patterns in strategy formation by mintzberg

8/10/2019 Patterns in Strategy Formation by Mintzberg

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GSM 6190

Theory in Management

Title : Patterns in Strategy Formation

Authors : Henry Mintzberg

Presented By: Megat Sharifudin b. ul!i"i #GM0$9%&'

Mohamad (a)i* b. +a,i Abdul Mubin #GM0$9%6'


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Objectives

To examine how strategy maker formulate and

operationalized the concept of strategy:

Through a conscious processstrategy may unintentionally formed through series

of decisions


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1. Introduction

How organizations make and interrelate decisios?

3 theoretical groupings/ modes

1.!he planning mode " depicts the process as a highly ordered, neatly

integrated one, with strategies explicated on schedule by a purposefulorganization

#.$daptive mode% depicts the process as one in which many decision-

makers with conflicting goals bargain among themselves to produce a

stream of incremental, disjointed decisions

3.&ntrepreneurial mode " a powerful leader takes bold, risky decisions

toward his vision of the organization's future

'ut most literature remains theoretical without being empirical.

!he contradictions among the three modes remains to be

investigated.


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-enition o* Strategya deliberate conscious set of guidelines that determines

decisions into the futuremanagement theory: . . . the determination of the basiclong-term goals and objecties of an enter!rise" and theado!tion of courses of action and the allocation ofresources necessary for carrying out these goals$%handler&

'll these de(nitions treat strategy as$a&)*!licit$b&deelo!ed consciously and !ur!osefully

$c&made in adance of the s!eci(c decisions to +hich ita!!lies.,n common terminology" a strategy is a !lan.


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titis:

he de(nitions !resented are incom!lete for theorganization and nono!erational for the researcher.

/y restricting strategy to e*!licit" a !riori guidelines" itforces the researcher to study strategy formation as a!erce!tual !henomenon'll too often reducing his conclusions to abstractnormatie generalizationsMintzberg" in this !a!er" referred the aboe de(nition asintended strategy. Strategy in general" and realizedstrategy in !articular" +ill be de(ned as apattern in a

stream of decisions.+hen a se0uence of decisions in some area e*hibits aconsistency oer time" a strategy +ill be considered tohae formed.


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Mintzbergs a!!roach enables us to consider both sides of

the strategy formation coin:

strategies as intended" a !riori guidelines as +ell asstrategies as eoled" a !osteriori 1 argumentconsistencies in decisional behaior.

he strategy ma2er may formulate a strategy through aconscious !rocess before he ma2es s!eci(c decisions" or

' strategy may form gradually" !erha!s unintentionally"as he ma2es his decisions one by onea

aaa


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The (esearh Methodology3ecessitate the study of decision streams inorganizations oer time !eriods long enough todetect the deelo!ment and brea2do+n of !atterns

%om!le*" e*!loratory and inductie in nature


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Step 4: Collection of basic datato uncoer +hateer traces +ere left of decisions andeents that had ta2en !lace as many as (fty yearsStep 2: Inference of strategies and periods of changeFrom the chronology of decisions" diided into distinct

strategic areas"arious strategies +ere inferred as !atterns in streams ofdecisionsthen com!ared +ith each other" as +ell as +ith other data

such as sales" budgets" and sta5 leels" in order toidentify distinct !eriods of change in the formation ofstrategy


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Periods o* hange 2ere:Incremental: during +hich ne+ strategies formedgradually6Piecemeal: during +hich some strategies changed +hileothers remained constant6Global: during +hich many strategies changed 0uic2lyand in unison.

