Vous êtes sur la page 1sur 36

ABSTRACT.

Over the last thirty years, strategic management has become established as a legitimate field of research and managerial practice (Shrivastava, 1986). In the evolution of strategy research, a diversity of partly competitive and partly supplementary paradigms have emerged. To provide an unequivocal definition supplementary paradigms have emerged. To provide an unequivocal definition would mean ignoring the versatility of strategic management. The choice of a definition and the application of specific strategic management techniques is greatly dependent on which paradigmatic schools of thought in strategic management one prefers. In this book, we will therefore review the various schools of thought and their contribution to the theory and practice of strategy. A school of thought is understood to be the range of thought of a specific group of researchers, which has crystallized within the field of strategic management 1993). In other words, a school of thought can be seen as an institutionalized paradigm. Besides reflecting on the variety of schools in strategy, we will also sketch out new promising directions in strategy research and practice. Although some strategy scholars have argued that the achieved multiformity in schools of thought signifies an enrichment of the research within the field of study (cf. Mahoney, 1993), other scholars from related disciplines complain about the lack of consistency and coherence (Camerer, 1985). In particular, they argue that the field of strategic management is extremely fragmented and that here is no agreement concerning the underlying theoretical dimensions nor the methodological approach to be employed.
1

(Brown,

In response, many strategists have advocated increased integration of theories within the strategy field.. Mintzberg (1990; 1998) has identified ten schools of strategy theory. Among the ten schools three namely the design school, planning school, and the Positioning school are prescriptive and the other seven namely the Entrepreneurial school and the Cognitive school, the Learning school , the Cultural school, the Environmental school and the configuration school are descriptive. I will like to give a brief introduction of all the ten schools in this paper, THE DESIGN SCHOOL This school is defined by the Havard business School General Management Group(1965) textbook Business Policy:Text and case. Conceptually this has a simple two-stage approach : (1) from close examination of a company,determine its internal capabilities(its strength and weakness ) and its external possibilities ( its opportunities and threats); then (2) Establish Fits between internal and external aspects. THE PLANNING SCHOOL The Planning school has or contains most of the assumptions of the Desighn school but the planning school as a whole fits into the overall trend of management and business practices that is formal procedures, formal thinking, formal practices and formal analysis. That is with the planning school distinct steps and procedures are followed.

THE POSITIONING SCHOOL The Positioning school largerly deprives from Micheals Porters two landmark books Competitive Strategy (1980) and Competitive Advantage (1985), sees strategic management as the process of selecting from a generic strategies and implementation as the following-through of business logic of that generic strategic. Most notable of this school has been one simple and revolutionary idea for better or for worst. It talk about strategies as a position in the economic marketplace-are desirable in any given industry: ones that can be defended against existing and the future competitors.

THE ENTERPRENURIAL SCHOOL The entrepreneurial school ideology as (a) being based on a dialect worldview but (b) being based on the investment in specific uncertainties. The entrepreneurial school centers its process on the Chief Execution. That shifts strategies from precise design, planning or positions to visions or perspectives.

THE COGNITIVE SCHOOL To understand how strategies are formed there is the need to probe into the minds of the strategist? Another, branch of this school has accepted a more constructivist and an interpretative approach of the strategy view or process.

THE LEARNING SCHOOL Strategy is that thing which our people continue to develop in response to abnormalities. If strategy is really complex as implied by the cognitive school and thus overwhelm by the prescription of the design , planning and the positioning schools , then how strategies supposed to proceed? This school basically is about how strategies emerge as people acting individually or collectively come to learn about a situation as well as their organizations capabilities to deal with it.

THE POWER SCHOOL This school focus on negotiations points to a fundamental ideological view where the firms knowledge are owned by internal power interest in other words by institutions. It focuses its strategy making rooted in power.

THE CULTURAL SCHOOL Mintzberg strives too define the cultural school as a complement to( or perhaps a negation of) the power school-as a kind of social power. Its focuses on common interest and integration. Strategy is viewed as a social process rooted in culture.

