Vous êtes sur la page 1sur 18

Strat.

Change 23: 6380 (2014)


Published online in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/jsc.1960

RESEARCH ARTICLE

Management Use of Strategic Tools for Innovating


During Turbulent Times1
Rana Tassabehji
University of Bradford School of Management, UK

Andrew Isherwood
Pico Digital Inc., San Diego, CA, USA

As business environments become


more turbulent, strategic
frameworks and tools have
emerged to foster innovative blue
oceans, new markets, and
disruptive technologies in order
for organizations to survive and
thrive.
Management education and
managerial role influence the type
of strategic tools used, but there
is no real difference between
country and business sector in
which the managers operate.

hile managers use a variety of tools, they overwhelmingly continue to use those
that are well established and focus on the management of internal and

external resources, whereas tools aimed to foster more innovative, dynamic, and blue
ocean strategies are not widely applied in practice.

Introduction
The term strategy has become prevalent in both public and private sectors and a
large number of definitions abound (Zegveld, 2006; Gunn and Williams, 2007).
The literature on strategic management provides a number of different perspectives
and assumptions, with increasing attempts to define what strategy is and where it
comes from esoteric debates that are often impenetrable and largely irrelevant
to practitioners.
In a review of articles published over 40 years, Cummings and Daellenback
(2009) find, among other things, that strategy is about balancing the understanding of external environment and internal practices and about processes and practices. The practice of strategic planning is reported to have suffered a decline,
losing popularity in the 1970s due to the inability of strategic planning tools to
deliver on their promise (Glaister and Falshaw, 1999). This observed decline is
something that Cummings and Daellenback (2009) attribute to a change in terminologies resulting from their analysis of words used in article abstracts, where
the word planning hands over primacy to the word strategy (p. 245), rather than
proof of a decline in the actual practice of strategic planning. According to Glaister
and Falshaw (1999), there was a revival of strategic planning in the 1990s due to
the emergence of the resource-based view of strategy, providing firms with practical
strategic advice on improving performance through resource management. Despite

JEL classification codes: D81, G24, L26, O32.

Copyright 2014 John Wiley & Sons, Ltd.


Strategic Change: Briefings in Entrepreneurial Finance

Strategic Change
DOI: 10.1002/jsc.1960

64

Rana Tassabehji and Andrew Isherwood

this, there remains a dearth of research on the use of


strategic tools by organizations, as highlighted by Clark
(1997) and a decade later by Gunn and Williams (2007),
where both examine organizational use of strategic management tools the former in a UK/New Zealand comparative study and the latter in the UK alone.
As traditional tools appear to be struggling to satisfy
the need for rigor by investors, there is an increasing call
for new tools and theories to evaluate new ventures and
innovations. The aim of this article is to review the current
use of strategic tools by managers, to assess whether new
strategic tools are being adopted to cope with the changing environment. In addition, using partial least squares
(PLS) structural equation modeling, we tested for relationships between manager demographics (specifically,
management education, country, and business sector) and
category of strategic tools used, to better understand the
current use of strategic tools.

New and established strategic tools


As globalization facilitated by Internet technology platforms and e-business models invites more competitors to
enter the market, more and more organizations are on the
lookout for new markets and new innovative products to
sustain growth and address increasingly diverse consumer
needs. A study by Brews and Purohit (2007) shows that
as environmental instability increases so does planning.
This type of planning is more multi-dimensional, incorporating incremental rather than formal planning and
generative planning, which represents the degree to which
plans encourage innovation and the degree to which plans
encourage internal process innovation. Kim and Mauborgne (2005) introduced the concept of a blue ocean
strategy (BOS), where the dynamic creation of blue ocean
market spaces chimed with Christensens ideas and concepts of disruption and innovation. The successful implementation of BOS has been demonstrated qualitatively in
a depth case study of a company (Kim et al., 2008), and
quantitatively in a survey of 568 companies in Finland

Copyright 2014 John Wiley & Sons, Ltd.

utilizing BOS to transform their business models: an


advantage in the profitable growth of their sales activities
(Aspara et al., 2008). More recently, Burke et al. (2009)
found Dutch companies in the retail industry that had
used BOS were more likely to be successful in the long
term, although in the short term they favored competitive
strategies. The other main finding of this research was to
recognize that companies used both blue ocean and competitive strategies to succeed.
Kim and Mauborgne (2009) coined the term reconstructionist, referring to the growing body of research
(theories and tools) for strategy that attempts to reconstruct the market into blue oceans to capitalize on disruption and innovation, replacing competitive advantage
with value innovation as the primary goal of firms. This
is in contrast to the traditional notions of structuralists,
such as Michael Porter, who base their views of strategy
on economic concepts where competition is avoided by
creating sustainable advantage from unique resources
(Burke et al., 2009, 2010). The reconstructionist approach
has had criticisms leveled against it for lacking detailed
empirical statistical evidence and being based on post-hoc
rationalized case studies, raising questions about the
generalizability of the BOS (Burk et al., 2009).
There are a plethora of strategy tools and theories
available to support managers in developing their organizations direction. However, there is no definitive summary
of strategic management tools available in the literature
(Clark, 1997). The most widely known strategy tools
taken from strategic management textbooks and papers
(Bowman and Faulkner, 1997; Collis and Montgomery,
2005; Gunn and Williams, 2007; Johnson et al., 2008;
De Wit and Meyer, 2010) are summarized in Table 1 and
are used for the empirical part of this study. These rely
largely on existing markets and competing within them,
and are focused on developing a suitable strategy to maximize stakeholder value with the aim of looking at the
environment and organization and positioning/repositioning the organization within that competitive environment. However, there is an inherent problem with these

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

65

Table 1. Summary and definition of common strategy tools

Description
SWOT
analysis

PEST (or
PESTEL)
Ansoff matrix
Porters five
forces
Game theory
Scenario
planning
Value chain
analysis
Mission and
vision
statements
The cultural
web
Strategic clock
BCG matrix
(Boston
Consulting
Group)
Financial
forecasting

