Question

1 What are the advantages and disadvantages of the devil’s advocate, dialectical inquiry, and consensus approaches to making strategic choices?

2) When should a corporation or business unit consider outsourcing a function or an activity?

3) What are the pros/cons of technological leaders vs. technological followers as a functional strategy?

Answer 1

1)The advantages of devil's enquiry of making strategic choices are that it gives a contrarian views to the arguments and initiates debates on points which others consider unpopular or not feasible. This helps in gauging if the unpopular choices are really valid or not. Devil's advocates approach challenges the traditional strategic assumptions. Group thinking on popular choices can introduce biases, Devil's advocate approach can challenge those biases.

Disadvantages of devil's advocate enquiry is that consensus may be difficult to achieve is people are fixed strongly on their own ideas. Conflicts can occur and differences can get aggravated which does not lead to decision making.

Dialectical Inquiry considers two opposing viewpoints and takes the best of those two viewpoints and discards the weak points. These points are used to formulate a new idea for decision making. Thus a third idea is generated from the original two ideas. The dialectical inquiry aims to find a middle position which is acceptable to both opposing parties. This makes consensus easy.

The disadvantages is that people tend not to critically analyze the middle position and accept it as a solution just because they are common points in it. Only two starting positions are established in this method while there can be many other alternatives positions which can be considered.

Consensus approach is inclusive and takes into account the opinions of all the participants. It does create a volatile atmosphere in discussions and differences are solved mutually. A decision is accepted only when all the participants agree to it. There are checks and balances on this approach since every opinion is considered.

Disadvantages are that consensus decisions may not be the correct ones since it aims to satisfy the participants rather than solve the problem itself. Group thinking can introduce bias in this method. Focuses more on compromising one's position.

2) An organization should consider outsourcing a function or an activity if the costs associated with that function or activity are less at the outsourced party than at the organization. An activity or function can also be outsourced if the demand exceeds the capacity of the firm. If the outsourced firm can maintain the quality levels and delivery schedule and is able to produce at significantly less costs, then the activity must be outsourced.

3)Pros of technology leaders are that they are the leaders and first movers in the market. This gives them the advantages of capturing the larger shares of the market. Also, being the first mover will create a brand impression among consumers. They can charge a premium for their technology.

Cons of technology leaders is that the new technology they introduce is untested and consumers acceptance is not certain. If consumers don't accept the technology, it can lead to a loss of investment. Uncertainty is more with technology leaders. Investment costs are high.

Pros of technology followers is that they have a proven technology to work with. They can build and introduce products around that technology without the worry of consumer acceptance. Low investment is needed in this approach.

Cons are that market share is already captured by technological leaders since followers are always catching up. Technological followers have less brand value than leaders. They cannot charge a premium value for their products.