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Ansoff revisitedHow Ansoff interfaces with both the planning

and learning schools of thought in strategyRobert Moussetis

Department of Management and Marketing, North Central College,Naperville, Illinois, USA

Abstract

Purpose The purpose of this paper is to revisit Igor Ansoffs work and how it interfaces with thevarious schools of strategic management.

Design/methodology/approach Ansoffs work of 40 years is reviewed and related to otherschools of thought in strategic management.

Findings Ansoffs work is much more comprehensive than the literature suggests. His later work(after 1990) is largely unnoticed by academics, nevertheless, it is the empirical findings of histheoretical postulations. Moreover, his work interfaces with virtually all schools of thought in strategicmanagement.

Research limitations/implications It will provide a broader view of Ansoffs work and perhapstrigger additional research as a result of his later work. Most researchers continue to associate Ansoffwith his early thoughts.

Practical implications Ansoffs work has found wide applications in a variety of industries.His work was mostly with industries that used his propositions in order to better strategies.

Social implications Ansoffs later research and empirical findings could provide a launchpad forre-examining the method by which organizations assess their environment, strategic behaviour, andinternal capability. Therefore, organizations may have an alternative method to develop strategy.

Originality/value This is the first attempt to provide a historical view of Ansoffs work and

perhaps his timeliness. The recent economic crisis only further supports Ansoffs basic position thatcompanies must create custom strategies to fit their environment, culture, and capabilities.

Keywords Strategic management, Strategic change, Management history, Management theory,Management strategy, Business history

Paper type Research paper

IntroductionA young scientist, Igor H. Ansoff, published his first article titled The stability of linearoscillating systems with constant time lag published in 1948 in the Journal of AppliedMechanics. If he only knew, that in 1957, he would publish the Strategies fordiversification in the Harvard Business Review later to be followed with the seminalwork on Corporate Strategy published in 1965, thus contributing to the intellectualdomain for a new field in Strategic Management.

In 2002, strategic management lost one of its early thinkers and writers, Igor Ansoff.Leaving a legacy as one of the founders of the field of strategic management, Ansoffcreated a distinctive thinking on strategic management. Surprisingly, however, only hisearly work continues to be referenced. He wrote the influential book Corporate Strategyin 1965 and after teaching at Carnegie and becoming the founding Dean of theVanderbilt School of Business, Igor Ansoff spent about 15 years in Europe teaching andconsulting. Subsequently, the US academia forgot Ansoff and, continues to cite his

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pp. 102-125

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early work. Although his early work was conceptually groundbreaking at the time, hislater work, which included empirical evidence, went largely unnoticed in the academia.Even Ansoff (1998) suggested that his later work was more relevant than his 1965 book.Moreover, his interests were more in the consulting world, which left the academic

setting with an Ansoffian gap. Ansoff was labelled as part of the planning school(Table IV) of thought in the field of strategy. However, his later work strongly suggeststhat his ideas are much more comprehensive (Al-Hadramy, 1992; Hatziantoniou, 1986;

Jaja, 1989; Lewis, 1989; Salameh, 1987; Mitiku, 1992; van der Velten, 1997; Ansoff andSullivan, 1993a, b).

Historically, there are many competing theories in the field of strategy (Barnard,1938; Hofer and Schendel, 1978; Lindblom, 1959; March and Simon, 1958; Burns andStalker, 1961; Emery and Trist, 1965; Mintzberg, 1973; Quinn, 1978) leading to adiversity of strategy-making typologies (Bourgeois and Brodwin, 1984; Chaffee, 1985;Mintzberg, 1978; Nonaka, 1988). Moreover, empirical work (Miller and Cardinal,1994; Schwenk and Schrader, 1993; Fredrickson and Mitchell, 1984; Miller and Friesen,1977, 1983; Shrivastava and Grant, 1985; Wooldridge and Floyd, 1990) has provided abroad choice of forethoughts with competing schools of strategy.

The purposeof this paper is to demonstrate that Ansoffs work permeates into a largerdomain of strategic management thought than previously suggested (Mintzberg andLampel, 1999) and further contributes to the clarification on the debate between theplanning and learning school in strategy. The planning school (Ansoff, 1991, 1994)argues that formal planning is beneficial for bothstable and unstable environments whilethe learning school prefers logical incrementalism, particularly in unstable environments(Mintzberg, 1991, 1994a, b). Criticism of the planning school failed to consider the factorof time (Brews and Hunt, 1999). Although some research suggested a weak link betweenplanning and performance (Boyd, 1991; Pearce et al., 1987), other research was critical ofthe design and methodology of early research (Thune and House, 1970; Kudla, 1980),

hence, indicating a much greater link between formal planning (Ansoff, 1991, 1994) thanpreviously argued (Mintzebrg, 1991, 1994a, b). Such studies (Pearce etal., 1987; WoodandLaForge, 1979, 1981; Fredrickson and Mitchell, 1984) utilized refined methodologies andsuggested a stronger link between planning and performance.

This paper will first provide a brief historical background, summary of Ansoffscritical concepts relevant to his later research, and finally his permeation with theschools of thought as illustrated by Mintzberg and Lampel (1999). The scope and rangeof this paper will not permit the full development of each school of strategic thought.Although the foundation of this paper is based on the integrative work by Mintzberg andLampel (1999), the author of this paper understands the limitations and potentialdifference of opinions relating to the degree and range of attributions of various schoolsof thought in strategy. Moreover, the author recognizes that there are many contributors

to the field of strategic management who will not receive adequate examination as aresult of the limited scope of the paper.