Used to document the organizational strengths, weaknesses, opportunities, and threats in a 4 4


matrix.
SWOT generally creates many meaningless lists of bullet points which are not actually used in further
strategy formulization. Pickton and Wright (1998) argue that it is the group discussion that is
involved in SWOT, and prioritizing the issues identified is where the real value of SWOT lies.
Used to document the external environment and categorized into: political, economic, social,
technological, environmental, and legal. Again a useful tool for focusing the group mind while
brainstorming; has real value when issues are prioritized and actioned.
Used to communicate strategic direction, either new product or market development or both
(diversification).
This tool provides a way of analyzing an existing industry and its competition based on five forces:
bargaining power of suppliers, bargaining power of customers, threat of new entrants, threat of
substitute products, and competitive rivalry within an industry.
Tool used to predict what a competitor is likely to do as a result of what you plan to do; therefore, you
change your initial move to make the outcome more favorable.
Create different scenarios to compare and contrast possible options.
Analyze the chain of events that convert the raw materials into products or services from a financial
perspective to be able to optimize the process or identify opportunities for greater profit.
Statements used to communicate the strategy to stakeholders:
Vision statement where the organization wants to be in the future, e.g. the biggest car manufacturer
in the world.
Mission statement short-term targets to make the vision come true, e.g. take 30% of the small car
market.
A tool used in documenting and analyzing the culture of an organization.
Offers some generic strategies based on a price and added-value matrix.
Tool for analyzing product portfolios plotted against market growth and market share.

Financial predictions and plans of how much a product costs and how much it can be sold for and
hence the profit.

tools when applied in the context of creating a new


venture, as the data required to make these tools accurate
or believable is simply not available and thus they are
ineffective for markets that have not yet been created
(Kim and Mauborgne, 2005).
While Porter (2001) reinforces the validity and relevance of his strategic tools in the digital age, arguing that
his five-forces and generic competitive strategies are still
very relevant and applicable, for markets that do not exist
there is little supplier power, no rivalry, no buyer power,
probably lots of barriers to entry, and threats of substitu-

Copyright 2014 John Wiley & Sons, Ltd.

tion. In response to Porter, Tapscott (2001) argues that a


new way of thinking is required to incorporate not only
the organizations and industry structures that Porter and
similar strategists advocate, but also the infrastructure for
wealth creation itself incorporating new business models,
new sources of value, and new governance structures for
the new digitally networked markets.
Work by Bowen and Faulkner (1996) has attempted
to extend Porters generic competitive strategies, presenting a hybrid model named the strategic clock
which concentrates on price vs. value. In reality, few

Strategic Change
DOI: 10.1002/jsc

66

Rana Tassabehji and Andrew Isherwood

organizations follow a generic strategy as business is much


more complex in practice and a hybrid model is the norm,
especially in markets of strong competition (Reitsperger
et al., 1993; Brews and Purohit, 2007). Kim and Mauborgne (2005) believe that these types of tool do not help the
strategist come up with new creative ideas, rather they
advocate that by creating a unique hybrid strategy an
organization is differentiating itself from any competition
while at the same time reducing its costs (not necessarily
price) and hence direct competition is reduced. Their
BOS proposes a method of deciding on a specific hybrid
strategy individually tailored to the organization and
potential market, ideal for todays hypercompetitive environment and globalization.
There are many critics of the hybrid approach, and
one study of over 2300 businesses found that strategic
purity has a significant positive impact on performance
(Thornhill and White, 2007). Critics of BOS cite a lack
of validity and selection bias, where success stories are
only identified in retrospect (Venkat, 2007; TRU Group,
nd). However, as with all new strategic approaches, it will
take time to amass a body of empirical evidence to measure
and evaluate criteria of success from the initial application
of the BOS tools in organizations. Early evidence suggests
that these tools are helpful to managers and these tools
are included in our study to evaluate their use by
managers.

Classifying strategic tools


In order to better understand how strategic tools are positioned to cope with innovation and new markets, there is
a need to classify them according to their potential impact.
There have been some attempts to empirically classify
strategic tools, however, these studies have tended to be a
secondary part of strategic planning process research
(Clark, 1997). There are some studies that have profiled
a sample of strategy tools as a guide for managers (Prescott
and Grant, 1988; Webster et al., 1989). More recently,
Gunn and Williams (2007) classified the use of strategic

Copyright 2014 John Wiley & Sons, Ltd.

tools according to whether managers were academically


trained, professionally or applied trained, stakeholder
aware, or competitor aware. They found that academically
trained managers used tools heavily reliant on theoretical
frameworks (e.g., McKinsey, Porter (value chain and five
forces)); professionally trained managers used tools mainly
associated with industry (e.g., SWOT, balanced score
card, core competence); stakeholder-aware managers used
tools such as stakeholder mapping and analysis tools
closely related to understanding organizational value
systems; finally, competitor-aware managers used tools
synonymous with private-sector organizations in competitive environments (e.g., competitor analysis, successfactor analysis). These findings are slightly contentious in
that the categorizations do not fall into exclusive conceptual approaches, as theories exist for all four categories.
Furthermore, rather than be seen as relating to a specific
type of management training, all these approaches are
included in the majority of business school curricula at
both undergraduate and postgraduate level. Nevertheless,
that a relationship has been found to exist between the
educational background of respondents and their use of
strategic tools will be included in the research model
developed in this study.
Hypothesis H1: Educational background impacts use of
strategic tools by managers.
Clark (1997) categorizes strategic tools according to managerial tasks and use within strategic planning phases.
For instance, phase 1 organizational analysis (including
resources), environmental analysis (operating and remote);
phase 2 strategic analysis; and phase 3 strategic implementation. The SWOT analysis was found to have a dominant
role in the first phase and was applied across a number of
other strategic tasks, however, multiple tools were also
found to be applied for each strategic task. This forms the
basis of
Hypothesis H2: Managerial task/role impacts use of
strategic tools by managers.