Continuity:during +hich established !atterns remainunchanged63eriods o* limbo: during +hich the organizationhesitated to ma2e decisions63eriods o* fux: during +hich no im!ortant !atterns

seemed eident in the decision streams


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Step 7: Intensive analysis of periods of change

shifted from the broad !erce!tion of oerall !atterns tothe intensie inestigation of s!eci(c !eriods of change.

relied on in-de!th re!orts and" +here !ossible" interie+s

+ith the original strategy-ma2ers


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Step 4: Theoretical analysis

' re!ort +as +ritten and a grou! then met in a series ofbrainstorming sessions to generate hy!otheses to e*!lain

the (ndings.)*!lain 8o+ of ideas:4hen is a strategy made e53liitly that ontrols subseuent deisions2hen does a strategy e7ol7e im3hitly as a on7ergene in a stream o* ad

ho deisions84hen do intended strategies difer *rom reali)ed ones84hat is the role o* 3lanning leadershi3 shared goals and bargaining inintegrating diferent strategies8 nder 2hat onditions are *ormal analysisand 3lanning used82hat does the term ;3lanning; mean in the onte5t o* strategy *ormation84hat are the relati7e in"uenes o* e5ternal *ores organi)ational *ores

and leadershi3 in strategy *ormation84hen and 2hy are organi)ations 3roati7e and reati7e8+o2 do organi)ations balane hange 2ith stability84hat o7erall 3atterns does the 3roess o* strategy *ormation *ollo28

hese 0uestions stimulated debate and discussion" +hich in turn led to thegeneration of hy!otheses. hese in turn are on their +ay to being +oen into

theories


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ase 1: The Strategies o* ?

Seen distinct !eriods:efore 49;: !u"#$4% : global change & em!hasis on 0uality and technical

e*cellence" aggressie e*!orting" and rigorous sericestandards" all integrated around the dominant element ofthe !eo!leermany as +ell as to +orld-+ide e*!ortmar2ets49=9: minor change'dertising +as introduced" modi(cation in design"

economy" durability


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49?@ to 49?: continuityut pro'ts (ere lo( due to competitive pressure and

increase in cost49?= to 49A@: gropingBeacted in the form of an an*ious and disjointed search

for ne+ models. Many +ere introduced in this !eriod49A4 to 49A: global change

%onsolidation3e+ integrated turnaround strategyStylish ne+ modelBeliable and economic assembly/uild !lant abroad $lo+ cost&Mar2eting strategy C !erformance" reliability" serice49A= - !ro(table again


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ase =: .S. Strategy in $

49=@: global changeDirect monetary aid to the French49=@ to 49=7: continuity

49=: !u") then global change

French left Eietnam and the .S. began a !rogram ofdirect aid to the South Eietnamese" +ith the intendedstrategy of democratizing the goernment of Diem.


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49== to 49?4: continuity

direct aid to the South Eietnamese" +hile the intendedstrategy of democratization +as neither realized norigorously !ursued49?4: global change

change the intended strategy from !assie aid to actiesu!!ortcoert +arfare cam!aign against 3orth Eietnani. 't theend of the year" under !ressure from Diem" Gennedyagreed to a build-u! of su!!ort troo!s


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49? to 49?=: incremental change leading to globalchange,ncrease in number of troo!s 49?4 $9;& to end of 49?$44"@@@&Military %ou! $Diems goernment&%onsiderable confusion bet+een Iashington" themilitary" and the %,' +ith Diems >oernment.

assassination of GennedyJyndon Kohnson - uncertain ho+ to !roceed and reluctantabout a!!roing large-scale bombings. /ut eents +eredragging him along.Major retaliatory stri2e

Search and destroy strategy had begun to re!lace theenclae strategy


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49?= - 49?A: continuityThree strategies

First" the land +ar +as escalated until the .S. troo! leelin Eietnam reached a !ea2 of oer half a million in 49?A

Second" the bombing cam!aign +as intensi(eds!oradically throughout the !eriod

hird" Kohnson !ut !ressure on the 3orth Eietnamese"through !eriodic ariations in the bombing cam!aign" to

come to the negotiating table


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49?;: global change>reat resistance to the +ar e5ort that +as gro+ingamong the .S. !o!ulation