BackgroundAnsoff never fully engaged the academic establishment (Academy of Managementannual meetings); hence, he never developed the intellectual domain (promote his ideaswithin the management field) to better illustrate and defend his theoretical and empiricalpostulations. Moreover, he was never convinced about popularizing his positions

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into writings that resonate better with the wider academic world. Therefore, one maysuggest that Ansoff failed to disseminate his ideas and empirical findings into a wideracademic audience. His engineering and mathematical background was clearly evidentin his approach to writing and teaching. Thus, his 1990 book Implanting Strategic

Management often reads like an engineering book with elaborate systems analysis,hence, indicating his basic premise of thinking that strategy is complex and, therefore,requires analogous respect and approach.

Historically, Ansoffs (1957a, b, 1963, 1964, 1965) early research suggested theevolution of his suppositions which were culminated to the famous Corporate Strategybook. Based on his writings and postulations, it seems that Ashby (1960), Selznick (1957)and Simon (1957), and later Burns and Stalker (1961) and Chandler (1962) influenced histhinking and his preliminary ideas and theories. Ansoff introduced the concept ofbalancing external characteristics of the product-market strategy and internal fitbetween strategy and business resources (Ansoff, 1957a, p. 413), thus paving for therelationship of strategy and structure (Chandler, 1962), changing environmentalcontexts for organizations (Emery and Trist, 1965) and the relationship of organizationalstructure and environment (Burns and Stalker, 1961). Although Ansoff has publishedempirical findings (Ansoff and Sullivan, 1993a, b), Ansoff failed again to engage theacademic community; it was during this time where Ansoff enjoyed consulting muchmore than publishing and spreading his theories and empirical findings.

Ansoffs intensity about applicable research generated a few followers that enteredthe business world instead of pursuing academic careers, hence, by his own strategicsuccess generating the intellectual gap within academia. Nevertheless, his propositionsare infused throughout literature and popular works on key turning points of thestrategy that has given credit to his work. For example, the work by Hamel and Prahalad(1996, p. xix), clearly indicates the intellectual debt owed to Ansoff, Chandler, andAndrews. For someone who thoroughly understands Ansoffs work, it is clear that his

work filters throughout Hamels and Prahalads book. Ansoffs work is based ondeveloping an instrument to facilitate top managers aspirations to explore and exploitfuture profit potential hence competing for the future.

Summary of Ansoffs work[1]Ansoffs innovations on strategic management was to provide a methodology formanagers to analyze, systematically, the future and quantify qualitative information;then establish the managerial behaviour and capability needed to succeed vs the presentmanagerial behaviour and capability. Tables I-III illustrate his contribution andinnovation to the strategic management field. His work on strategic diagnosis facilitatedthe development of an optimal profile for firms to succeed (Table III), which wasempirically tested (Ansoff and Sullivan, 1993a, b).

The following section attempts to provide a general context about Ansoffs thoughtprocess illustrating the process between external environment changes and a firmscapability to adjust with their internal capabilities and corresponding behaviours.

History of managerial challengesIn his attempt to describe the historical context of the change process, Ansoff describesthe features of various eras starting from the Industrial Revolution to the post-industrialor post-modern era (Ansoff and McDonnell, 1990; Ansoff, 1965). His approach to explain

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Production Marketing Entrepreneurship Creativity

Turbulencescale

1 2 3 4 5

Environmentalturbulence

Repetitive Expandingslowincremental

Changing fastincremental

Discontinuouspredictable

Surprisingunpredictable

Strategicaggressiveness

Stable Reactive Anticipatory Entrepreneurial CreativeBased onpreviouscases

Incrementalbased onexperience

Incrementalbased onextrapolation

Discontinuousbased on expectedfutures

Discontinuousbased oncreativity

Responsivenessof capability Custodialsuppresseschanges

Productionadapts tochange

Marketingpursuesfamiliar change

Strategic seeks newchange Flexible seeksnovel change Table II.Suboptimal scenario


Turbulencescale

1 2 3 4 5







Stable Reactive Anticipatory Entrepreneurial Creative

Based onpreviouscases





Responsivenessof capability

Custodialsuppresseschanges



Strategic seeks newchange

Flexible seeksnovel change

Source: Ansoff and McDonnell (1990), reused with permission of the Ansoff Family Trust

Table I.Matching strategic

aggressiveness andresponsiveness of

capability withturbulence


Turbulencescale

1 2 3 4 5







Stable Reactive Anticipatory Entrepreneurial Creative

Based onpreviouscases





Responsivenessof capability

Custodialsuppresseschanges



Strategic seeks newchange

Flexible seeksnovel change Table III.

Optimal scenario

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the managerial characteristics defining firms of the respective time periods formulatesthe context to establish a domain for the change process. For example, his vividillustration of the Ford Motor Company being dominated by the production function wasthe appropriate managerial function between the years 1900 and 1930 when the

Industrial Revolution was consolidated into mass production. However, once the need ofbasic consumer goods was satisfied (i.e. Ford Motor Company and the T-model), themanagerial approach moved to a more marketing function. Although Ford MotorCompany dominated the production era, its failure to change in a timely manner allowedthe more marketing-oriented General Motors to ascend to the top of the industry in thelate 1930s. His historical reference continues with his observation of the generalaccelerated change, thus a new managerial approach capable of capturing change in atimely fashion was suggested. The early management periods were dominated byproduction first and marketing later where the change process was rather slow andmostly organic. The post-industrial period though was characterized by an affluentsociety with novel demands in a technologically fast-changing environment.This new context of managerial setting necessitated the change towards thelong-range planning approach. Lastly, he observed that firms increasingly faced rapidmarket saturation, global competition, political upheavals, increased governmentregulations, frequent industry changes, novel technologies and continuous threat ofsubstitute industries. Hence, he established a model to help managers quantifyqualitative observations about environmental shifts and provide a change managementtool sensitive to the complexity, rate, novelty and predictability of change. This led to thestrategic success hypothesis (which has been empirically validated) with thedevelopment of turbulence scales and the need for a corresponding managerialcapability and strategic orientation according to the changeability and predictability ofthe firms environment. This is the historical moment where Ansoff expandshis thinkingbeyond the formal planning to include a wider set of contingencies; thus, allowing the