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

Hypothesis H3: Country of business impacts use of


strategic tools by managers.
We will also explore the impact of business sector on the
use of strategic tools by managers and expect there to be
a difference.
Hypothesis H4: Business sector impacts the use of
strategic tools by managers.
Neither of the approaches by Clark (1997) or Gunn and
Williams (2007) addresses the classification of groups of
strategic tools based on their use for innovation or a
new environment. However, Brews and Purohit (2007)
identified four dimensions of strategic planning and evaluated the impact of environmental instability on each.
The first dimension, symbolic planning, relates to the
mission and purpose of the organization, providing it
with a sense of profound destiny. Rational planning
(operational implementation control) is a deliberate and
linear planning process which facilitates precision in organizations by providing an ability to tightly integrate business operations with detailed attention to objectives,
operational plans, and budgets, providing structure and
control. Transactive planning incorporates the ability to
adapt and modify plans through incremental adjustment,
according to circumstances, thus promoting organizational learning and remedying shortcomings of preordained, inflexible, formal planning. Generative planning,
which nurtures innovation, is the dynamic capability
which enables organizations to create, integrate, combine,
and shed resources through nonlinear ideas. Although
there is no discussion of any direct association with strategic tools that enable the respective planning dimension,
these categories are useful in this study for providing a
framework to evaluate the potential outcomes of applying
strategic tools.

Copyright 2014 John Wiley & Sons, Ltd.

In addition to Brews and Purohits planning dimensions, we build on the work of Zegveld (2006), who
identifies four generic models of strategic management
based on three reference points external, internal, and
time (static/dynamic) which he superimposes on the
original strategy frameworks of the industrial organizations school and the resource-based school. The internal
reference point considers internal variables used to define
the success of an organization, while the external reference
points use external benchmarks such as competitors, suppliers, and customers. The use of time as a reference point
stresses the impact of adaptation or learning, where game
theory and dynamic capabilities can be considered to be
strategic frameworks that are dynamic versions of the
industrial organization and resource school, respectively.
Figure 1 illustrates the four main generic models of strategic management adapted from Zegveld (2006), and
incorporates the four dimensions of strategic planning
(Brews and Purohit, 2007).
Industry-based strategic management is directly
related to industrial organization theory influenced by the
Michael Porter school of thought. The focus is on external
competition between firms and industry attractiveness.
With industry-based strategic management, technology

Symbolic Planning
Rational Planning

Generative Planning
Transactive Planning

External

Strategic Focus

Clarks study also highlighted notable country-specific differences in the use of tools and this relationship between
country and usage of tools will be explored here.

67

Industry based strategic


management

Game theory

Dynamic capabilities

Resource based
strategic management
Internal
Static

Dynamic

TIME

Figure 1. Generic models of strategic management and


planning.

Strategic Change
DOI: 10.1002/jsc

68

Rana Tassabehji and Andrew Isherwood

itself is not a determinant of a successful strategy, but


rather it influences the attractiveness of an industry or the
firms position within that industry (Zegveld, 2006). The
time status is largely static, as the analysis is of the environment as it currently stands.
Resource-based strategic management is built on the
concept of core competencies (Hamel and Prahalad,
1993), where firm-specific factors are the major determinants of performance. The resource-based view of the firm
forms the foundation of this strategic approach and incorporates an inside-out orientation, where strategic intent is
developed from the organizations capacity to leverage its
resources (core competencies and core products), to be
able to compete for the future by creating new competitive spaces (Zegveld, 2006).
The resource-based and industry-based strategic management models would largely fall into the dimensions of
symbolic and rational planning, as these clearly have highlevel vision/missions with specific and detailed goals and
action plans/programs linked to organizational outcomes
and behavior.
Game theory focuses on the external factors and how
these change dynamically. The concepts of game theory
provide a framework within which to formulate, structure, analyze, and understand different strategic scenarios
(Turocy and von Stengel, 2001). It is a process by which
a situation is formally modeled as a game and the decision
maker is required to enumerate explicitly the different
actors (players) and their strategic options, while also considering their preferences and reactions, with the ultimate
goal of improving strategic decision making (Turocy and
von Stengel, 2001).
Dynamic capabilities focus on the development of
skills within the organization in order to enable the organization to adapt and respond to changing environments
(Zegveld, 2006). They are considered to follow the
resource perspective, with a dynamic element relating to
the organizations ability to integrate, build, and reconfigure internal and external competencies on an ongoing,
progressive basis over time (Zegveld, 2006).

Copyright 2014 John Wiley & Sons, Ltd.

Game theory and dynamic capabilities management


models fall within the dimensions of transactive and generative planning, which enable organizational learning
and incremental adjustment based on unknown factors in
the environment. These are critical for management in
turbulent environments.
The categories identified here and illustrated in
Figure 1 will be used as the conceptual foundations upon
which the data collected in this study will be analyzed in
the next section.

Research method
The research method applied was a quantitative survey of
managers use of strategic tools. For this, an online survey
was conducted and 458 responses received. The analysis
of this data is split into two parts. The first part is to
categorize the strategic planning tools using factor analysis. The second part is to test the impact of respondent
demographics on the use of each of the categories of strategic planning tools (identified as H1H4) using a PLS
structural equation modeling technique. Specifically, the
demographics include management educational background (H1), major responsibilities within their role
(H2), and the country (H3) and business sector (H4) in
which the manager is operating. It is expected that these
demographics will have an effect on the different kinds of
strategic tool and the model in Figure 2 illustrates these
hypothesized relationships.
Survey methodology
One of the authors is chief technologist at a leading telecommunications company, responsible for both technology and business innovation including development of
new start-up business units within the telecommunications sector. As such, he is a member of a leading global
business-oriented networking site and participates in
20 professional groups on this networking site. These
groups are organized around specific technology interests
within the telecommunications sector and mainly discuss

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

Educational
Background
H1a-d

Management
Task/Role
H2a-d

Business
Sector

Country of
Work

H4a-d

H3a-d

FOUR CATEGORIES OF STRATEGY TOOLS*

(a)

(b)

(c)

(d)

69

particular profession or sector, and non-random factors


associated with the samples composition could introduce
factors inconsistent with easy generalizability, this method
facilitated the attainment of a sample of sufficient size and
diversity for the studys purposes (Geringer et al., 2002),
which were to understand what strategic tools managers
in the field of innovation are currently using and analyze
them accordingly.

