2.OTHER MODELS OF STRATEGIC MANAGEMENT.doc

7/29/2019 2.OTHER MODELS OF STRATEGIC MANAGEMENT.doc

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Chapter 5Prepared by: JamalBusiness Management

OTHER MODELS OF STRATEGIC MANAGEMENT

A. PATTERNS AND COMPETENCES:

Strategies are patterns of management decisions: According to Andrews, corporate strategy is the

pattern of decisions in a company that determines and reveals its objectives, purposes, or goals that

produces the principal policies and plans for achieving those goals.

A strategic approach involves identifying a firms competence. These competences may come about in a

variety of ways.

Experience in making and marketing a product or service

The talent and potential of individuals in the organization

The quality of co-ordination

I. Freewheeling Opportunities: It is a pattern of strategy that displays little apparent coherence

or forethought. It can be present in larger, highly innovative business, but is high risk approach,

depending for its success on a combination of experience, talent and market awareness.

II. Emergent Strategies: Emergent strategies are those which develop out of pattern of

behaviour.

III. Implicit or explicit Strategies:

Implicit strategies may exist only in the chief executives head

Explicit strategies are properly documented

IV. Mintzbergs Eight Styles of Strategies:

i. Planned strategies: Precise & explicit intentions, imposed by central leadership, large no of

controlsEntrepreneurial Strategy; Intended strategy drives from the vision of strong leader ship

Ideological Strategies; collective vision of org member, shared values

iv. Umbrella Strategies: Strategic targets are define and deliberate, how they are achieved is

emergent

Process Strategies: Process are formal and deliberate, content of strategies is emergent

vi. Disconnected Strategies: Members of subunit do their own thing, strategies are emergent for

whole org.

Consensus Strategies: Group in the org converge on common patterns of activity

Imposed strategies: Imposed by the environment, which are pre empts the orgs own choice

V. Crafting Emergent Strategies: these emergent strategies cannot simply takeover due tofollowing reasons:

i. Direction: The emergent strategy may be inappropriate for the long term directions and may

have to be corrected.

ii. Resources: It may have future implication for resources use elsewhere, in most orgs different

parts of the business compete for resources.

iii. Managers might wish to build on the strategy devoting more resources to it.

VI. How to Craft Strategy: Mintzberg lists these activities in crafting strategies.

i. Manage Stability: Like devote more time for planning of strategy, regularly updated it.

ii. Detect Discontinuity: Lookout regularly for environmental changes.

iii. Know the business: Includes awareness and understanding of businessiv. Manage Patterns: Detect emergent pattern and to help them take shape. Some emergent

strategies must be uprooted

v. Reconciling change and continuity: Natural synthesis of future, past & present


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B. STRATEGY AND MANAGEMENT INTENT:

Paradigm & Politics:Paradigm signify the basic assumptions & belief that an orgs decision maker hold

in common. It is a collective experience and make sense of a given situation. It is conservative and

inhabiting to innovation. So, it differs from the culture.

Politics means strategies develop as an outcome of process of bargaining and negotiation among powerful

stake holders.

Jhonson & scholes describe the processes by which paradigm & politics influenced strategy development.

Step1: Issue awareness: Internal and external feedbacks and trigger alerts from formal info sys make

individual aware of problemStep2: Issue formulation: formal analysis of information

Steps3: Solution developments: Memory search (solutions from the past), passive search(wait for

solution to suggest itself)

Step4: Solution Selection: like eliminate unacceptable plans, Endorsement ( junior mgt refines strategic

info/ decision made by senior mgt, or ignore certain options to protect themselves)

C. INCREAMENTALIZM: (small scale adjustments to current policies)

Bounded Rationality: find an option which is tolerably satisfactory rather than achieving excellence and

adopts it even though it may be less than perfect

Incrementalism: Involves small scale extensions of past practices. It avoids major errors and more likely

to be acceptable due to consultation, compromise, and accommodation are built into the process.

Disadvantages:

i. Does not work where radical new approaches are needed

ii. Some changes do not seems incremental, but involve dramatic shifts

iii. Ignores the influence of corporate culture, as it filters out unacceptable choices

iv. It might only apply to a stable environment

D. STRATEGIC THINKING:

o Strategic thinking involves a creative & intuitive approach to the business. Kenichi

Ohmae argue that strategy is essentially a creative process.

o Successful strategies have an idiosyncratic mode of thinking in which companys

customers & competitor merge in a dynamic interaction to produce a comprehensive set of objectives &

plans for action.

o Successful strategies result from a particular state of mind.

