Académique Documents
Professionnel Documents
Culture Documents
Introduction
From a traditional or historical perspective, the term strategy reflects strong
military roots. It is from these origins that the concept of business strategy arose.
There are many varying definitions of business strategy as will become apparent
when you do your readings. Many definitions arise because of the many
perspectives business strategy can be seen from. It is the aim of this module to
introduce you to the different approaches taken to business strategy depending on
ones assumptions or basic beliefs relating to the nature of the environment and the
relationship of the strategist to it. The two main approaches are the traditional
deliberate planning approach of strategy of intent, or alternatively, the emergent
viewpoint of strategic management. The assumptions of these deliberate/strategies
of intent or emergent strategies discussed.
For more than three decades there was agreement on the basic paradigm of
strategy in business. The assumptions included were that the environment was in a
state of equilibrium, an organization was structural and change happened in a
cause and effect way. Several schools of thought existed within this paradigm, but
the basic principles and fundamental intent were essentially the same. In learning
about strategy and strategic management, it is important to understand the
traditional approach, and be able to apply the theories and models where they are
appropriate in analysis. The principles still have some application, but new
concepts of the fundamental nature of strategic management began to emerge
during the late 1980s. It is also essential to appreciate the shortcomings of the
traditional approach in the light of the assumptions of newer approaches and
paradigms. Hence, this module presents you with the different perspectives
present in the strategic management discipline.
Intended
strategy
Deliberate
strategy
realised
strategy
Unrealised
strategy
Emergent
strategy
A position
A posture
A perspective
Figure 1.1 Mintzberg
This definition is set in what Stacey (1996) calls the ‘stable equilibrium
paradigm’. This idea constitutes a management paradigm in which successful
organisations are seen to be those which are moving closer to a state of stable
equilibrium, distributed only by environmental changes that it was not possible to
predict.
These definitions imply the development of a formally written plan and its
implementation with the perception of two distinct phases, a formulation phase
and an implementation phased. These definitions are therefore from the planned
traditional perspective.
Alternatively, and more broadly:
An organisation’s strategy consists of the actions and business approaches
management employs to achieve the targeted organisational performance
(Thompson & Strickland, 1999, p. 8). According to Hubbard, Pocknee and Taylor
(1996, p. 2), strategy is about ‘those decisions, which have high medium-to long-
term impact on the activities of the business, including the implementation of
those decisions’. You can derive four key aspects of strategy from the above
definitions. Hubbard et al (1996) say that it is about long-term, decision-making,
integration and focus of business functions and most importantly implementation.
Formulation – Implementation –
Top management’s job Everyone’s job
Difficult Innovation
Economic, Resources,
Technological, Technology,
Political/Legal, Organization
Social
PERFORMANCE
The following two frames of reference by Stacey and Clegg are very useful in
understanding the planned /intent strategic viewpoint:
Table 1.2
Stacey’s Conventional Frame of Assumptions
Strategy
Strategy as the realization of prior intent.
Long term future is predictable to some extent.
Visions and plans are central to strategic
management.
Vision: single shared organisation-wide intention. A
picture of a future state.
Strongly shared cultures.
Cohesive teams of managers operating in a state of
consensus.
Decision making as purely logical, analytical process.
Long term control and development as the
monitoring or progress against plan milestones.
Constraints provided by rules, systems and rational
argument.
Top management drives and controls strategic
direction.
General mental models and prescriptions for many
specific situations.
Adaptive equilibrium with the environment.
Source: Stacey, R (1993 February). Strategy as order emerging from chaos. Long Range Planning,
26(1) 10-17. (adapted)
Table 1.3
Clegg’s Conventional Assumptions for strategies of intent
Planned and Intent
Rational planning
Strategic planning
Hierarchy
Taylorism/Fordism
Local/National
International
Source: Clarke,T & Clegg, S (1988). Changing paradigms, p. (adapted)
This model is the stable equilibrium or conventional model and is the model
from which strategic analysis, strategic formulation and strategy
implementation and evaluation is derived. It is a model of prior intent (either
static or dynamic). It is from this conventional wisdom that Modules 2 to 12
are to be understood.
As modern science has been the dominant way of thinking since industrialisation,
sociological and organisation studies have been underscored with positivist
/reductionist assumptions. These dominant views are traditional to the classical
modern Western approach to thinking. The environment is considered static and
stable. Conventional business systems preoccupied with order, stability and
consistency in all time frames result in ideologies, structures and procedures to
control long-term outcomes (Stacey, 1992, p.43).
Strategic choice theory espouses a strategy by intention. It prescribes a procedure
involving the formulation of long-term strategies and then their implementation.
The theory is built on the systemic notion of interaction in which organisations
adapt to their relatively stable environment. Humans are cybernetic entities that
learn through an essentially negative feedback process. The strategist is an
objective observer, who stands outside the organisation and observes it as a pre-
given reality. Analysis is on the macro level of the organisation and
microdiversity is ignored. Conventionally, strategy by prescription or intention
results in the values and intentions of most powerful individuals in the
organisation formulating the strategy (Stacey, 2000, p. 34, p. 398, p. 401).
These static perspectives of strategy include the basis of traditional business
analysis. These, by necessity are review of the past and present rather than a
prescription for the future (Stacey, 2000, p.40; McKenna, 1999, p.392).
Traditionally in conventional business strategy, the first phase comprises of
analysing trends in the industry, and then scrutinizing enterprise business
processes to identify gaps between the firm and best practice leaders. The second
phase requires designing fundamental organisational change. The third phase
culminating in the implementation and execution of the business plan to bring
about the necessary organisational changes. In conventional business design, core
competencies are analysed. Fairly rigid infrastructures and processes are then
created in order to produce these products or services. Design ends with the
delivery of products through relevant channels to customers (Kalakota &
Robinson, 2000, p. 60 and 61). It is essentially a seller driven model and an
activity-centered approach.
Figures 1.3 and 1.4 are diagrammatical interpretations of the traditional planning
school models.
Figure 1.4 How strategic thinking and strategic analysis lead to good strategic
choices
Activity
(15 minutes)
List your strengths, weaknesses, opportunities and threats present in your life at
this time. Remember strengths and weaknesses are internal and the remainder
external.
Reading 1
Wheelen, T.L. & Hunger, J.D. (2000). Strategic management and business policy
(p. 358-360). Upper Saddle River, NJ: Prentice Hall International.
Reading 2
Malloy, D.C., & Lang, D.L. (1993). An Aristotelian approach to case study
analysis. Journal of Business Ethics, 12(7), 511-516.
Journal
As referred to in the Unit Plan, it is optional for students to keep a journal whilst
working through the unit. However, doing this may help a student to understand
and appreciate the contents much better.
Write down something that you want to find out more about.
Check that you have not missed any section of this module before proceeding to
the next.