Partial bombing halt

Beduction of the latest de!loyment of troo!s

Kohnson not to see2 re-election

3orth Eietnam


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49?; to 49?9: limbo) then global changeBichard 3i*on too2 oer - !roactie" integrated strategyLhe referred to its goal as !eace +ith honor

Eietnamization - the +ithdra+al of .S" troo!s and thee0ui!!ing of the South Eietnamese to ta2e oer the

(ghting

'ctie !eace initiaties to negotiate a settlement"alternated +ith military !ressure

Pressure on the BussiansLby threatening a +ithdra+al ofcoo!eration on other )ast-Iest negotiationsLto in8uencethe 3orth Eietnamese to reach a settlement"


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49A@ to 49A7: continuity*ithdra(al of troops+eriodic bombing and ground e"cursion+olitical pressure on soviet

#$,- left /ietnamno military and funding for /ietnam

#$,0 South /ietnam collapsed


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Some General onlusions About Strategy@ormation


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Strategy @ormation as the nter3lay o*Cn7ironment Deadershi3 and Bureauray

Strategy formation in most organizations can be thoughtof as reoling around the inter!lay of three basic forces:$a&an environment that changes continuously butirregularly" +ith fre0uent discontinuities and +ide s+ingsin its rate of change

$a&an organizational o!erating system" or bureaucracy)that aboe all see2s to stabilize its actions" des!ite thecharacteristics of the enironment it seres

$a&a leadership +hose role is to mediate bet+een theset+o forces" to maintain the stability of the organization


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Strategy can then be ie+ed as the set of consistentbehaiors by +hich the organization establishes for atime its !lace in its enironmentstrategic change can be ie+ed as the organization


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a erns o ra eg ange

Strategy formation oer !eriods of time a!!ears to follo+distinct regularities +hich may !roe ital to understandingthe !rocess

3o need to d+ell on the !oint that strategy formation is not aregular" nicely se0uenced !rocess running on a standard (e-year schedule or +hateer.

'n organization may (nd itself in a stable enironment foryears" sometimes for decades" +ith no need to reassess ana!!ro!riate strategy.

hen" suddenly" the enironment can become so turbulentthat een the ery best !lanning techni0ues are of no usebecause of the im!ossibility of !redicting the 2ind of stabilitythat +ill eentually emerge

Patterns of strategic change are neer steady" but ratherirregular and ad hoc" +ith a com!le* intermingling or !eriods

of continuity" change" 8u*" limbo


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-eliberate 7ersus Cmergent Strategieshe study of the inter!lay bet+een intended and realizedstrategies may lead us to the heart of this com!le*

organizational !rocess

hese t+o" at least in theory" can no+ be combined in three+ays:

$4&,ntended strategies that get realized6 these may be calleddeliberate strategies

$&,ntended strategies that do not get realized" !erha!sbecause of unrealistic e*!ectations" misjudgments about theenironment" or changes in either during im!lementation6

these may be called unrealized strategies

$7&Bealized strategies that +ere neer intended" !erha!sbecause no strategy +as < intended at the outset or !erha!sbecause" as in $&" those that +ere got dis!laced along the

+ay6 these may be called emergent strategies.


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onlusion' strategy is not a (*ed !lan" nor does it changesystematically at !re-arranged times solely at the +ill of

management.

he dichotomy bet+een strategy formulation and strategyim!lementation is a false one under certain commonconditions" because it ignores the learning that must often

follo+ the conce!tion of an intended strategy.

he +ord formation is misleading since +e commonly referto as strategies many !atterns in organizational decisionsthat form +ithout conscious or deliberate thought

here is !erha!s no !rocess in organizations that is moredemanding of human cognition than strategy formation. )erystrategy-ma2er faces an im!ossible oerload of information.'s a result +e can hae no o!timal !rocess to follo+

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patterns in strategy formation by mintzberg

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