schools of strategy (2)

8/6/2019 Schools of Strategy (2)

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Farooq Ahmed Kirmani

MBA

M.Sc. Strategic Project Management

Strategic Management: The TenStrategic Management: The TenSchools of ThoughtSchools of Thought



The Design school The Design school



Premises of the Design School

Strategy formation should be a deliberate process of consciousthought

Responsibility for that control and consciousness rests with acentral figure/group

The model of strategy formation must be kept simple and informal.

Strategies should be one of a kind: the best ones result from a process of individualized design

The design process is complete when strategies appear fully formulated as perspective

These strategies should be explicit, so they have to be kept simple

Finally, only after these unique, full-blown, explicit, and simple

strategies are fully formulated can they then be implemented



The Planning School



The Planning School

The Premises of the Planning School:

Strategies result from a controlled, conscious processof formal planning, decomposed into distinct steps,each delineated by checklists and supported by

techniques. Responsibility for that overall process rests with the

chief executive in principle; responsibility for itsexecution rests with staff planners in practice.

3. Strategies appear from this process full blown, to bemade explicit so that they can then be implemented through detailed attention to objectives, budgets, programs, and operating plans of various kinds.



The Positioning School




Strategies are generic, specifically common, identifiable positionsin the marketplace.

That marketplace (the context) is economic and competitive.

The strategy formation process is therefore one of selection of these generic positions based on analytical calculation.

Analysts play a major role in this process, feeding the results of their calculations to managers who officially control the choices.

Strategies thus come out from this process full blown and are thenarticulated and implemented; in effect, market structure drivesdeliberate positional strategies that drive organizational structure



The Entrepreneurial School



The Entrepreneurial School

Premises of the Entrepreneurial School

Strategy exists in the mind of the leader as perspective, specifically a sense of long-termdirection, a vision of the organization's future.

The process of strategy formation is semiconscious at best, rooted in the experience and intuition of the leader, whether he or she actually conceives the strategy or adopts it fromothers and then internalizes it in his or her own behavior.

The leader promotes the vision single-mindedly, even obsessionally, maintaining close personal control of the implementation in order to be able to reformulate specific aspects asnecessary.

The strategic vision is thus malleable, and so entrepreneurial strategy tends to be deliberateand emergent ²deliberate in overall vision and emergent in how the details of the visionunfold.

The organization is likewise malleable, a simple structure responsive to the leader's directives,whether an actual startup, a company owned by an individual, or a turnaround in a large

established organization many of whose procedures and power relationships are suspended toallow the visionary leader considerable latitude for maneuver. Entrepreneurial strategy tends to take the form of niche, one or more pockets of market

position protected from the forces of outright competition.



The Cognitive School



The Cognitive School The Cognitive School

I f you don¶t understand my theory don¶t I f you don¶t understand my theory don¶t

worry, my students don¶t understand it; my worry, my students don¶t understand it; my

students don¶t understand it because I don¶t students don¶t understand it because I don¶t understand it«.R.Feynmanunderstand it«.R.Feynman

What seems to be out there is not«

Schema



The Cognitive School The Cognitive School

Premises of the Cognitive School

Strategy formation is a cognitive process that takes place in the mind of thestrategist.

Strategies thus emerge as perspectives²

in the form of concepts, maps,schemas, and frames²that shape how people deal with inputs from theenvironment.

These inputs (according to the "objective" wing of this school) flow throughall sorts of distorting filters before they are decoded by the cognitive maps,or else (according to the "subjective" wing) are merely interpretations of aworld that exists only in terms of how it is perceived. The seen world, inother words, can be modeled, it can be framed, and it can be constructed.

As concepts, strategies are difficult to attain in the first place, considerably less than optimal when actually attained, and subsequently difficult tochange when no longer viable.



The Learning School The Learning School




Formation vs Formulation

Emergent Strategy

Intended & Implemented Strategy

Disjointed Incrementalism

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The Learning School



The Learning School The complex and unpredictable nature of the organization's environment, often

coupled with the diffusion of knowledge bases necessary for strategy, precludesdeliberate control; strategy making must above all take the form of a process of learning over time, in which, at the limit, formulation and implementation becomeindistinguishable.

While the leader must learn too, and sometimes can be the main learner, morecommonly it is the collective system that kams: there are many potential strategists inmost organizations.

This learning proceeds in emergent fashion, through behavior that stimulates thinking retrospectively, so that sense can be made of action. Strategic initiatives are taken bywhoever has the capacity and the resources to be able to learn. This means thatstrategies can arise in all kinds of strange places and unusual ways. Some initiativesare left to develop by themselves or to flounder, while others are picked up bymanagerial champions who promote them around the organization and/or to the senior management, giving them impetus. Either way, the successful initiatives createstreams of experiences that can converge into patterns that become emergentstrategies. Once recognized, these may be made formally deliberate.

The role of leadership thus becomes not to preconceive deliberate strategies, but tomanage the process of strategic learning, whereby novel strategies can emerge.Ultimately, then, strategic management involves crafting the subtle relationshipsbetween thought and action, control and learning, stability and change.

Accordingly, strategies appear first as patterns out of the past, only later, perhaps, as plans for the future, and ultimately, as perspectives to guide overall behavior.



The Power School The Power School

What are you bringing to the tableWhat are you bringing to the table



The Environmental School The Environmental School




Adaptive pressures

Struggle for existence Survival of the fittest

Environment -- Structure



The Environmental School

The environment, presenting itself to theorganization as a set of general forces, is the central actor in the strategyµ making process.

The organization must respond to these forces, or

else be "selected out.³ Leadership thus becomes a passive element for

purposes of reading the environment and ensuring proper adaptation by the organization.

Organizations end up clustering together in distinct

ecologicalµ type niches, positions where they remainuntil resources become scarce or conditions toohostile. Then they die.



The Cultural School The Cultural School




What is culture?

Material and non-material

Insulation«

Organization's mind

Culture is inimitable

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Strategy formation is a process of social interaction, based on the beliefs and understandings shared by the members of an organization.

An individual acquires these beliefs through a process of acculturation, or socialization, which is largely tacit and nonverbal, although sometimesreinforced by more formal indoctrination.

The members of an organization can, therefore, only partially describe thebeliefs that underpin their culture, while the origins and explanations may remainobscure.

As a result, strategy takes the form of perspective above all, more than positions, rooted in collective intentions (not necessarily explicated) and reflected in the patterns by which the deeply embedded resources, or capabilities, of the organization are protected and used for competitive

advantage. Strategy is therefore best described as deliberate (even if not fully conscious).

Culture and especially ideology do not encourage strategic change so much asthe perpetuation of existing strategy; at best, they tend to promote shifts in position within the organization's overall strategic perspective.



The Configuration School The Configuration School

Stable configurations

Quantum upheavals Change

Stable configuration

Freeze ± Unfreeze -- Freeze



Many Thanks!Many Thanks!

Questions please«.? Questions please«.?

schools of strategy (2)

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