Results

* H1-H4 is expected to have an impact on each of the four categories of strategy tools (a-d)

Figure 2. Model for managers use of strategic tools.

innovation within this area. The members of these groups


are generally senior managers, sales/business development
directors, or senior engineers with a customer/strategic
focus. An online questionnaire was developed and distributed by e-mail through this business networking site and
additional individuals were also selected from the authors
professional contact database. The total population was
2000 professionals that fitted the profile of managers and
decision makers across a number of industry sectors and
geographical boundaries. Each practitioner was sent an
e-mail with a request to complete the questionnaire and
an offer of a summary of the study once it had been completed. Moreover, the respondents were promised anonymity and non-attribution of responses.
The pre-qualification process based upon seniority
ensured the individuals participating had the appropriate
knowledge and information to provide useful ideas and
insights and is invaluable in ensuring a good final questionnaire (Remenyi et al., 1998). It was felt that these
potential respondents were appropriate because such networks have been found to attract individuals with a high
provision of collective knowledge in an area of interest to
them (Contractor and Monge, 2002) in this case strategy and innovation management. Although the respondents in the study might not be representative of any

Copyright 2014 John Wiley & Sons, Ltd.

Descriptive analysis: Respondents


The online survey was live for two weeks and a total of
498 responses were collected, of which 458 were usable,
providing a response rate of 23%. The respondents were
from 47 different countries. 73% were from Europe, 15%
from North America, and the remaining 12% from the
rest of the world. Over half of the sample (58%) consisted
of managers from engineering sectors (telecoms, IT, engineering, manufacturing), with over a third from the services sector (mainly media, and to a much lesser extent
education, consulting, health, and finance). Over a quarter
of the managers (26%) considered strategy to be the main
responsibility in their current role, while the others had
functional responsibilities such as engineering, sales/purchasing, and operations. These respondent demographics
are summarized in Table 2.
Educational background specifically queried whether
the respondents had any management training and the
level of management training, for example college (post16 further education), bachelors degree, MBA, other
Masters, doctorate level. Of the respondents, 67% did not
hold a management qualification, and of these 23% indicated that strategy was the main responsibility of their
role. About 40% of respondents with responsibility for
strategy had management qualifications, which is a similar
proportion observed in all other categories except engineers, where only 14% had any management qualifications. Of those that did have management qualifications,

Strategic Change
DOI: 10.1002/jsc

70

Rana Tassabehji and Andrew Isherwood

Table 2. Respondent demographics

Main responsibility in current role

Sector

Engineering
Strategy
Sales/purchasing
Operations
General line management
Finance
Other

31%
26%
16%
13%
7%
1%
6%

Media
Manufacturing
IT
Telecommunications
Engineering
Education
Consulting
Health
Retail
Finance
Other

23%
23%
15%
11%
8.5%
3.5%
3%
2%
2%
1.5%
7.5%

73%

North America
USA
Canada

15%

Geographic location
European Union
UK
France
Germany
Netherlands
Belgium
Denmark
Finland
Italy
Switzerland
Norway
Spain
Rest of EU

50%
3.5%
3%
3%
2%
2%
1%
1%
1%
1%
1%
4.5%

58% had MBAs, 23% had other management Masters


degrees, and 17% had management bachelor degrees (see
Figure 3).
When asked whether respondents found management
theory useful, 94% found that management theory was
useful. Of those 6% that thought it was unhelpful in
practice, all of them came from Europe or North America
and further investigations showed the respondents from
the UK (13) and USA (8) were the majority, with some
also from France (3), Italy (1), and Belgium (1). It could
be that respondents from the UK and the USA are more
culturally independent, challenging theoretical work
based on their practical experience, and nearly half (12)
of these respondents were engineers who might also be
more dismissive or skeptical of social science management
theory.

Copyright 2014 John Wiley & Sons, Ltd.

Rest of the world


India
Israel
Nigeria
South Africa
Brazil
Pakistan
Others

12%
3%
4%
1%
1%
1%
0.5%
0.5%
4%

12%

Descriptive analysis: Strategy tool use


Of the list of 14 strategy tools, SWOT analysis was the
most used tool followed by financial forecasting, mission/
vision statement, scenario planning, and value chain
analysis. Then, Porters five forces, PESTL, BCG, and
ANSOFF were used to a lesser extent. The least popular
were strategic canvas and strategic clock. Game theory was
the least used tool, followed by cultural web, value chain
analysis, and scenario planning. Strategic clock was the
least known and least used tool, followed by strategic
canvas, BOS, and ANSOFF (see Table 3 and Figure 4
for more details).
About 60% of respondents had not heard of BOS.
However, among the remaining 40% of respondents who
had heard of it, only 20% could apply BOS within their
current job. Having a management qualification makes it

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

71

Figure 3. Management education level of respondents by role.

Table 3. Frequency of strategic tools by managers

Strategic tool
SWOT
Financial forecasting
Mission/vision statement
Scenario planning
Value chain analysis
Five forces
PESTL

Copyright 2014 John Wiley & Sons, Ltd.

Frequency
of use (%)

Strategic tool

Frequency
of use (%)

75.8
68.6
68.1
52.2
45.4
28.8
26.6

BCG
ANSOFF
BOS
Game theory
Cultural web
Strategic canvas
Strategic clock

26.4
21.4
20.5
17.9
14.2
11.8
8.7

Strategic Change
DOI: 10.1002/jsc

72

Rana Tassabehji and Andrew Isherwood

Figure 4. Knowledge and use of management tools.

more likely to have heard of BOS. In fact, 58% who had


management qualifications knew about BOS, compared
with only 31% with no qualifications. Only 4% of people
who had heard of BOS think it is unhelpful in practice.
When looking at the data it can be seen that on
average, across all the questions, 56% of people who know
about the tools have some management qualifications,
however 86% of people who do not know the tools have
no management qualifications. Likewise, on average, of
those with no managerial qualifications 50% are likely to
know the tools, however with managerial qualifications
this increases to an average of 81%.
This may be obvious; it infers that holding management qualifications means a manager is more likely to
know about the tools. Those with an engineering responsibility in their role tended to use these tools the least
(42%), whereas 58% of those with strategic responsibility
used the tools. Interestingly, line managers tended to use
strategic tools slightly more than strategic managers
(60%), compared with managers in finance who were the

Copyright 2014 John Wiley & Sons, Ltd.