There are several aspects to strategic thinking:

i. Flexible thinking (what if? )

ii. Avoiding wrongly focused perfectionism

iii. Keeping details in perspective (especially uncertain details)

iv. Focusing on key factors and essentials of a business


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E. ENVIRONMENTAL FIT:

Environmental fit suggest that orgs are successful when they intentionally achieve internal harmony and

external adaptation to their environment. Two types of adaptation mgt can promote.

i. Improvement in the relationship b/w the org & its environment will have effect on itseffectiveness in its role.

ii. Improvement in its structure & systems will have effect on its efficiency

Choice of strategy must follow strategic logic. A/c to Stacey strategic logic requires that a proposed

sequence of actions satisfy two conditions.

i. It must be consistently related to the objective of the org

ii. It must match the org capacity to its environment

Ecological Modal suggests that an orgs environment changes, it will only survive if it adopts and evolve.

An org survive if it finds the niche that provides both demand for its output and resources for it to use.

Staceys Theory:

The environment is not always predictable. The environment is a feedback system in which some effects can be

amplified such as the rapidly expanding boycott of some product.

Org can shape their environment ( eg by moulding customer expectation)

Too much of a good thing can lead to failure, too emergent strategy lead to

anarchy

F. COMPETITION:

Competitive strategy is the taking of offensive or defensive actions to create

a defendable position within an industry

For businesses, strategy must address competitors, survival is impossible

without a competitive strategy

The best strategies are distinctive, not imitations of what others firms do

Strategy is not the same as operational effectiveness

Strategy is about choices including choices of what not to do

G. LEARNING BASED STRATEGY:

It recognize the need to exploit the input of the knowledge worker, the flow of fresh ideas challenges the

paradigm.

Knowledge as a resource:

Nonaka identifies two types of knowledge:

Tacit knowledge may be compared to individual skills. It is personal and rooted in a specific

context.

Explicit knowledge is formal, systematized & easily shared. e.g. specification for a technical

process

Knowledge creation:

The exploitation of knowledge requires that its acquisition or creation is organized in a rational fashion.

Argyris use term double loop learning to describe this process, which drive from a control theory in which

a feedback control system that incorporate the option of changing the target is called a double loop system.

In double loop learning, knowledge is not only acquired, organized, stored and retrieved, but the purpose

for which this is done are constantly reviewed. This involves regular examination of the orgs purpose and

objectives in the light of knowledge already acquired.


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The learning organization

Advantages: The org skilled at creating, acquiring and transferring knowledge, and at modifying its

behaviour to reflects new knowledge and insights.

The learning org will generate a flow of fresh ideas and insight.

This will promote renewal and prevent stagnation.

Increase openness to environment will enhance the quality of response to events

Disadvantages:

No advantages will be happen if there is rigid, prescriptive, top down approach to strategy

making process.

Wide range of inputs and a commitment to do discussion and debate required.

H. AN OVERVIEW:

Mintzberg suggests that a strategy is used to mean Plan, Ploy, Pattern, Position and Perspective

Plan: A consciously intended course of action

Ploy: A manoeuvre in a competitive game. .e.g. a firm might purchase heavy machinery to

discourage competitors from entering in the market rather than increasing production

Pattern: Mintzberg ideas of emergent strategies

Position: Environmental fit & relationship with other org. Distinctive niche position

Perspective; A unique way of looking at the world

The strategic planning models can be split a/c to some helpful criteria:Descriptive/Prescriptive: Descriptive means simply description of what has been observed actually

happening in the org, while others can be taken as guides to the development of effective strategies.

Descriptive includes paradigm, politics, patterns of decision, opportunistic, command, bounded rationality

and incremental approaches. Perspective includes rational modal, strategic thinking, learning based etc

Top down or bottom up Approach: Managerial control or input from lower down the hierarchy and vice

versa.

Internal and external bias: It include internal and external corporate appraisal like SWOT & GAP

analysis.

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2.OTHER MODELS OF STRATEGIC MANAGEMENT.doc