managers to better understand and manage the change process as a function ofenvironmental variability, strategic behaviour (Ansoff, 1987), managerial capability andbehavioural characteristics (i.e. change is often corollary to systemic and/or behaviouralresistance to change). His work on environmental variability as a determinant of strategywas instrumental in leading effective changes in companies around the world; companiesthat utilized his services such as IBM, Northern Telecom, Bayer, Phillips, Banamex, andthe US Navy were among some of the better know organizations. Ansoffs industryexperience with strategic planning resulted in his basic postulation that includes threeprimary dimensions: strategy formulation, management capability and design, andmanagement of transformational change. Ansoffs deep understanding of the holisticapproach to strategy led him through a lifetime of improving his basic theoreticalpropositions established back in 1965. He developed a plethora of mechanisms and

approaches that organizations found relevant and applicable in real time.The next section provides a brief overview of the major concepts and approaches he

had developed that facilitate effective change. The concepts selected represent a corebasis on Ansoffs work and were fundamental in his later research (empirical work usingstrategic diagnosis). Moreover, the concepts serve as a foundation of Ansoffs work onstrategy and change. The attempt of this research effort is to utilize only the concepts ofenvironment, environmental turbulence, strategic orientation, and strategic diagnosissince they represent the foundational concepts required to bridge Ansoffs wider

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integration to a broader range of schools of thought; moreover, they also serve as alaunch base for future research.

EnvironmentThe use of this term was all inclusive and it was meant to examine economic, political,sociological, technological, geopolitical, psychological, etc. forces in the area(s) that anorganization chooses to operate. Ansoff postulated the term environment servingorganizations (ESO) as any organization that provided goods and/or services to theenvironment and consumes resources in the process. The most important contingentforce, which defines the required responses to the environment that determine thesuccess of an ESO, is the environmental turbulence.

Environmental turbulence is the combined measure of changeability andpredictability of the organizations environment (complexity, novelty, rapidity ofchange, and visibility). Ansoff divided the environment, primarily into two largecategories: historic and discontinuous. In historic environments, decisions about

the future are based on past and present events that can be extrapolated into the future.Change is incremental, predictable, and visible. In discontinuous environments, thefuture is partially visible and predictable; therefore, change is possible by using weaksignals from the environment. Lastly, the future could be completely unpredictable andinvisible; hence, changes are based on building scenarios utilizing weak environmentalsignals.

However, there are several authors that have utilized the concept of environmentalturbulence. Scholars have postulated the dependenceupon the environment(Aldrich andPfeffer, 1976; Child, 1972; Hannan and Freeman, 1989; Lawrence and Lorsch, 1967a, b;Pfeffer and Salancik, 1978; Thompson, 1967). Furthermore, the research typology hasportrayed environments primarily as stable, uncertain, complex, static, dynamic,discontinuous, and turbulent (Emery and Trist, 1965; Duncan, 1972; Lawrence and

Lorsch, 1967a, b; Post, 1978) and the variability is known as environmental turbulence.Furthermore, strategy is often determined as a result of environmental turbulence(Buchholz and Rosenthal, 1995; Carroll, 1994; Drucker, 1980; Marcus, 1993; Peery, 1995;Post, 1978; Vernon-Wortzel, 1994). In addition, Ansoff was associated with the changeprocess of mechanistic organizations (Burns and Stalker, 1961); conversely, Ansoffslater postulations suggested that he was considering a wider set of variables(i.e. behavioural, cultural, etc.) hence, rendering his postulations to fit a wider range ofstrategic thought. Ansoffs later work suggested some degree of consistency with thecontingency approach (Burns and Stalker, 1961; Woodward, 1965; Lawrence andLorsch, 1967a, b; Donaldson, 1995a) that indicates a fit between the external vs internalchanges as they relate to organizational performance. Ansoffs later postulations arguedthat organizations should apply a change process that is appropriate to their

environment and internal behaviour and dynamics, thus resisting to subscribe to theorganic evolution in turbulents environments since often there is not time for an organicadjustment and also often new organizations in turbulent settings require formalplanning (Stichcombe, 1965; Sine et al., 2006).

Strategic orientation behaviourStrategic behaviour leads to different levels of performance (Morrison and Kendall,1992). However, what type of strategic behaviour produces optimal performance?

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The typology developed by Miles and Snow (1978) provided a foundation for otherscholars of organizational behaviour interested in the relationships between strategy,structure, and process. The validity and reliability have also been affirmed as usable toexplore organizations and their strategies (Shortel and Zarac, 1990). The typology is also

consistent with theoretical and empirical studies (Ansoff, 1979; Ansoff and Sullivan,1993a, b; Hambrick, 1983; McDaniel and Kolari, 1987; Tan and Litschert, 1994;Ramaswamy et al., 1994). Moreover, in highly concentrated industries (Porter, 1980;Segev, 1989; DAveni, 1994), the strategic behaviours focusing on low costs and productdifferentiation are excellent tools; however, they offered little guidance for industries inhighly entrepreneurial, creative, and innovative settings, which are still in a pre-infancystage or have yet to form. The suggestion is that organizations employ a differentorganizational response (endogenous-driven behaviour) depending on theenvironmental (exogenous-driven process) conditions (contingency), which facilitatesthe goal of this research to associate environmental turbulence and strategic behaviourorientation to performance.