THE ENVIRONMENTAL SCHOOL This school views the environment as the architects of a companys strategy-that, following population ecologists, as environment forces shape the niches that
4

companies in them can occupy, so the must therefore shape the strategies available to those companies or else be selected out. The environmental school deserves the attention of the details it throws on the demand of the environment.

THE CONFIGURATION SCHOOL This school has two main sides (1) describes the organization and its surrounding context as configuration and (2) describes the strategy-making process as transformation. Currently this school enjoys the most extensive literature and practice.

INTRODUCTION Among the schools of thought seven are descriptive in nature whereas the Positioning, Design and Planning schools of thought of the strategic management schools of thought are prescriptive in approach. I am interested in the planning school because of its unique approach to strategy and its widespread nature it has earned for itself for the past years. In respect to this, I would like to take some time to review some of it related literature, examined its models and approaches, contributions and limitations and make some useful suggestions and recommendations for both strategists and scholars in a whole. In this paper, it is to be made clear that the main point is a comparison of the planning school as a prescription school against other prescription schools of thought Of all the schools talked about earlier, the planning school became a very important issues and challenged the other prescriptive schools. The planning school seems to be against the idea of strategies being a form of knowledge. By capturing the business desires in the form of programmatic goals and objectives and assuming that all other steps are infallible, strategy simply disappear. Hence this school denies the existence of uncertainty in any form and is almost a meta-strategy of placing trust in the formal planning process. This school marks the beginning of the point where business models really took off, by the applying of risk management techniques to abstracted statistical model of the firm.

Literature review This school has been dealt with or researched into by many distinctive scholars, researchers and academicians. Their literature they worked into conveyed around the main or center theme of this school. Over the past three decades, a variety of approaches, perspectives, models and methodologies have been developed and used as the basis for the planning school. At this point, I will have a look at some of the scholarly works and contribution in various forms which give association to the planning school. The Planning School views strategic formulation as a formal process in which a thorough set of procedures are followed from which derives a situation analysis in order to formulate the appropriate strategy. The need for a systematic process of strategic formulation which embraces the firms vision and creativity permitting a greater flexibility of strategic decisions in response to the environmental surprises has been supported by (Burgelman and Grove, 1996; Eisenhardt, 1989). The Ansoffian Strategic Planning model, which we will use as our candidate model representing the Planning School, adds dynamism to its functionality in three forms; Strategic Learning, Strategic Posture Management, and a robust system of environmental scanning, thus answering the critics claims of invariability and environmental predictability. The Planning School gains support from such advocates as (e.g. Ansoff, 1965; Andrews, 1971; Ansoff, Antoniou and Lewis, 2004; King & Cleland, 1978)
7

Simon (1993) states in his study that effective strategic planning calls for anticipating the future, scanning the environment for present and prospective competitors and novelties, and developing skills to generate alternatives in order to implement new plans. Planning Schools forecasting strengths enables it to identify threats and to address them well firm.

Figure 1 Planned management

Ansoffs Strategic Success Paradigm states that for optimal financial success, the aggressiveness of the firms strategy must match the environmental turbulence level (Ansoff, 1965). This portion of the Strategic Success Paradigm was borrowed from the concept of organization-environment matching found in the Requisite Variety Theorem by W.R. Ashby which states, in order to succeed in its environment, an organization must match the complexity of its response to the complexity of the
8

environment (Ashby, 1956). Ansoff considered formal, logical, comprehensive planning to be beneficial in all types of environmental conditions not simply high levels of discontinuity. Camillus supports Ansoff when he stated that the single most important common thread that runs through all synoptic formal approaches is the reliance on an analytical framework that is perceived to be logical and comprehensive (Camillus, 1982). In practice, the planning school begins with an objectives-setting stage followed by an external audit and an internal audit stage which achieved by relying on nard data. Whereas the design school of thought repackages dialectic knowledge as if these were science, the planning school tries to close the gap between traditional business theories and business practice and the new world of risk management. To

do this it needs to abstract a model of how business work, and then use that to run the figures for different scenarios. Despite the claim formality of the preceeding stages, the methodology of objective-setting remains unspecified because it is inherently dialectic- a negotiation between hard data and the formal planning theories or processes. It seems that the Planning School is against the idea of strategies being a form of knowledge (perhaps as they are inherently uncertain). By capturing the business (supposed) desires in the form of programmatic goals & objectives, and assuming that all other steps are infallible, strategy simply disappears. Hence, this whole School denies the existence of uncertainty in any form, and is almost a meta-strategy of placing trust in the formal planning process.The diagram below shows the planning
9

school knowledge tree:

