehota (1989), Johanson and Mattsson (1992) and Axelsson (1992) and from among the American based strategic network researchers, for instance, Jarillo (1988) and Gulati, Nohria and Zaheer (2000). The challenge of networks has also been acknowledged among strategy researchers themselves (e.g. Coyne and Subramaniam 1996; Sanchez and Heene 1997; Venkatraman and Subramaniam, 2002).
In their seminal work, Håkansson and Snehota (1989) presented a network approach to business strategy by contrasting the basic assumptions of the traditional business strategy literature with those of the network theory. They explicate how an organization (a business actor) and its interface with environment should be viewed in a network context. This is a major issue when looking at strategy from a network perspective. Axelsson (1992) further elaborates their ideas and adds the concept of power to network strategy context. According to Axelsson (1992, p. 191), the key issue in network strategy will be to form dyads or action sets in order to strengthen the firm’s interorganizational power, or position, in one or more organization sets. Juttner and Schlange (1996) go on by developing a strategy analysis framework for decision makers in markets-as-networks context.
In our network view, we adhere both to the European based industrial network theory (IMP Group) and the American based strategic network research, and their premises concerning the nature of the business environment (see Axelsson, 1992; Håkansson and Ford, 2002; Håkansson and Snehota, 1989; Juttner and Schlange, 1996; Jarillo, 1988; Gulati et al., 2000). These traditions seem to represent rather different, and simultaneously ideal type of networks. Therefore the utilization of both traditions involves many problems and requires much more effort than it is possible to accomplish here. To provide at least a flavour of the differences the assumptions made in the industrial network theory are described next and contrasted with those of the strategic network research.