Strategic diagnosisThis is perhaps the most innovative tool Ansoff created both conceptually andpractically. It allows companies to essentially diagnose their optimal future profitpotential. The context of this analysis lays with the rapid technological changes andsudden industry shifts that generate a challenging strategic setting for mostpost-modern organizations. There is a continuous evolution of the change agenda withstrategic fads intending to provide universal prescriptions to an organizations futuresuccess with a generally low success rate. For example, total quality of management washighly successful in Japan but other cultures showed mixed results; reengineering didnot provide a process beyond the reengineered organizations; in benchmarking, firmswere told that following the best practices of the industry will likely make you successful

as well (imagine benchmarking WorldCom, Enron few years back, and other companiesreceiving accolades for their exceptional performance or the Thai Government model ofsuccess prior to 1995-1996). In short, there are no universal prescriptions for futurechallenges. As a result, Ansoff suggests that there are two key problems:

(1) Each firm must develop the capability to diagnose future challenges,opportunities, threats, weaknesses, and strengths (Ansoff and McDonnell,1990; Beam, 2001).

(2) Each firm must consider developing an in-house response mechanism to fittheir needs.

Ansoffs contribution is a tool to facilitate the translation of qualitative data intoquantitative numbers that assist managers in developing a direction. This tool is the

strategic diagnosis (Ansoff and McDonnell, 1990), which is a systematic approach todetermining the changes that have to be made to a firms strategy and its internalcapability in order to assure the organizations success in its future environment. Thisdiagnostic procedure is derived from the strategic success hypothesis and empiricalstudies. The purpose is for managers to have tools to effectively encounter therelentless changes and turbulence of their environment (Ansoff and McDonnell, 1990).Performance is optimal if strategy and capability match the environmental turbulence(Ansoff and Sullivan, 1993a, b; Pelham, 1999).

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Strategic success hypothesis states that an organizations performance potential isoptimum when the following three conditions are met:

(1) aggressiveness of the organizations strategic behaviour matches theturbulence of its environment;

(2) responsiveness of the organizations capability matches the aggressiveness ofits strategy; and

(3) the components of the organizations capability must be supportive of each other.

Table I summarizes the diagnostic instrument. Table II indicates a sub-optimalscenario and Table III indicates an optimal scenario for an organization (see tables forbetter clarity):

. Strategic aggressiveness is the strategic orientation of the general management(reactive, proactive, entrepreneurial, creative, etc.).

. Responsiveness refers to the functional orientation of the general management(production, marketing, entrepreneurial, strategic, etc.).

Table I illustrates the basic premise as proposed by Ansoff and McDonnell (1990).Tables II and III indicate two different scenarios of what potentially may happen in themarket. For example, Table II illustrates a scenario in which the firms environment isdiscontinuous but the company maintains a strategic orientation that is based on pastinformation. Hence, Ansoff argues that such a firm will display a strategic gap, whichwill correlate with suboptimal performance. This tool has been used successfully todetermine strategic success and failures in largely unpublished (Al-Hadramy, 1992;Hatziantoniou, 1986; Jaja, 1989; Lewis, 1989; Salameh, 1987; Mitiku, 1992; van der Velten,1997) and published works (Ansoff and Sullivan, 1993a, b). Those are the empiricalstudies post-1990 that define Ansoff in a broader scope and suggest his interface with

other schools of thought (Table IV).

Ansoffs interface with others schools of thought in strategic managementThe background on strategic management has a plethora of work that will be virtuallyimpossible to adequately develop within the pages of this paper. From developingindividual potential within an organization (Argyris, 1965, 1975, 1985; Argyris andSchon, 1978) to managing values (Barnard, 1938, 1948) to the pioneering work onstrategy and structures (Chandler, 1962) or the concept of strategy as a policy generator(Andrews, 1980) or to the development of effective managers (Drucker, 1954, 1964, 1969,1974), the field of strategy and surrounding disciplines have populated the literaturewith an array of theories and prescriptions. In addition, we had research on competitiveadvantage within a given industry (Porter, 1980), logical incremenatalism (Quinn, 1980),

hyper competition (DAveni, 1994, 1999; DAveni et al., 1995), and competing for thefuture (Hamel and Prahalad, 1996). Lastly, as indicated earlier, there is the greatdebate among various thinkers on the strategy-making process with a variety ofstrategy-making classifications (Barnard, 1938; Bourgeois and Brodwin, 1984; Chaffee,1985; Hofer and Schendel, 1978; Lindblom, 1959; March and Simon, 1958; Mintzberg,1973, 1978; Nonaka, 1988; Quinn, 1978).

The broad divisions of strategic management thinking are the prescriptive school ofthought (or ought to be) and the descriptive (or is) (Mintzberg and Lampel, 1999).

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Design

Planning

Positioning

Entrepreneurial

Cognitive

Sources

P.S

elznick

H.I.Ansoff

D.E.Schendeland

M.E.Porter

J.A.