Figure 2 the planning school knowledge tree

10

THE CONTENT. THE EVOLUTION OF THE PLANNING SCHOOL IN PERSPECTIVE. Strategy Formation as a formal Process The difference of the planning school has to do with its approach to strategy formation. The evolution of the planning school can be tracedhow it came about,it models and approachesthrough several phases. These represent distinct bodies of literature that converged around the central themes of this school. The main focus of the planning school is its basis in prescriptive rather than descriptive. The prescriptive schools is contend that strategy is deliberate and should follow a formal planning pattern, whiles the descriptive school seeks to counter that argument by describing strategy as emergent pattern in action. According to the planning school, strategies emerge as a formal process. Both Planning and Design School emerged from similar mid-1960s academic business contexts, and so share many features. Their most significant difference is that the other Design School implicitly requires an imaginative step (to devise candidate strategies): however, what the scientistic business theorists behind the Planning. School really wanted was for business to function like a machine - and there was hence no room for creativity. Everything Must Be Automatic - There Must Be No Choice.

11

The Strategic Planning Model I was in a warm bed, and suddenly I m part of a plan. Woody Allen in Shadows and Fog There are various strategic planning models. Every textbook and strategic management consultants have their own model. It has mostly be reduced to the SWOT model, it is sort for because it has been divided into various steps and procedures with checklist and techniques and it give an inside into the setting of objectives in the front of organizations and the elaboration of their budget and operating plans on the back end. There are various diagrams for the elaboration of the SWOT model but for the context of this paper we will use the summarized diagram from Gorge Steiners book Ten Management Planning(1965) is in figure three below.

12

Figure 3 The Steiner model of strategic planning

13

THE OBJECTIVES-SETTING STAGE. In place of thinking about values in the design school, proponents of the planning school developed extensive procedures to elaborate and, quantifying the goals of the organization to make sure if the layout plan have been achieve. Scholars over the years have made a distinct difference between those models that separate the goals from the objective and those that combine them.

THE EXTERNAL AUDIT STAGE. Once the objectives have been set, the next two stages, as in the design school model, are to assess the external and the internal conditions of the organization. We refer to these as audits. A major factor in the auditing stage is the external environment or conditions. The external environment is the set of condition that are outside the firm which can affect its future conditions. To be able to know the future of the external environment the planner need to forecast well and if there is the inability to predict than you cannot plan that is there will be the inability to plan. Thus "predict and prepare" (Ackoff, 1983:59) became the motto of this school of thought. In order to control the environment various approaches ahs been used throughout the recent years ranging from simple to complex approaches most popular of them is the scenario building approach. THE INTERNAL AUDIT STAGE : regularly with the planning approach, the need to evaluate the strengths and weaknesses was also subjected to extensive de-composition. The assessment of distinctive, competences is necessarily judgmental, through the use of formalized technique generally gave way to simpler checklists and
14

