1. The Anatomy of Fatal Business Strategy
By Erhard K Valentin

2. Introduction The Problem:
Boise Cascade – Building material Division Failure
From 24 to 120 outlets in but by 1982 all outlets were closed
Method: Participant – Observer Approach

3. Conceptual Underpinnings
Business failure can be analyzed from:
Strategic Angel: Which decisions were wrong
Behavioral Angel: How and why they were wrong

4. The Behavioral Perspective
Decisions and strategies are developed and used according to the perceptions of those who make them
Business may fail not because of lack of resources but because of human limitations in seeing strategic problems and in effective strategy development and implementation. This could be explained through:

5. The Behavioral Perspective (Continuo…)
Information processing
Because human information processing is bounded people rely on:
Heuristics:
Reasoning by analogy
Wishful thinking
Availability
Vividness
Simulation
Confirmation

6. The Behavioral Perspective (Continuo…)
Group dynamics and organizational culture
Interactions among individuals in groups tend to either exclude biases or intensifying them
In a cohesive culture the tunnel vision emerges (control and inertia). This comes from group members experiences and prospective.

7. The Behavioral Perspective (Continuo…)
The structure of management Decision making:
Because rationality is bounded executions reduce the realm of possibility to partially evaluated ranked alternatives. This sores them from exhausting research in scenarios. Then, one alternative will emerge while decisions are shaped by political/cultural considerations they come normally expressed in rational analytical terms.

8. A behavioral framework for studying organizational phenomena
Physical systems, distinctive competencies, beliefs, interests, and power structure are roots helping firms to prosper but in long-term they prevent organizations from responding to environment change.

9. The rise & fall of BMD A descriptive contextual account
The origin and evolution and Boise cascade aggressive expansion through acquisition and diversification
Financial criteria of success was used rather than market position and strategy

10. The rise & fall of BMD …(Continuo) A descriptive contextual account
The origin of helmsmen
Successful, fair, tough, earthy and practical
Corporate retrenchment and expansion
Recession of the economy and lumber and paper business focus. Vertical integration under consultancy
Dual expansion plan
Targeting DIY segment and contractors

11. The rise & fall of BMD …(Continuo) A descriptive contextual account
Consultant Recommendation
Dual service outlets
Expansion program based on DIY business
Hire a retailing manager for contractor outlets
Uniformity among outlets
Retailing IS

12. Implementation Sectional = Housing was slow
Organizational = decentralization vs. Centralization
Recruitment of retail manager with neither power nor mobility
The Decline of BMD

13. Diagnosis External Forces: Weaknesses: compared with competition:
Market Fall
Serious competition
Maturity of PLC
Weaknesses: compared with competition:
Too many poor sites
Lack of standardization in store size
No dominance in metro areas
Decentralization
Inadequate IS

14. Behavioral process in context
Weak assumptions about customer behavior (DIY)
Rising managerial aspiration and clear scenarios blinded decision makers
Information was used to support assumptions
Outlets bought were not located in effective sites both for market and supply

15. Behavioral process in context…(Continuo)
Market share was not an objective
Forces of decentralization tried to fail centralization of standardization
DIY need different brains
No or slow IS

16. Conclusion
Past successes and ideological rigidity can faster dysfunctional inertia and mindsets. Group builds value of membership against wisdom. Later they discover that traditional strategic recipes are no longer viable. In this case instead if changing organization and hiring retail experts BMD relied on existing organization and brains ( experience was in selling to contractors no DIY experience)