Schumpeterand

A.H

.Cole

H.A.Simonan

dJ.G.March

Basediscipline

Non

e(architectureasa

met

aphor)

Somelinkstoplanning,

systemstheo

ry,and

cybernetics

Economics

(industrial

organization)an

militaryhistory

Non

e(althoughearly

writ

ingscomefrom

econ

omists)

Psychology(cognitive)

Champions

Casestudies

Professionalmanagers,

MBAs,ands

taff

experts

Analyticalstaff,

andconsulting

boutiques

Popularbusinesspress

and

individualists

Thosewithpsychological

bent,pessimis

tsinone

wing,andoptimistsonthe

other

Intendedmessage

Fit

Formalize

Analyze

Env

ision

Copeorcreate

Ansoffsturbulence

scaleasitappliesto

eachschoolof

thought

1-3Org

anizationscanstudy

pastproblemsand

prescribeaction

1-3Speedofchangeallows

timetoplanand

respond

1-3Speedofchangeis

fastbutstillwith

adequatetimeto

respond

4-5Env

ironmentsare

discontinuousand

surp

rising,

entrepreneurialapproach

isneeded

1-5Alllevelsare

possibilities

Realizedmessage

Think(strategymakingas

aca

sestudy)

Program(ratherthan

formulate)

Calculate(rather

thancreateor

commit)

Centralize(thenhope)

Worry(being

unableto

copeineither

case)

Schoolcategory

Prescriptive

Prescriptive

Prescriptive

Descriptive(some

pres

criptive)

Descriptive

Associatedhomily

LookBeforeyouLeap

Astitchintimesaves

time

Nothinbutthe

factsmaam

Takeustoyourleader

IllseeitwhenIbelieveit

(continued)

Table IV.Ansoff with all theschools of thought asdescribed by Mintzbergand Lampel (1999)

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Learning

Power

Cultural

Environmental

Configuration

Sources

C.E.Lindblom,R.M.March,

K.E

.Weick,C.K.Prahald

and

GHamel

G.T.Allison,

J.Pfeffer,

G.R.Salancik

and

W.G.Astley

E.Rhenmanand

R.Normann

M.T

.Hannanand

J.Freeman(contingency

theo

rists)

A.D.Chandler

,

H.Mintzberg,

R.E.Miles,

andC.C.Snow

Basediscipline

Non

e(perhapssome

peripherallinkstolearning

theoryandpsychology

and

education).Chaos

theoryandmathematics

Politicalscience

Anthropology

Biology

History

Champions

Peoplewholikepower,

politics,andconspiracy

Peoplewholikethe

social,thespiritual,and

thecollective

Population

ecologistsand

someorganization

theorists

Populationecologists

Lumbersand

integrators

ingeneral,changeagents.

Configuration

(Holland)vs

transformers(USA)

Intendedmessage

Learn

Promote

Coalesce

React

Integrateand

transform

Ansoffsturbulence

scale

Lev

els1-3

Tho

searethelevelswhere

pow

ercouldexperiment

withnewstrategicareas

and

developnew

innovativeideas

Levels1-3

Thosearethelevels

wherepower

couldbe

usedtoadvancea

changeagenda

Levels1-3

Reaching

consensusrequires

ampletime

Levels1-3

Organicadaptationis

subjecttoadequatetime

Levels1-5

Dependingon

the

environmentaldemands,

theorganization

formulatesa

contingency

plan

Realizedmessage

Play(ratherthanpursue)

Hoard(ratherthan

change)

Perpetuate(rather

thanchange)

Capitulate(ratherthan

confront)

Lump(rather

thansplit,

adapt)

Schoolcategory

Des

criptive

Descriptive

Descriptive

Descriptive

Descriptivean

d

prescriptive

Associatedhomily

Ifyoufirstdontsucceed,

try,

try,again

Lookoutfornumber

one

Anapplenever

fallsfarfromthe

tree

Ita

lldepends

Toeverythingthereisa

reason[.

.

.

]

Source:MintzbergandLampel(1999)withAnsoffinserted

Table IV.

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The Ansoff school of thought is environment driven; hence, Ansoff believed in what issince the environment directs your response; but he also proposed a responsemechanism (what ought to be) based on the environment the organization is operatingunder. Hence, the value of understanding how Ansoff interfaces with other schools of

thought rests with the premise that Ansoff is much more dynamic and comprehensivethan previously labelled. His strategic diagnosis instrument provides a launch base toaccommodate much wider external and internal settings; from stable to highlyturbulent, hence, Ansoff dynamism.

The next section will provide a brief overview of each school of strategy as describedby Mintzberg and Lampel (1999) and integrate how Ansoffs work interfaces with eachschool of thought.

Design schoolThis is one of the original perspectives, which views strategy as a fit between internalstrengths and weaknesses and external threats and opportunities (Chandler, 1962;

Selznick, 1957). It is commonly known in literature as the strengths, weaknesses,opportunities, and threats (SWOT) analysis. Case studies were the primary tool todevelop policy and strategy.

Ansoffs connectionAnsoff suggested precisely the basic premise of the design school since his basicargument is that external turbulence must be matched by corresponding internalcapability and behaviour to respond. For example, if the environment (externalopportunity) is dominated by marketing, then, internally, the organization must havethe necessary managerial capability to respond (Dobni and Luffman, 2000, 2003).In Table III, the suggestion is that the optimal scenario is that strategic orientation andmanagerial responsiveness are also at level 3. The founder of Apple Computers, Steve

Jobs, became an oddity within his own company in the mid-1980s when the computerindustry moved to a marketing-oriented setting. Mr Jobs wanted to continue withcutting-edge technologies. On Ansoffs scale, the environment of Apple Computers hadmoved to level 3 (dominated by marketing price sensitive) while the strategicorientation of Steve Jobs remain at level 5 (creativity), hence, creating the gap. At thetime, Apple Computers hired the former Chief Executive Officer (CEO) of Pepsi(a marketing expert), which made perfect sense since the personal computer market hadmoved into a marketing-oriented setting. Moreover, it is not accidental that Steve Jobsreturned to Apple when the company developed a need to move into the cuttingedge of technology again; hence, the fit of Steve Jobss strategic aggressiveness andresponsiveness matched the new environmental conditions (i products).