tables of various kindswhat Jelinek and Amar have referred to as "corporate strategy by laundry THE STRATEGY EVALUTION STAGE: This stage, does the evaluation of the strategies. This process of evaluation has to do with the elaboration and qualification, techniques abound , ranging from simple ,early one which focus on the return on investment to lately develop techniques such as competitive strategy valution,risk analysis, the value curve, and the various methods or procedures corresponding with the calculation of shareholder value. Another assumption of the evaluation stage is that strategies are not evaluated so much as delineated , at a specific point in time. Strategies must be evaluated so that one can be selected. THE STRATEGY OPERATIONALIZATION STAGE. In this stage the planning process has pass through the restricted strategy formulation and open it self to implementation. Strategy formulation is open-ended, divergent process (in which imagination can flourish), whiles the implementation should be a more closed-ended and convergent. Because in the planning process strategy follows a more formalize structure the implementation provides a freedom too decompose, elaborate, and rationalize, down ever widening hierarchy. For an effective strategy implementation all strategies much be divided into sub strategies. As Steiner has stated: "All strategies must be broken down into sub strategies for successful implementation" (1979:177). In develop a hierarchy for the strategy implementation the different time perspective should be taken into consideration with a long time comprehensive strategic plan been on top followed by medium term plans which gives rise to short term operating
15

plans. Paralleling this is a hierarchy of objectives, a hierarchy of budgets, and a hierarchy of sub strategies (corporate, business, and functionalin this school usually seen as positions rather than perspectives), and a hierarchy of action programs. SCHEDULING THE WHOLE PROCESS. Following the process is not the only thing which is needed to b carried out there must be a schedule or timetable to outline the sequence in which they are carried out. Steiner in his book which he wrote in 1979 says the front of his whole model an initial step , called the plan to plan model an initial step, called the "plan to plan Sorting Out the Hierarchies Putting all the all theses together you get a comprehensive strategic planning. The hierarchy model shows these four main components , one for objectives, one for budgets, one for strategies and one for programs. On one side are strategies and programs under the label action planning These are concerned with making decisions before the fact in order to drive behavior. On the other side are objectives and budgets labeled performance control, since these are designed to assess the result of the behavior after the fact

16

.Figure 3 The Four Planning Hierarchies

Premises of the Planning School 1. Strategies result from a controlled, conscious process of formal planning decomposed into distinct steps, each delineated by checklists and supported by techniques. 2. Responsibility for that overall process rests with the chief executive in principle; responsibility for its execution rests with staff planners in practice. 3. Strategies appear from this process full blown, to be made explicit so that they can
17

then be implemented through detailed attention to objectives, budgets, programs, and operating plans of various kinds.

RECENT DEVELOPMENT OF THE PLANNING SCHOOL In recent times there has been newly developed model about the planning school which focus more on its application. It has been categorized into two main distinct that is scenario planning and strategic control. SCENARIO PLANNING The scenario is a tool in strategic formulation which has the assumption that if you cannot predict the future than you have to speculate upon variety of them you might open up your mind and perhaps find the right one. In scenario building they open the planners perspective to a variety of possible outcomes, so in a whole the exercise may be seen as one of a stimulating creative activity. In these respects, scenario building might be described as planners at their best, rather than planning per se, because the intention is not to formalize strategy making so much as improve however managers do it. STRATEGIC CONTROL It is about keeping organization on their intended strategic track, what Simons referred to as the cybernetic view(1988). Strategic control is seen as the means of review and accept proposed control. In their book Strategies and Styles: The Role of the Center in Managing Diversified Corporations, Goold and Campbell (1987) treat strategic control in this way, as one of three strategy-making styles available:
18

1.

Strategic planning: This style is consistent with planning school where strategic decisions are been taken by top management of the organization at the headquarters of the organization. whereby the center acts as an organizing office to determine through careful analysis how resources are to be coordinated and redistributed among businesses.

2.

Financial control: This style is defined by minimal involvement of the center or corporate office in strategy formation. Responsibility is devolved to the individual businesses within the corporation. The center maintains control principally through short-term budgeting

3.

Strategic control: This is a hybrid style, which involves both business unit autonomy and promotion of corporate interests. Here decision making is decentralized to other decisions of the organizations but it is been approve but the headquarters. The center uses planning reviews to test logic, to pinpoint weak argument and to encourage business to raise the quality of their strategic thinking. When headquarters approves plan and budget it takes up the responsibility to monitor the business performance against a strategic milestones such as market share and budgets.