highest percentage users of strategy tools at 68%. However,


there were only a small number of financial managers (6
respondents), making this finding interesting but not very
reliable.
Categorizing strategy tools: Factor analysis
In order to categorize the strategy tools used by managers,
factor analysis was used. This technique has become one
of the most widely used techniques in psychological
research and is important in investigations of human
behavior (Treiblmaier and Filzmoser, 2010). The major
objective of factor analysis is to reduce a number of
observed variables into fewer factors to identify any hidden
structures and enhance interpretability.
The list of strategy tools summarized in Table 1 was
compiled from various strategy texts and papers (Bowman
and Faulkner, 1997; Collis and Montgomery, 2005; Gunn
and Williams, 2007; Johnson et al., 2008; De Wit and
Meyer, 2010) and also included two additional strategy
tools, namely BOS and strategic canvas, a tool which

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

73

variables loading substantially onto a respective component. The interpretation of the four components is found
to be consistent with the four categories of generic models
of strategic management and planning illustrated in
Figure 1, namely industry-based, resource-based, game
theory, and dynamic capabilities.
Resource-based strategic management focuses on
company-based vision and strategic intent with tools such
as SWOT, financial forecasting, mission/vision statement,
scenario planning, and value chain analysis which are
related to internal strategic focus and are largely static.
Industry-based strategic management focuses on an
industry-based vision and competitive analysis with tools
such as PESTL, ANSOFF, five forces, and BCG which
are related to external strategic focus and are largely static.
Game theory deals with competitive strategy and interaction strategy and here the only strategic tool that fits this
category from our list of tools is game theory itself, which

facilitates the generation of BOS, making a total of 14


strategy tools. To test the data for factor analysis eligibility,
the correlation matrix showed the majority of coefficients
above 0.3, indicating their suitability for factor analysis.
Bartletts test of sphericity was statistically significant, and
the KaiserMeyerOlkin value was 0.881 which exceeded
the recommended value of 0.6 (Pallant, 2007; Treiblmaier
and Filzmoser, 2010), supporting the factorability of the
data.
A principal component analysis (PCA) with varimax
rotation and Kaiser normalization was conducted on these
14 strategy tools using SPSS version 18, which is becoming the standard approach within management research
(Gunn and Williams, 2007). Four groupings in terms of
strategy tools use were identified from the data and are
summarized in Table 4. The four factors that emerged
accounted for 64% of the total data variance, and all
components showed a number of strong loadings, with all

Table 4. Factor analysis rotated component matrix and KMO Barletts test

Strategy tools

Component
1

PESTL
ANSOFF
Five forces
BCG
SWOT
Scenario planning
Value chain
Mission vision
Financial forecasting
Cultural web
Strategic clock
Strategic canvas
BOS
Game theory

0.829
0.841
0.761
0.706
0.437

0.350

0.613
0.712
0.673
0.704
0.780

0.366

0.331
0.376

0.727
0.774
0.668
0.484
0.815

KMO and Bartletts test


KaiserMeyerOlkin measure of sampling adequacy
Bartletts test of sphericity
Approx. chi-square
D.f.
Sig.

Copyright 2014 John Wiley & Sons, Ltd.

0.881
2330.335
91
.000

Strategic Change
DOI: 10.1002/jsc

74

Rana Tassabehji and Andrew Isherwood

Table 5. Strategy categories and related strategic tools

Generic model category

Subject of analyses

Strategic tools/instruments

Resource-based strategic
management

Company-based vision

Industry-based strategic
management

Industry-based vision

Game theory

Competitive strategy
Interaction strategy
Organizational learning

SWOT
Financial forecasting
Mission/vision statement
Scenario planning
Value chain analysis
Five forces
PESTL
BCG
Ansoff
Game theory

75.8
68.6
68.1
52.2
45.4
28.8
26.6
26.4
21.4
17.9

BOS
Cultural web
Strategic canvas
Strategic clock

20.5
14.2
11.8
8.7

Dynamic capabilities

Strategic intent

Competitive analysis

Path dependencies

has a dynamic and external strategic focus. Dynamic capabilities relate to organizational learning and path dependencies within organizations with an internal strategic
focus and dynamic time scale; the strategic tools that fit
this category are cultural web, strategic clock, strategic
canvas, and BOS. Table 5 summarizes the categories,
subject of analyses, strategic instruments, and frequency
of use.
It can be seen that resource-based strategic management is the most frequently used group of strategic tools,
followed by industry-based strategic management to a
lesser extent, with game theory and dynamic capabilities
being the least used by managers.

The model
The conceptual model developed in Figure 2 was fitted
to the data using partial least squares (PLS) structural
equation modeling software SmartPLS2.0 (beta) (Ringle
and Alexander, 2005). The research hypotheses were
tested by PLS, as shown in Figure 5 and Table 6. PLS
was used because it is robust to non-normality data and
when the sample size is at least 10 times greater than the

Copyright 2014 John Wiley & Sons, Ltd.

Frequency of use (%)

number of items impacting the most substantial construct


in the model (Barclay et al., 1995; Chin, 1998; Wilcox,
1998). The hypotheses (H1H4) were tested using the
significance of corresponding path coefficients, and all the
tests for path coefficients were based on t-values calculated
using the bootstrap facility where a total of 1000 bootstrap re-samples were used.
The internal validity and reliability of the constructs
were demonstrated with factor analysis, where the variables loaded substantially onto the latent construct. Furthermore, internal consistency of the measures of strategy
tools categories demonstrated good internal validity
(Cronbachs alpha was 0.8616 for industry-based, 0.772
for resource-based, 0.7889 for dynamic capabilities, and
as game theory had only one item, this was 1).
The fitted model showed that the managers educational background impacts their use of all the categories
of strategy tools, thus confirming hypotheses H1ad. The
role of the manager was also found to impact use of the
categories of strategic tools, but there was a limited impact
of the role on different categories. The managers role was
found to have most impact on the use of industry-based
strategy tools (H2a, p < 0.001), followed to a lesser extent

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

by resource-based strategy tools (H2b, p < 0.005), but no


impact on dynamic capabilities (H2c) or game theory
strategy tools (H2d). Country was found to have no
impact on the category of strategic tools used by managers
(H3ad) and neither was business sector (H4ad).

Figure 5. Fitted structural equation model. n.s. = not


significant. *Significant at p < 0.001. **Significant at
p < 0.005.