For levels 1-3, Ansoff suggests that a SWOT approach is appropriate considering

that the environmental conditions are changing at a speed with which the firm can copeadequately. Generally, levels 1-3 are dominated with organizations attempting toachieve economies of scale (repetition, productivity, and incremental changes to theproduct/service) as well as competing on price/marketing appeal. Thus, the SWOTanalysis is an excellent tool for low-level turbulence. Ansoff has labelled levels 1 through3asthe incremental environment. The principle of fit is suggested when using Table I,which clearly provides a tool to establish the fit between external changes and internalcapabilities. Moreover, the premise of levels 1-3 is the time availability for change,

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hence the indication of the case approach to strategy in extrapolative environments(levels 1-3). Lastly, Ansoff suggested that the SWOT analysis is contained within anindustry and cannot be used as a tool to anticipate changes that are external to theindustry. Classically, Ansoff referred to the ever-increasing market share and

production efficiency of companies in the horse carriage industry at the time of thediscovery of the combustion engine; and, how managers fail to see the emergence of anew technology. Similarly, he talked about the discovery of transistors at the time ofvacuum tubes and more recently, the failure of communication companies to move intowireless technology, thus, maintaining a level 4 or 5 behaviours and capability.Deservedly so, he predicted that companies such as AT&T or IBM would not survive asthey were unless they developed levels 4 and 5 strategic behaviour and organizationalresponsiveness. His prediction of AT&T (break up) and IBM (Microsoft and Lenovo) isstrategically consistent with his forecasts.

Planning schoolThis is the school of thought that evolved from the early diversification thinking thatwas entering the industries in the 1950s. The assumptions were that the externalsettings were changing rather slowly, hence, allowing time for the strategic process to bedecomposed into small formal steps. Therefore, the process is more formal than rational(Chandler, 1962; Ansoff, 1965).

Ansoffs connectionThis is the attribution given of most authors regarding Ansoffs work. However, thescale created by Ansoff has clearly indicated that the environment at turbulence levels 4and 5 indicates high complexity, high speed of change, and unpredictability (Table I);hence, a different set of strategic orientation and managerial responsiveness. Moreover,Ansoff realized that the speed of change will not allow the planning process to take place

in the traditional sense; thus, he had created other tools to facilitate sudden changes inthe environment. For example, the issue management approach and crisis mode are acouple of Ansoffian tools used in discontinuous settings (Ansoff and McDonnell, 1990).Moreover, he had indicated the translation of emerging weak signals in the firmsenvironment into progressive action, hence, develop the appropriate managerialcapability and strategic orientation. Ansoff spent his latter years concerned with theenvironments, which were unpredictable, complex, and discontinuous. His unpublishedbook-paper on strategic leadership (Ansoff and Sullivan, 1992) was an attempt toestablish some parameters for the top management in discontinuous environments.If there is a plenty of time to change (low turbulence 1-2), with corresponding powerstructures, managerial climate, competence and capacity, then, a formal approach issuggested. However, he realized that management must be capable to analyze, cope, and

create as a derivative of the environmental turbulence; hence, the premise that Ansoff isonly part of the planning school of thought is incomplete.

Positioning schoolIn this view, formalized analysis of industries provides generic positions (Porter, 1980;DAveni et al., 1995). Porters view still dominates the strategy texts with the three basicapproaches: standardization, differentiation, and focused strategies along with the fiveforces model.

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Ansoffs connectionThe turbulence scale matches up nicely with Porters positioning school for levels 1-3.The changes are generally predictable based on industry analysis. Predictable, hence theestablishment of Porters primary three strategies (low cost, differentiation, and focus).

For example, the standardization approach is based on an incrementally expandingenvironment, hence the dominant strategic behaviour of managers needed for thissetting is incremental experience (diminishing costs, learning curves, and reduction ofcost), and the managerial capability is dominated by the capability of managers togenerate better standardization. Correspondingly, the differentiation strategy is amarketing-based approach (got to let the customer know about our differentiatedproduct, price, service, etc.). When the environment shifts, though, to highly turbulent(Ansoffs scales 4 and 5), Porters approach is limited to searching for focuseddifferentiation. Porters approach leaves little room for strategy when industries are atan infancy or incubation period (biotech industry 15-20 years ago). Ansoffs instrumentaddresses the cost-based environment (usually levels 1 and/or 2) and the differentiatedenvironment (level 3). The premise of Porters approach is based on an existing industry

(hence, levels 1-3) while Ansoff provides additionally a tool for emerging and novelindustries (levels 4 and 5) accommodating highly dynamic and volatile settings(Chakravarthy, 1997).

EntrepreneurialThis school of thought centered the process on the chief executive. This shifted theprocess from steps and design to envisioning (Cole, 1959). Although every organizationhas a vision, this school of thought relied on the leader to have the vision and thecapability to implement it. Unlike the planning school, it relied on the leaders intuition.

Ansoffs connection

Levels 4 and 5 on the turbulence scale are clearly indicative of Ansoffs fit to theEntrepreneurial school of thought. Considering that an entrepreneur is working inenvironments ranging from partially predictable to surprising and unpredictable,Ansoff indicated that the entrepreneurial and/or creative behaviours are the criticalelements in levels of high turbulence (Calantone et al., 2003). Vision, flexibility, andleadership are the characteristics of a CEO to navigate the turbulent settings. This doesnot diminish the importance of a CEO in levels 1-3; however, the incremental nature oflevels 1 through 3 requires a less entrepreneurial approach. Hence, Ansoffs scale alsoprovides a process for partially predictable and surprising situations as is the case of theentrepreneurial environment.