Goold, Campbell, and Alexander (1994) more recently developed their work on multibusiness strategy through a "parenting" metaphor: there are different roles within the family, for the parent (headquarters) and the children (businesses). Of course, metaphors are not always neutral: this one certainly conveys some messages about control of divisions by corporate headquarters.
19

Strategic control has to broaden their scope beyond strategic planning. Stratefy needs to be effective and efficient, as it will be shown in the matrix below,

Figure 4 Matrix on broadening strategic control

PLANNING UNPLANNED TROUBLES Strategic planning has ran into trouble in the early 1980s when activity was cut back in many companies. Business week in 1984 reported that few of the strategies planners plan are implemented successfully. Igor Ansoff, wrote in 1977, twelve years after the publication of his key book Corporate Strategy, that "in spite of almost twenty years of existence of the strategic planning technology, a majority of firms today engage in the far less threatening and perturbing extrapolative long range planning Mintzberg (1994) documented the evidence that piled up against the process, including stories in the popular press and empirical findings from the research, which contains a long string of studies that set out to prove that strategic
20

planning pays but never did.* Wilson's "seven deadly sins of strategic planning," reproduced in the accompanying box, summarize some of the problems that had undermined the process.

THE SEVEN DEADLY SINS OF STRATEGIC PLANNING 1. The staff took over the process. This situation arose partly because CEOs created new staff components to deal with a new function, partly because the staff moved in to fill a vacuum created by middle management's indifference to a new responsibility, and partly because of arrogance and empire building. As a result, planning staffs all too often cut executives out of the strategy development process, turning them into little more than rubber stamps 2. The process dominated the staff. The process's methodologies became increasingly elaborate . Staff placed too much time on analysis, too little on true strategic insights. Strategic thinking became equated with strategic planning 3. Planning systems were virtually designed to produce no results The main design failure lay in rejecting the planning role of the very executives whose mandate was to execute the strategy. The attitude Of many was made of by the angry retort of an executive. The other design fault was the inability to integrate planning systems with operating systems 4. Planning focused on the more exciting game of mergers, acquisitions, and divestitures at the expense of core business development. This problem stemmed in part from the temper of the times. But it also resulted from the inappropriate use of
21

planning tools. 5. Planning processes failed to develop true strategic choices. Planners and executives rush into accepting a strategy that they seen satisfied instead of putting much effort to search for real ones , analyze and come up with alternative strategies before taking decisions 6. Planning neglected the organizational and cultural requirements of strategy. In strategy formation the company ignores the internal environment which is critical to strategy implementation and focus much on the external environment. 7. Single-point forecasting was an inappropriate basis for planning in an era of restructuring and uncertainty. Companies still tended to rely on single- point forecasting. Scenario-based planning was the exception rather than the rule. Planning assumptions which are base on a single future one which has a slight difference from the past trends of the organization. THE FALLACIES OF STRATEGIC PLANNING An expert has been defined as someone who avoids all the many pitfalls on his or her way to the grand fallacy. Here will consider the fallacies of strategic planning in three ways. Our critique is base on strategic planning not planning. THE FALLACY OF PREDETERMINATION. To engage in strategic planning, an organization must be able to forcast the course of its environment, control it and simply assume its stability Igor Ansoff wrote in Corporate Strategy in 1965 that "We shall refer to the period for which the firm is able to construct forecasts with an accuracy of, say, plus or minus 20
22

percent as the planning horizon of the firm. The truth of forecasting is that, in fact whiles certain repetitive patterns may be predictable. The forecasting of uncertainty such as the change of technology or technological breakthrough and prices increase. According to Spiro Makridakis, a leading expert in the field, "practically impossible." And prepare to react to it accordingly. The only hope for planning is to accept the present trends and hope for the best in the future THE FALLACY OF DETACHMENT, Marianne Jelinek developed the interesting point in her book, called Institutionalizing and Innovation, that strategic planning