75

The R2 values which indicate the variability in use of


each of the categories of strategy tools resulting from the
four variables (country of work, educational background,
business sector, and management task/role) are relatively
low, ranging from 4% for game theory strategy tools to
7% for industry-based strategy tools, 11% for resourcebased strategy tools, and 16% for dynamic capabilities
strategy tools. This indicates that there are other factors
which impact use of strategic tools by managers, which is
unsurprising, expected, and typical of planning research
(Brews and Purohit, 2007) where other factors such as
organizational policy, organizational culture, environmental instability, and firm performance all might have an
impact and these are not captured in this study. However,
it is important information that there is a significant
relationship (p < 0.005 and p < 0.001) between management educational background and the use of strategy tools
and also management task/role in the use of industrybased strategy tools and, to a lesser extent, resource-based
strategy tools regardless of how much variance they
explain.

Table 6. Standardized path coefficients, bootstrap mean, standard error, and t-values

H1a Education Industry-based


H1b Education Resource-based
H1c Education Game theory
H1d Education Dynamic capabilities
H2a Role Industry-based
H2b Role Resource-based
H2c Role Game theory
H2d Role Dynamic capabilities
H3a Country Industry-based
H3b Country Resource-based
H3c Country Game theory
H3d Country Dynamic capabilities
H4a Sector Industry-based
H4b Sector Resource-based
H4c Sector Game theory
H4d Sector Dynamic capabilities

path
coefficient

Standard
deviation

Standard
error

t-Statistics

0.3146
0.3129
0.1774
0.2213
0.2062
0.1278
0.0335
0.1067
0.0794
0.0451
0.0838
0.0206
0.1069
0.0083
0.0279
0.111

0.0424
0.0308
0.0461
0.0468
0.0447
0.0452
0.0441
0.0449
0.0453
0.0479
0.0437
0.0386
0.0401
0.0449
0.0401
0.05

0.0424
0.0308
0.0461
0.0468
0.0447
0.0452
0.0441
0.0449
0.0453
0.0479
0.0437
0.0386
0.0401
0.0449
0.0401
0.05

7.3641*
10.0769*
3.8356*
4.6421*
4.7067*
2.9194**
0.7636
2.3769
1.7821
0.9911
1.8891
0.5454
2.6661
0.1838
0.6955
2.2207

Accept/reject
hypothesis
Accept
Accept
Accept
Accept
Accept
Accept
Reject
Reject
Reject
Reject
Reject
Reject
Reject
Reject
Reject
Reject

* Significant at p < 0.001. ** Significant at p < 0.005.

Copyright 2014 John Wiley & Sons, Ltd.

Strategic Change
DOI: 10.1002/jsc

76

Rana Tassabehji and Andrew Isherwood

Discussion and implications for managers


With the emergent body of literature focusing on strategy,
innovation, and different strategic approaches for managing in turbulent times, the major aims of this study were
twofold. Firstly, to consolidate and categorize strategic
tools into a framework which incorporated four major
perspectives on corporate strategy and planning approaches
and secondly, to identify demographic factors that impact
managers use of the respective category of strategy planning tools.
By consolidating several theoretical approaches, a
framework is developed to categorize strategic tools into
(i) four generic models of strategy management based on
dimensions of strategic focus and time (Zegveld, 2006);
(ii) four dimensions of strategic planning (Brews and
Purohit, 2007); (iii) tools used within a structuralist or
reconstructionist theoretical approach. This framework is
purposely multi-dimensional to reflect the complex nature
of the environment in which organizations operate. Furthermore, strategic tools are not used in isolation and their
impact is not an absolute, thus by putting them into a
multi-dimensional context their potential contribution to
organizational objectives can be more clearly assessed by
managers. The final consolidated framework is presented
in Figure 6.

Structuralist Approach

Reconstructionist Approach

Generative Planning
Transactive Planning

Symbolic Planning
Rational Planning
Industry based strategic
management

Strategic Focus

External

Internal

Game theory

PESTL
ANSOFF
FiveForces
BCG

GameTheory

Resource based strategic


management
SWOT
ScenarioPlanning
ValueChain
MissionVision
FinancialForecasting

Dynamic capabilities
CulturalWeb
StrategicClock
StratCanvas
BOS

Static

TIME

Dynamic

Figure 6. Categorized strategy tools (CaST) framework.

Copyright 2014 John Wiley & Sons, Ltd.

In practice, managers most frequently use the traditional structuralist strategy tools which can be seen to
focus on symbolic and rational planning dimensions,
where symbolic planning develops high-level visions/missions and rational planning results in more specific and
detailed goals, action plans, and outcomes. Their contextual application is largely static, with a strategic focus
primarily on internal resource-based strategic management and to a lesser extent external industry-based strategic management. This kind of strategic planning
obviously remains highly relevant for managers operating
in a turbulent environment, confirming previous research
(Brews and Purohit, 2007).
The findings further show that the reconstructionist
strategy tools, which can be seen to focus on transactive
planning (that is iterative and amenable to ongoing incremental adjustment) and generative planning (that stimulates innovation), are less frequently used by managers but
appear to be in use by at least 1 in 10 of respondents.
While 40% of respondents had heard of BOS, only 4%
of these considered it to be unhelpful in practice, suggesting that BOS must feel right to practicing managers,
which was the original intention of Kim and Mauborgne
(2005) in their aims for BOS. However, this is not the
same as proving that the tools actually work, which is one
of the major criticisms of BOS (Kim et al., 2008; Aspara
et al., 2008; Burke et al., 2009). Although the reconstructionist approach has not gained universal and mainstream
academic adoption because of these limitations, they are
to a certain extent being used in practice and more so by
those with formal management qualifications. This further
suggests that publications from the likes of Kim and
Mauborgne and the Harvard Business Review are being
read and applied by practitioners.
It appears from the findings that the simpler the tool
the more the respondents used them. This could potentially be due to either limited time of managers (more
difficult tools take longer to work through) or a difficulty
in communicating more complex tools to senior management who may not understand them. The use of tools by