Cognitive school

Strategies are developed in peoples minds. Thus, cognition as information processing,knowledge structure mapping, and concept attainment facilitate the strategy formation(March and Simon, 1958; Simon, 1957; March, 1965, 1988).

Ansoffs connectionThe managerial perception of environmental turbulence determines the establishmentof the turbulence intensity. The method used by top management within an organizationto filter the external elements establishes the capability of top management to accurately

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measure the intensity of the turbulence. Ansoff indicates that top managers routinelygenerate their own cognition since they interpret environmental signals differently(knowledge structure mapping), hence, generating different strategic directions. Hisapproach also cautioned top management about filtered information rising through the

ranks when attempting to develop accurate perceptions (cognition) of the environmentalturbulence. Ansoff identified the surveillance, mentality, and power filters as elementsthat top management must be aware of when gathering information (Ansoff andSullivan, 1993b). For example, IBM and Microsoft in the early 1980s perceived, verydifferently the evolution of computer software, thus, generating different directions.The environment was the same for both companies but strategic decisions/perceptionswere different (Ansoff and Sullivan, 1993a, b; Burgelman and Grove, 1996).Metaphorically, the weather was the same; they just decided to dress differently.Ansoff has strongly indicated that the scales he developed rely largely on the capabilityof the top management in an organization to accurately perceive the turbulence in orderto develop the appropriate strategy and capability. It is highly likely for two executivesto view the same environment and arrive at different conclusions.

Learning schoolHere, strategies are emergent; strategists are found throughout the organization;formulation and implementation of strategy intermingle (Lindblom, 1959; Weick, 1979;Hamel and Prahalad, 1996). This descriptive school of thought challenged earlierversions of the planning school and within this school of thought people were inclined toexperiment with ambiguity and adaptability, thus, providing an environment conduciveto learning. However, learning requires time and environments characterized with highturbulence require immediate response; therefore, this school of thought is subject totime available.

Ansoffs connectionThe learning school is appropriate for levels 1-3 considering that time is the criticalelement to mount an effective response. The weak signal (Ansoff and McDonnell, 1990)tool offers a graduated response mechanism where the firm will scan the environment,identify potential emerging threats, and develop a knowledge base (learning) while theissue management (Ansoff and McDonnell, 1990) approach provides a mechanism toclassify emerging issues according to their urgency and priority, consequently, allowingtop management to generate an effective strategy-response (learn) in a timely manner.

Power schoolStrategy is a process that involves bargaining, persuasion, and confrontation amongstakeholders/actors who possess power within the organization. Externally, power over

partners and stakeholders is used to negotiate favourable strategies (Allison, 1971;Pfeffer and Salancik, 1978; Astley, 1984).

Ansoffs connectionHighly turbulent environments cannot afford the luxury of politics and posturing withinthe organization. High turbulence indicates a rapidly changing environment characterizedby entrepreneurship and creativity, thus the learning schools basic premise can only findapplications in incremental environments (1-3). Ansoff has indicated that incremental

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levels where change is slower could be dominated by politics. If politics are dominant, thepower structure and process are the critical elements in mounting effective responses. Forexample, a highly decentralized company (multinationals) requires a consensual approachto strategic response. Ansoff dedicated a considerable portion of his work to illustrate the

power domains internally and externally within an organization. Moreover, he analyzedthe aspirations and possible coalitions between external and internal stakeholders.Furthermore, he pointed to the impact of the rules of the game (regulations and legislation)and the need of organizations to build legitimate strategies as tools to influence the rules ofthe game (hence, the importance of power and the political process). In his unpublishedwork (1992), he has identified the power sources, structure, and processes in developingeffective tools for managing organizations. The underlying assumption in his unpublishedwork along with all of his early 1990s work is that managerial capability and behaviourmust accommodate the demands of the environment. In this case, if a firm is in a highlyturbulent regulatory and/or legislative setting, managers must have the correspondingcapability and behaviour to cope. In this instance, political power, structure, and processbecome a critical strategic characteristic as a tool to establish persuasion avenues among

stakeholders (both external and internal) to negotiate the favourable strategies. Moreover,he suggested modes of managing resistance to change and clearly delineated thedifference between systemic and behavioural resistance. The elements of resistance tochange as a function of time, management response to surprising changes, strategic issuemanagement, and weak signals are some of the tools employed by Ansoff to counter aneffective response to the variation of power.

Cultural schoolThis school of thought focuses on common interests and integration. Strategy is asocial process rooted in culture (Rhenman, 1973; Normann, 1977). This school suggeststhe dual role of culture; it is notably a strategic change deterrent, but also serves as a

change agent. It became central to strategic thinking as a result of the cultural impactderived from Japanese style management.

Ansoffs connectionAnsoff indicated that some organizations, where power is decentralized, the bargainingprocess dominates persuasion and development of consensus. Such organizations areinstitutions of higher education where dispersed power, bargaining, and consensus aredominant features. Change is slow and laborious. Such organizations can competeeffectively only in levels of turbulence 1 and/or 2 andperhaps 3. A crisis, though, providesleadership an opportunity to bypass the bargaining approach and the consensus cultureto take action to save the organization (usually).

Environmental schoolThis school of thought suggests, given the environmental conditions, that an organizationmaneuvers accordingly in order to respond effectively (Hannan and Freeman, 1977).As indicated earlier, environmental variation has an impact on the strategy formulation(Aldrich and Pfeffer, 1976; Child, 1972; Hannan and Freeman, 1989; Lawrence and Lorsch,1967a, b; Pfeffer and Salancik, 1978; Thompson, 1967). Strategy is often determined as aresult of environmental turbulence (Buchholz and Rosenthal, 1995; Carroll, 1994; Drucker,1980; Marcus, 1993; Peery, 1995; Post, 1978; Vernon-Wortzel, 1994).