has been to the executive suite. It is through administrative systems that planning and policy are made possible, because the systems capture knowledge about the t a s k . Therefore manager must manage by remote control. The trick, of course, is to get the relevant information up there, so that those senior managers "on high" can be informed about the consequences of those details "down below," without having to enmesh themselves in them. And that is supposed to be accomplished by "hard data"quantitative aggregates of the detailed "facts" about the organization and its context, neatly packaged for immediate use. THE SOFT UNDERBELLY OF HARD DATA The belief that strategic managers and their planning systems can be detached from the subject of their efforts is predicated on one fundamental assumption: that they can be informed in a formal way. The world information must be reduced to a firms data, hardened and aggregated so as to be supplied in a more simple form. In other words, systems must do it, whether
23

they go by the name of management information systems which deals with hard data proves to have a decidedly soft underbelly I. Hard information is often limited in scope, lacking richness and often failing to encompass important noneconomic and no quantitative factors. Information which are important to strategy planning never does become hard data. Therefore manager spend time to create their own information system putting together a network of contacts and informers of all kinds 2. Much hard information is too aggregated for effective use in strategy making. The obvious solution for a manager overloaded with information and pressed for the time necessary to process it is to have the information aggregated. Often is not the great deal of information lost in aggregate but rather the essence . 3. Much hard information arrives too late to be of use in strategy making. Information takes time to "harden": time is required for trends and events and performance to appear as "facts," more time for these facts to be aggregated into reports, even more time if these reports have to be presented on a predetermined schedule, strategy making has to be dynamic, reacting to unfolding events, manager does not need to waste time for the information to be harden before they act whiles competitor capture the minds of valuable customers. 4. Finally, a surprising amount of hard information is unreliable. Soft information is supposed to be unreliable, subject to all kinds of biases. Hard information, in contrast, is supposed to be concrete and precise; it is, after all, transmitted and stored electronically. Something is lost in the process of quantification before it is been
24

activated. Often soft information are speculative in nature and creates distortion Mostly you will find executives doing exactly what they have planned to do and disconnecting from the details. Effective strategic are people who attach themselves to the daily detail. It turns out that hard data can have a decidedly soft underbelly. As specified in the accompanying box, such data are often late, thin, and excessively aggregated. Effective strategy making connects acting to thinking which in turn connects implementation to formulation. THE FALLACY OF FORMALIZATION. Can the system in fact do it? Can strategic planning, in the words of a Stanford Research Institute economist, "recreate" the processes of the "genius entrepreneur? (McConnell,1971) Can innovation really be institutionalized? Above all, can such analysis provide the necessary synthesis? Bear in mind that strategic planning has not been presented as an aid to strategy making, as some kind of support for natural managerial processes (including intuition), but as strategy making and in place of intuition. Proponents of this school have long claimed this to be the "one best way" to create strategy.

25

Figure 5 The formalization edge

CAPITAL BUDGETING VERSUS STRATEGY FORMATION Capital budgeting is an established procedure by which unit managers (division heads, functional managers to approve cost and benefits so that management can compare and rate them and accept what the organization is able to fund. One of the early studiesan intensive probe into the process in one large divisional zed firmfound that the senior management had a propensity to approve all the projects that reached its level. "The important question," wrote the author, "was whether that group of officers which possessed the power to move proposals through the funding process chose to identify a particular proposal for sponsorship," because once that happened, proposals had more or less free passage (Bower, 1970) In recent study Marsh et al. looked carefully at three firms considered "sophisticated" in their use of capital budgeting, and found all kinds of problems. The procedure
26

manuals "proved quite hard to locate!" "Hard-to-qualify costs and benefits were excluded from the financial analysis." Broms and Gahmberg found evidence of capital projects in some Finnish nd Swedish firms "regularly miss[ing] the mark" (e.g., requiring 25 percent are turn on investment while consistently getting about 7 percent). These authors referred to "this self-deception," these "mantras" as "socially accepted fact Capital budgeting, therefore, appears to be a formal means not to plan strategy but to put up a form of structure that considers the projects and to inform senior management about them. Capital budgeting take the place of the context of existing strategics. Capital budgeting is a disjointed process, or, more to the point, a disjointing one

Figure 7 Planners around strategy making

27

THE GRAND FALLACY OF "STRATEGIC PLANNING." Thus we arrive at the grand fallacy of strategic planning, a composite, in fact, of the three fallacies already discussed. Because analysis is not synthesis, strategic planning has never been strategy making. Analysis may follow and elaborate synthesis, by decomposing and formalizing its consequences. Analysis cannot be substituted for synthesis. We can conclude that strategy planning has been misnamed rather should have been called strategy programming.