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

managers in this case is to justify the strategy rather than


to generate it in the first place. These are some of the
founding principles of Kim and Mauborgnes (2005)
work, to try and create simple tools that can be easily
communicated. Criticism of the reconstructionist
approach about proving that tools work also appears
to be confirmed in practice, as the tools which help
the manager simplify and communicate their strategy
(symbolic and rational planning and resource-based
and industry-based strategic management) are almost
universally (96%) adopted.
That educational background impacts use of strategy
tools, although somewhat obvious, is insightful, as it indicates that ongoing management training/learning is of
value to organizations and is being applied in practice.
The main responsibility within the management task/
role of the manager was found to impact use of strategic
tools for only two of the categories of strategy
tools industry-based and resource-based. This suggests
that Kim and Mauborgne (2005) might be correct in their
identification of the difficulty of communicating new and
more dynamic strategies to senior managers. The reconstructionist dynamic strategic tools are not well established and cannot show demonstrable success unlike
the more established static tools such as Porters five forces,
ANSOFF, and SWOT which have a substantial proven
record and near ubiquitous application, where the information required to drive the tools is available or can be
obtained. With the reconstructionist approach the information is incomplete as it simply does not exist at that
current moment in time and hence these strategy
tools underpinning an innovative, dynamic, iterative
process are not yet as well established and applied by
practitioners. Interestingly, those whose main role was
engineering were found not to use strategy tools as much
as those with strategy as their main role, but line managers
were found to use strategy tools most often. This could
suggest that, as line managers, they would potentially use
more tools to persuade their bosses that a course of action
is justified. The application of different approaches, strat-

Copyright 2014 John Wiley & Sons, Ltd.

77

egy models, and planning dimensions through the selection of strategy tools is not mutually exclusive and in fact
they co-exist in their use by managers.
Interestingly, neither the country in which the
manager works nor the business sector in which they
operate had an impact on the kinds of strategic tool they
used. This, however, could have been as a result of the
sample which was heavily biased toward the UK/USA/
Europe.
The categorized strategy tools (CaST) framework
developed from this study, provides managers with a sense
of what the tools can do and how they might contribute
to the overall organizational strategy. To be more dynamic
and focus on generative and transactive planning, there is
a need to utilize some of the tools in this category to
facilitate innovative strategies that are dynamic and both
internally and externally focused. The concentration of
managers who overwhelmingly use resource-based, and to
a lesser extent industry-based, strategic tools highlights
the potential dangers for effective management in a turbulent environment. According to Brews and Purohit
(2007), Mission/statements of strategic intent do more
harm than good . . . and symbolic planning is detrimental
to performance representing empty PR exercises or pious
platitudes. They stress the need for a balance of paradoxical or opposing forces for effective planning in the face of
unstable environments. The CaST framework will help
managers evaluate the tools they are using in the context
of different planning approaches to facilitate them in
getting the balance right.

Limitations and future work


While this study provides some insightful and valuable
findings, the limitations which exist in most empirical
studies must be acknowledged. Firstly, the nature of the
sample: while the size was relatively large and there was a
good response rate, the sample consisted of practitioners
who were enthusiastic about innovation and were members
of the online global networking site. Having said this,

Strategic Change
DOI: 10.1002/jsc

78

Rana Tassabehji and Andrew Isherwood

however, the global networking site has over 120 million


members across more than 200 countries, half of which
are outside the USA. Furthermore, more than 2 million
companies are members of this networking site and it
includes executives from all 2011 Fortune 500 companies.
This is the type of influential membership that the survey
was aimed at. However, the sample was strongly biased
toward the UK/USA and as such these findings are only
generalizable to this context. Furthermore, the list of strategic tools surveyed was not exhaustive and was limited
to the literature review as to which tools appeared to be
most popular. The number of questions in the survey was
also limited and although this was done deliberately to try
and encourage a higher response rate which was relatively successful (25%) more questions would have
provided more in-depth information, leading to recommendations for further work.
From a strategy tools usage perspective this article has
asked what tools are used; further research could be conducted into what strategic tools are used for communication, validation, or generation of innovative strategies.
Further research could investigate other factors that might
impact the use of strategic tools, including firm performance, firm size, centralization/decentralization, duration
of planning, and environmental instability. This would
give a more complete picture of the drivers for managers
use of strategic tools.

Conclusion
With globalization, intensifying competition, interconnected worlds and markets, and an increasingly unstable
environment, more and more organizations are seeking
new markets and new innovative products to sustain
growth and address rising consumer demand and diverse
needs. This study reviewed the use of strategy tools by
managers to better understand their actual practice and
application in the real world.
By conducting a review of the extant literature and
empirical studies, the main issues surrounding the use of

Copyright 2014 John Wiley & Sons, Ltd.

strategy tools have been consolidated and incorporated


into a multi-dimensional framework (CaST) that categorizes strategy tools based on factors of strategic management and planning. The CaST framework sheds light on
the potential impact of tools used by managers from the
perspective of organizational planning strategies and the
outcomes they can achieve. We also incorporate the theoretical concepts of reconstructionism and structuralism
introduced by Kim and Mauborgne, (2009) to highlight
the growing body of research capitalizing on disruption
and innovation, replacing traditional resource- and competition-based views of strategy.
Overall, our findings highlight the multi-dimensionality of strategic tools and the fact that currently managers
are largely using the category of tools that are based on a
traditional structuralist approach, and to a much lesser
extent tools that encourage and facilitate the development
of innovative markets, products, and processes incorporating the concept of blue oceans. While country of work
and business sector were not demonstrated here to have
an impact on the use of strategy tools by managers, the
main responsibility of the managers task/role did have a
limited impact (only on industry- and resource-based
tools); educational background was found to be a significant but not unique factor in the use of strategy tools. The
implication here is that management educators have a
direct impact on practitioners in their sphere of work and
as such there is a need to make sure that curricula also
incorporate and focus on diffusing and disseminating
strategies that focus more on generative/transitive strategic
planning and tools with dynamic internal and external
dimensions to facilitate innovation and management in
unstable environments for the twenty-first century.
References
Aspara J, Hietanen J, Parvinen P, Tikkanen H. 2008. An exploratory empirical verification of blue ocean strategies:
Findings from sales strategy. Paper presented at Eighth
International Business Research (IBR) Conference, March
2728, Dubai.

