strategy from different perspectives

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1 Strategic Management Strategy from different perspectives Strategy content and strategy process Two broad approaches to strategy development Different 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 Realised Strategy Unrealised Strategies EMERGENT STRATEGY DELIBERATE STRATEGY From Mintzberg & Waters (1985) Strengths of the two approaches (De Wit and Meyer: 2004) Deliberate strategies Emergent strategies Direction Commitment Coordination Optimisation Programming Opportunism Flexibility Learning Entrepreneurship Support CONTRADICTORY BUT BOTH ARE NECESSARY Skilful strategic management can achieve a balance of the two approaches Risk of incremental approach: Strategic drift DRIFT Environmental Change Strategic Change (incremental) Time Amount of 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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Page 1: Strategy From Different Perspectives

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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)

Page 2: Strategy From Different Perspectives

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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

Page 3: Strategy From Different Perspectives

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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)

Page 4: Strategy From Different Perspectives

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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)