strategy from different perspectives
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Business strategyTRANSCRIPT
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Strategic Management
Strategy from different perspectives
Strategy content and strategy processTwo broad approaches to strategy developmentDifferent perspectives on strategy development
Sheena Davies
Strategy content & strategy process
Strategy content is the result of strategic activities
Strategy process considers the way in which strategies are, or should be, formed.
Broadly there are two types of approach;
the planning approach ‐ deliberate strategies
the incrementalist approach ‐ emergent strategies
Deliberate & emergent strategies
RealisedStrategy
UnrealisedStrategies
EMERGENT STRATEGY
DELIBERATE STRATEGY
From Mintzberg & Waters (1985)
Strengths of the two approaches(De Wit and Meyer: 2004)
Deliberate strategies Emergent strategies
DirectionCommitmentCoordinationOptimisationProgramming
OpportunismFlexibilityLearningEntrepreneurshipSupport
CONTRADICTORY BUT BOTH ARE NECESSARY
Skilful strategic management can achievea balance of the two approaches
Risk of incremental approach: Strategic drift
DRIFT
EnvironmentalChange
StrategicChange (incremental)
Time
Amountof
Change
Frameworks for understanding how strategies come about
Whittington (see next slide)
Mintzberg et al (The Strategy Safari)(see the Blind Men and the Elephant poem on Victory)
Johnson, Scholes and Whittington (2008)
Four ‘lenses’ for understanding how strategies come about – this is a reworking of previous frameworks
(note – previously only 3)
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Perspectives on strategy: Whittington
OutcomesProfit maximizing
Plural
Processesdeliberate
emergent
Whittington 2002:10
CLASSICAL EVOLUTIONARY
SYSTEMIC PROCESSUAL
Mintzberg et al –Ten approaches to strategy
The design school
The planning school
The positioning school
The entrepreneurial school
The cognitive school
The learning school
The power school
The cultural school
The environmental school
The configuration school
Johnson, Scholes and Whittington (2008):
The strategy lenses
Design lens
Experience lens
Ideas lens
The discourse lens
The ‘design’ lens
Also known as the classical, prescriptive, deliberate, planned or rational approach.
Exemplified by writers such as Ansoff and Porter Involves rational analysis using models/matrices in an
attempt to match the organization’s capabilities to the environment
Favoured by management because it is neat, self‐contained, tangible, looks like a technique
Favoured by lenders and investors because it gives the impression of providing ‘answers’ about the future
BUT – it is not a perfect representation of reality
The design lens assumes a rational model of decision‐making
Assumes that ‘rational economic man’ makes decisions that will maximize return on investment
Also assumes;
It is possible to gather all relevant information
Information is quantifiable
(Harrison and Pelletier 1997)
The ‘experience’ lens
Accepts that analysis is ‘coloured’ by human irrationality, and taken‐for‐granted assumptions
Strategies develop incrementally
Strategies tend to mimic the past
GROUP THINK
RISKY SHIFT SYNDROME
IMPRESSION MANAGEMENT
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The experience lens: Bounded‐rational model of decision‐making
A perfect representation of reality is not available
Time and cost constraints
Cognitive limitations
(Harrison and Pelletier 1997: 360)
The experience lens: Well known drifters….
From this.. To this…
Because of these…
The experience lens: Cultural influences on strategy
National culture
Organisational field (industry level)
Divisional culture
Organisational culture
Departmental culture
Individual attributes Education, race, religion, gender, class, nationality.
The ‘ideas’ lens
The design lens views organizations as tightly controlled systems/machines
The experience lens views organizations as cultures that do not break from the past
So, how do new ideas ‘break through’?The ideas lens sees organizations as evolutionary systems where the organization’s survival rests on the innovation process. New ideas must be given breathing space otherwise they will die.
The ideas lens:Evolutionary perspective
“Among all competitors, those whose particular conditions happened to be most appropriate for testing and adoption will be ‘selected’ as survivors…the survivors may appear to be those having adapted themselves to the environment, whereas the truth may well be that the environment has adopted them” (Alchian 1950 in Whittington 2002: 19)
The ‘discourse’ lens
How the ‘language’ of strategy influences organizations
“The way in which we talk about strategy – as well as the way in which we analyze particular actions that we categorize as strategic have political implications.”
(Hardy et al, 2000, p1229)
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Conclusion
The different perspectives and lenses are only a viewpoint. They are a different way of looking at the same thing.
They are all correct to some extent
The classical school dominates because it gives managers and students something tangible to learn from but it doesn’t necessarily reflect reality
Strategies cannot be detached from the people who formulated them.
Finally…
Should organizations have
a strategy at all?
“… strategies are to organizations whatblinders are to horses: they keep them going
in a straight line but hardly encourageperipheral vision.”
Source: Mintzberg (1998: 18)
References De Witt and Meyer, (2004), Strategy: Process, Content, Context, Third
Edition, Thomson Learning. Hardy et al (2000) ‘Discourse as a strategic resource’, Human
Relations, Vol. 53, No. 9. p1229. Harrison, F and Pelletier, M (1997), ‘Managerial attitudes towards
strategic decisions: maximizing versus satisficing outcomes’, Management Decision, Vol. 35, Issue 5, pp358‐364.
Harrison, F and Pelletier, M (2000), ‘Levels of strategic decision success’, Management Decision, Vol. 38, Issue 2, pp107‐117.
Johnson, Scholes and Whittington (2008), Exploring Corporate Strategy, 8th Edition, FTPH. (ch 11 and Commentary pg 30)
Mintzberg, H et al (1998) The Strategy Safari, Prentice Hall Whittington, R (2001), What is strategy – and does it matter?, 2nd
Edition, Thomson (handout in scheme of work)