The Context and Contribution of the Planning School There is, however, no need to throw out the strategic planner baby with the strategic planning bathwater. Planners has a very important role to play in strategy formulation. It can be seen in figure 6 above. THE UPSIDE OF TOOLISM 1. Every tool carries a set of strengths and weaknesses. Success requires understanding the full effectsand side effectsof each tool, then creatively and using them at the right time 2. Tools should be judged by their utility, not by their novelty. 3. Tools exist for the benefit of people, not vice versa. Management tools are credited by their advocates with saving corporationsalmost as loudly as they are blamed by their critics for destroying them. The truth is neither the people makes company fail or succeed. Planners can also act as catalysts, not to promote formal planning as some kind of imperative, but to encourage whatever form of strategic behavior makes sense
28

for a particular organization at a particular point in time when necessary planner can carry out formal planning to as a means of program and when strategies come up can be codify, elaborated and translated into ad hoc programs and routine plans and budgets and use them on purpose of communication and control. Some of the roles involved are analytical in nature. That is organization must be able to distinguish between left-handed and right handed planners, encourage creativity and creative thinking. The right-handed planners are mostly concerned with more formal kinds of strategy analysis and particularly with the strategic programming of clear strategies

CASE STUDY THE TOYOTA AUTOMIBLE COMPANY Evolution of Toyota The roots of the Toyota Manufacturing company can be traced back to Sakichi Toyoda, a tinkerer and inventor, who lived around the late 1800s in a farming community outside of Nagoya. As a boy, Toyoda learned carpentry from his father and started designing and building wooden spinning machines. In 1894 he began to make manual looms that were relatively cheaper and more efficient than existing looms. Toyoda developed an automatic power looms with the motive to relieve his grandmother and other friends from the hard spinning and weaving work. Among his inventions was a special mechanism to automatically stop a loom whenever a thread broke. This invention led to the concept of jidoka-automation with
29

a human touch. If Sakichi Toyoda put his mark on the industrial world through loom making, Just-In-Time was his son Kiichiro Toyoda's contribution. His ideas were influenced materialize by a study trip to Ford's plants in Michigan(U.S.A) to see the automobile industry Kiichiro was also inspired by the U.S. supermarket system of products been replace us its finishes from the shelves. Toyota now (1900-date) It is admitted that there is something unique about Toyota. The giant Japanese automobile manufacturer company recently has the fastest product development process in the world. New cars and trucks take 12 months or even less to design, while competitors typically require two to three years. Toyota has phenomenal quality levels that rivals can only imagine of. Toyota has turned operational excellence into a strategic weapon not merely through tools and quality improvement methods but a deeper business philosophy rooted in understanding of people and what motivates them. Its success is ultimately based on its ability to develop leaders, build teams, and nurture a supportive culture, to devise strategy, to build deep supplier relationships, and to maintain a well planned organization policies and structure Toyota invented Lean Production in the 1940s and 50s. The company focused on eliminating wasted time and material from every step of the production process (from raw materials to finished goods).The result was a fast and flexible process that gives

30

the customers what they want, at the right time and in the right quality that the customers want at an affordable cost. Toyota improved production by:

What Made Toyota The Worlds Best Manufacturer?

After the Second World War Toyota develop a Toyota production system to help produce a variety of vehicles on the same assemble line for its customers unlike its major competitor GM and Ford who depended much on mass production and economics of scale. Toyotas market was very small but it had to produce a variety of vehicles on the same assembly line to satisfy customers. The solution: making the operations flexible. This resulted in the birth of TPS.

TPS borrowed some of its ideas from the United States. The core idea of the Just in Time (JIT) system came from the concept of the pull-system, which was inspired by American supermarkets. In the pull system, individual items are replaced as each item begins to run low on the shelf.

