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Title: Identifying strategic content among former public utilities
Author: Viney, Howard
Awarding Body: Middlesex University
Current Institution: Middlesex University
Date of Award: 2001
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Abstract:
The importance of privatisation and other forms of market liberalisation as tools of economic and political policy is well documented, and the concepts continue to command prominence in a large number of economies across the globe. Most academic research undertaken to date has focussed upon its macro-economic motivations, the importance of regulation, and increasingly assessments of the economic benefits of instituting privatisation programmes. The literature indicates a dearth of empirical research on the managerial aspects of privatisation: the strategic responses of the companies emerging from such privatisation programmes, and the key influences which have shaped their strategic responses. In general, the industries which have witnessed privatisation have tended to be former state owned enterprises, or industries of strategic importance, where low performance standards and quality failures have been characterised as being endemic. Clearly, there is a real need to learn from existing responses, so that models of best practice can be established to smooth the transition of organisations encountering strategic reorientation, and to prevent the development of new sets of operating difficulties. In addition, the literature suggests that existing managerial models which aim to provide business decision makers with viable strategic responses to changing circumstances have not been adequately tested in non-traditional market conditions such as those experienced by companies following a major privatisation. Accordingly, this study aims to identify the content of corporate and business level strategy among a sample of recently privatised former public utilities: the Regional Electricity Companies of England and Wales, and to understand the nature of the strategi~drivers which have helped to shape these strategic responses. In so doing, the research aims to create an understanding of the suitability of a range of corporate and business strategy combinations for application in a partially regulated environment, in order to enable a company: to identify and pursue the appropriate strategies in pursuit of competitive advantage; manage its relationships with a variety of strategic drivers; to fulfil its public service obligations; and in so doing to navigate a potentially uncertain environment in a time of profound change. In addition, the study aims to review a series of existing managerial models in the light of the experiences of the RECs, and determine the degree of confidence that can be said to exist in their applicability in non-traditional market situations. In particular, the thesis comments upon the applicability of the Miles and Snow typology of organisational strategy, structure and process in a regulated environment, and suggests some tentative amendments. This research is identified as being primarily exploratory, based as it is upon a study of a single industry. While the author has confidence in the validity of the findings, this thesis is intended to be the first stage in an extended research project which would see these findings subjected to rigorous verification in a wider sample of companies of this type. As discussed earlier, the need for research of this nature at this time is identified as being compelling due to the current proliferation of privatisation programmes, the severity of the problems that they are trying to resolve, and the unique position of UK industry to provide recommendations based upon practical experience. The research utilises a broadly phenomenological method. An extensive review of the literature revealed not only limitations in existing knowledge, but the work of various authors in identifying the available corporate and business level strategic options available to organisational decision makers. These lists of options provided a broad framework for the identification and gathering of data, and its inductive interpretation. The process of data collection was undertaken initially using a form of content analysis of published sources, against a framework derived from the literature and a series of exploratory interviews. From this process a series of observations, in the form of tentative propositions, were drawn. These propositions were then tested deductively using multiple in-depth interviews within three case study companies and the degree of confidence in each proposition established. The case study companies were selected on the basis of their ability to represent the industry as a whole, based upon their current approach to growth; the research having earlier identified three distinct sub-groupings of behaviour in respect of strategies for growth. The research resulted in a number of key findings. Firstly, that despite expectations that differing patterns of strategic response would emerge following market liberalisation, the companies remaining within the industry appear to have gravitated towards three basic generic responses; broadly defined as concentrated growth, organic market development, and market development by acquisition. Consequently, there is a large degree of strategic symmetry although tactical differences do remain. Secondly, that the importance of regulation as a driver of strategy can not be underestimated, even in those parts of the industry which are theoretically free from regulatory influence. The findings suggest even allowing for the importance of regulation, other factors such as ownership, leadership, as well as other external and internal factors all need to be accounted for. The general conclusion here was that the impact of strategic drivers was situational. Thirdly, that companies have little or no flexibility in their choice of the business/competitive strategy that they pursue, with a combination of market regulatory and consumer expectancy factors dictating their terms of competition. Finally, the research suggests a need for the amendment of the Miles and Snow typology before it is applied in regulated environments, as well as suggesting that a degree of caution is exercised in the use of some other established and externally verified managerial models. The research produces a wide range of recommendations for further study. These recommendations concern (a) verification of conclusions drawn by the research and (b) exploration of issues which emerged during the research process. The research extends the existing literature's understanding of strategic content decisions among companies adapting to situations of strategic reorientation. It provides numerous examples of the responses organisations followed to a variety of strategic drivers, and identifies options which have been identified as viable in the UK energy industry as it currently stands. The research fills a number of gaps identified within the literature in relation to: the nature of organisational responses to strategic change; the relationship between strategic content and strategic drivers; the ability of long standing managerial models to perfonn in non-traditional market situations; and most importantly the viability of strategic responses in regulated environments. There are a number of limitations which can be identified within the research. The qualitative nature of the research reflects a reliance upon interpretive analysis and opinion, either by the author or the industry managers who provide the majority of the primary data. However, the author has striven at all times for objectivity and has utilised techniques such as triangulation of data sources and collection methods to ensure objectivity. In addition, the focus upon a single industry may be viewed as a limitation upon the applicability of the findings to a wider business audience. However, in both of these cases, the author argues that the exploratory nature of the research and the acknowledgement of the need for, and intention to pursue, external verification overcomes any concerns that may exist in relation to these possible limitations. The thesis comprises thirteen chapters. Chapter One introduces the study by providing a brief critique of the literature and establishes the study's aims and objectives. Chapters Two and Four provide a review of the relevant literature in relation to the general management literature and the literature concerning issues relating to privatisation. The methodology and research design are outlined in Chapter Three. The remaining chapters present the analysis and interpretation of data in two stages: the preliminary stage in Chapters Five to Seven, which is summarised in Chapter Eight; and the primary stage in Chapters Nine to Eleven, summarised in Chapter Twelve. The thesis is concluded in Chapter Thirteen where the major findings and recommendations for future study are annotated.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.568452  DOI: Not available
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