Strategic Change
DOI: 10.1002/jsc

Tools for Innovating During Turbulent Times

Barclay D, Higgins C, Thompson R. 1995. The partial least


squares (PLS) approach to causal modeling: Personal computer adoption and use as an illustration. Technology Studies
2(2): 285309.
Bowman C, Faulkner D. 1997. Competitive and Corporate
Strategy. Irwin: Chicago, IL.
Brews P, Purohit D. 2007. Strategic planning in unstable environments. Long Range Planning 20: 6483.
Burke AE, Van Stel AJ, Thurik R. 2009. Blue ocean versus
competitive strategy: Theory and evidence. ERIM Report
Series, Ref. No. ERS-2009-030-ORG. Available at: http://
ssrn.com/abstract=1417221.
Burke AE, Van Stel AJ, Thurik R. 2010. Blue ocean vs. five
forces. Harvard Business Review 88(5): 2829.
Chin WW. 1998. Issues and opinion on structural equation
modeling. MIS Quarterly 22(1): Commentary.
Clark DN. 1997. Strategic management tool usage: A comparative study. Strategic Change 6: 417427.

79

Hamel G, Prahalad CK. 1993. Strategy as stretch and leverage.


Harvard Business Review Mar/Apr: 7586.
Johnson G, Scholes K, Whittington R. 2008. Exploring Corporate Strategy, 8th edn. Prentice-Hall: Hemel Hempsted.
Kim WC, Mauborgne R. 2005. Value innovation: A leap into
the blue ocean. Journal of Business Strategy 26(4): 2228.
Kim WC, Mauborgne R. 2009. How strategy shapes structure.
Harvard Business Review 87(9): 7281.
Kim C, Hoon Yang K, Kim J. 2008. A strategy for third-party
logistics systems: A case analysis using the blue ocean strategy.
Omega: The International Journal of Management Science
36(4): 522534.
Pallant J. 2007. SPSS Survival Manual. McGraw-Hill:
Berkshire.
Pickton DW, Wright S. 1998. Whats SWOT in strategic
analysis? Strategic Change 7(2): 101109.
Porter ME. 2001. Strategy and the Internet. Harvard Business
Review 79(3): 6278.

Collis, DJ, Montgomery, CA. 2005. Corporate Strategy:


A Resource-Based Approach. 2nd ed. McGraw-Hill/Irwin:
Boston.

Prescott JE, Grant JH. 1988. A managers guide for evaluating


competitive analysis techniques. Interfaces 18: 1022.

Contractor NS, Monge PR. 2002. Managing knowledge


networks. Management Communication Quarterly 16:
249258.

Reitsperger WD, Daniel SJ, Tallman SB, Chismar WG. 1993.


Product quality and cost leadership: Compatible strategies?
Management International Review 33: 721.

Cummings S, Daellenbach U. 2009. A guide to the future of


strategy? The history of long range planning. Long Range Planning 42: 234263.

Remenyi D, Williams B, Money A, Swartz E. 1998. Doing


Research in Business Management: An Introduction to Process
and Method. Sage Publications: London.

De Wit B, Meyer R. 2010. Strategy Synthesis. Resolving strategy


paradoxes to create competitive advantage, 3rd edn. Cengage
Learning: London.

Ringle CMW, Alexander SW. 2005. SmartPLS (2.03), University of Hamburg. Available at: http://www.smartpls.de.

Geringer JM, Frayne CA, Milliman JF. 2002. In search of best


practices in international human resource management:
Research design and methodology. Human Resource Management 41(1): 530.
Glaister KW, Falshaw JR. 1999. Strategic planning: Still going
strong? Long Range Planning 32(1): 107116.
Gunn R, Williams W. 2007. Strategic tools: An empirical investigation into strategy in practice in the UK. Strategic Change
16: 201216.

Copyright 2014 John Wiley & Sons, Ltd.

Tapscott D. 2001. Rethinking strategy in a networked world


(or why Michael Porter is wrong about the Internet). Strategy
and Business 24: 18.
Thornhill S, White RE. 2007. Strategic purity: A multi-industry
evaluation of pure vs. hybrid business strategies. Strategic Management Journal 28: 553561.
Treiblmaier H, Filzmoser P. 2010. Exploratory factor analysis
revisited: How robust methods support the detection of
hidden multivariate data structures in IS research. Information
and Management 47(4): 197207.

Strategic Change
DOI: 10.1002/jsc

80

Rana Tassabehji and Andrew Isherwood

TRU Group. nd. Blue ocean strategy ocean strategy, red or


blue, belongs in the Dead Sea! Available at: http://trugroup.
com/TRU-blue-ocean-strategy.html.

Webster JL, Reif WE, Bracker JS. 1989. The managers guide
to strategic planning tools and techniques. Planning Review
17: 413.

Turocy TL, von Stengel B. 2001. Game theory. CDAM Research Report LSE-CDAM-2001-09, October 8. Available
at: http://www.cdam.lse.ac.uk/Reports/Files/cdam-2001-09
.pdf.

Wilcox RR. 1998. The goals and strategies of robust methods.


British Journal of Mathematical and Statistical Psychology 51:
139.

Venkat. 2007. Book Review: Blue Ocean Strategy. Available at:


http://www.ribbonfarm.com/2007/08/06/book-review-blue
-ocean-strategy/.

Zegveld MA. 2006. Corporate strategy and technology.


In Verburg RM, Ortt JR, Dicke WM (eds), Managing Technology and Innovation. Routledge: Abingdon; pp. 210227.

BIOGRAPHICAL NOTES

Rana Tassabehji is a Senior Lecturer at the


University of Bradford School of Management. Her
research, consulting, and teaching interests focus on
diffusion, management, and implementation of
digital technologies, e-business, and innovation in
both the public and private sectors.

Andrew Isherwood is currently Chief of Technology


for Pico Digital Technology in San Diego,
responsible for product strategy and getting
products from concept to market. He has over 12
years experience in the pay-TV sector variously as
Chief Technologist and Chief Technical Engineer.

Correspondence to:
Rana Tassabehji
University of Bradford School of Management
Emm Lane
Bradford BD9 4JL
UK
e-mail: r.tassabehji@bradford.ac.uk

Copyright 2014 John Wiley & Sons, Ltd.

Strategic Change
DOI: 10.1002/jsc