Applied to Toyota, it means that the first step in the process is not completed until the second step uses the materials or supplies from Step 1.

At Toyota, every step of the manufacturing process uses Kanban to signal to the previous step when its part needs to be replenished.

31

Toyotas unique problem solving plan; Level of Problem Corresponding Level of Countermeasure There is a puddle of oil on the shop floor. Clean up the oil. Because the machine is leaking oil. Fix the machine. Because the gasket has deteriorated. Replace the gasket. Because we bought gaskets made of inferior material. Change gasket specifications. Because we got a good deal (price) on those gaskets. Change purchasing policies. Because the purchasing agent gets evaluated on short-term cost savings. Change the evaluation policy for purchasing agents. The company, aside from broadly defining customers to include internal and external clients, Toyota also adopts a well formal structured plan to problem solving, which became a cornerstone for continuous improvement

32

Conclusion This paper has tried to describe the basics needed to build a planning organization. The idea to follow formal process in arriving at a strategy to improve the performance of a company. Though it has been proven to be a very successful tool to keep up with the changing competitive environment. The most successful are companies that are products of carefully following the formal process, strategy analysis and implementation and evaluation processes. They have slowly evolved over time.

Nevertheless, there are always some changes which can be made immediately. Any company that wishes to become a planning organization can begin by taking a few simple steps. The first step is the creation of an environment which is conducive to planning. There must be time for reflection and analysis, to think about strategic plans, analyze customer needs, and to invent new products. Training in brainstorming, problem solving, evaluating experiments are just a few learning skills which are essential. Another important step is to open up boundaries and stimulate the exchange of ideas. This could be done by conferences, meetings, and project teams which either cross While it seems idealistic to assume that a rational planner can have perfect information for forming a strategy for an organization, surely it is just as idealistic to assume that an emergent grassroots strategy would be an option .I argue that, while the Planning School has many positive features, it simplicity confuses formal strategy with global tactics. The best approach for the strategist is to sort through the various schools of thought and combine those ideas and models that are realistic and
33

fit into their business situations and apply them. I finally conclude that no single school holds the key to business success, even not the Planning school which have discuss in this paper Nevertheless they hold useful tools that could aid strategists in various situations and conditions. Implies that, they are subjective and conditionalitys so the crucial aspect is left with the smartness of the planner or the strategist. After all, what might be good for the goose might not be good for the gander! In other words what might be good for one company made not be good for another? .

34

REFERENCES 1. "The Science of 'Muddling Through'" Charles Lindblom, Public Administration Review, Vol. 19, No. 2 (Spring, 1959), 2. Andrews.K.R (1971) The concept of corporate strategy Dow-Jones Irwin. Homewood IL 3. Ansoff , Antoniou and lewis, (2001) strategic management:introduction to the ansoffian Approach - xanedu press: Michigan 4. Ansoff H. I (1965) The firm of the future, Harvard Business Review sept. Oct. 5. Burgelman R. A and Grove, A (1989) strategic dissonance, California Management Review 38(2) 6. 7. Corporate Strategy. H. Igor Ansoff, ( 1964) Eisenhardt, K.M (1989) Making fast strategic decisions in high velocity environment, Academy of management Journal.32.pp543-559 8. King , W. R and Cleland, D. I (1978) Strategic Planning and policy Van nostrand Reinhold: New York 9. Mintzberg, H., and James, R., eds., The Strategy Process (Englewood Cliffs, NJ: Prentice Hall, 1988:82-93). 10. Simon . H. A (1993) Strategy and organizational Evolution strategic management journal vol.14 pp 131-142
35

11. Strategy safari: a guided tour through the wilds of strategic management Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel, Business and Economics (2005) 12. Theory and research in strategic management: Swings of a pendulum Rumelt, Schendel et al.., 1994 Journal of Management. 13. Tom Elfring, Henk W.Volberda, School of thought in strategic management fragmentation , integration and synthesis 14. www.google.com

36