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Ansoffs connectionClearly, this is consistent with Ansoffs work. The turbulence scale is an instrumentthat facilitates top managers to analyze external conditions and maneuver accordingly.It is very surprising not to see Ansoff associated with this school of thought. This

research was also published in 1993 (Ansoff and Sullivan), however, as indicated at thebeginning of this paper, Ansoff is routinely quoted for his 1965 work only. Ansoffspremise has maintained that given the environmental conditions, the firm mustestablish the appropriate strategic aggressiveness and managerial responsiveness.Metaphorically, you have to dress for the occasion and the weather.

Configuration schoolLastly, this school of thought is broader and integrative since it considers on one handorganizations as a collection of attributes and behaviours but also integrates thesuggestions of other schools. For example, the positioning school explores the changeswithin an industry; hence, changes are incremental, thus, this represents oneconfiguration. On the other hand, an entrepreneurial setting suggests a transformativeapproach, and therefore, a different configuration. Consequently, the configurationschool provides the more integrative approach (Chandler, 1962; Miles and Snow, 1978;Mintzebrg, 1979; Miller and Friesen, 1984).

Ansoffs connectionThe strategic diagnosis is precisely a tool that allows firms to configure their strategybased on their specific external demands (stable to highly turbulent). Tables I-III clearlyindicate the options for firms not only to configure their strategy but also to develop anoptimal posture, again, based on the intensity of the external setting and whether thefirm has the corresponding managerial capability and strategic orientation. Hence,Ansoffs approach is about configuring continuously, thus confirming his basic premise

illustrated in his definition of the strategic diagnosis that each firm must considerdeveloping an in-house response mechanism to fit their needs.

SummaryTable IV summarizing the various schools of thought that represent the main stream instrategic thinking. Table IV has summarized all the main authors in each school, basedisciplines (from where each approach derived), tools used (champions), and theintended messages. In addition, Table IV indicates how Ansoffs turbulence scale willmatch each school of thought. Identifying the respective turbulence levels suggests(based on Ansoff) the corresponding strategic orientation and organizationalresponsiveness. Therefore, the most critical element in strategic design, perhaps, isthe capability of top management to have an acute knowledge of the complexity of an

organizations environment, novelty of the challenges, rapidity of change, and degreeof future visibility (Ansoffs basic elements constructing the turbulence scale).Furthermore, the overriding theme in the strategy debate is the whether the planningor learning approach is more effective.

In addition, Figure 1 shows the basic premise (Mintzberg and Lampel, 1999) of thestrategy used in relation to external world vs the internal process. However, this does notaccount for a critical factor: time. This is an important distinction in Ansoffs work thatresearch has not explored adequately. For example, Figure 1 shows that when

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the external world is unpredictable and confusing, then the learning school is anappropriate approach. However, when the environment is fast changing (function oft),then there is no time for the company to learn or engage in lengthy political posturingand then engage in effective change. A similar argument could be made for the cognitiveand power school of thought. Again, the time factor will determine the degree ofunpredictability and confusion (according to Mintzberg and Lampel) and establish the

required response. Hence, unpredictable environments require a correspondingmanagerial aggressiveness and capability (Table II). Figure 2 shows an alternativeapproach when considering that levels 1-3 are incremental and with the implication thatthere is time to change; while levels 4-5 are characterized as fast paced, unpredictable,and possess minimal or no time available.

DiscussionTable IV is an indication of Ansoffs comprehensive approach to strategyaccommodating, potentially, a much wider range of schools of thought in strategy.In his book Corporate Strategy (1965), Ansoff developed the prescriptions, however, hislater work and book on Implanting Strategic Management (1990) was instrumental in

providing organizations research-based methods to achieve the needed change. Thelimitations of pages are restricting this paper to write only selective contributions ofAnsoff; however, he spent his last 30-35 years refining his basic premise as it wasdeveloped in 1965 with concepts such as the diagnostic procedure (Ansoff et al.,1974), organizational capability (Ansoff, 1978), applied theory of strategic behavior(1979), strategic myopia (1984), and real-time response (Ansoff and McDonnell, 1990;Ansoff et al., 1980) are among the plethora of tools to facilitate strategy. His holisticapproach to strategy can only be characterized by ubiquity.

Figure 1.Strategy formationas many processes (fromMintzberg and Lampel,1999)

Environmental

Cultural

Cognitive

Learning

Power (micro)

Configuration

Power (macro)

Design Entrepreneurial

Positioning

Planning

Internal process as

Source: Mintzberg et al. (2003). Printed and electronically reproduced

by permission of Pearson Education, Inc., Upper Saddle River, N.J

Rational Natural

Externalworldas

Comprehensible,

controllable

U

npredictable,

confusing

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The Economist (2008) praises Ansoff as one of the management gurus in a historicalseries of strategic experts from Sun Tze and Machiavelli to the modern era. Hiscontributions to the field of strategy provide the intellectual domain for many strategythinkers to follow and espouse some of his basic premises to create not only an academicdiscipline but a critical function in the corporate setting. Undeniably, organizationstoday have incorporated his original thinking of strategic, operational, andadministrative work. His last major contribution was his 1990 book where he not

only provided the intellectual area but also unpublished empirical results point to a moreholistic and comprehensive work. For example, unpublished empirical results inbanking predicted which banks were underperforming because of the gaps betweenenvironmental demands and internal capability and strategic aggressiveness; thosebanks were forced to merge or close down (Lewis, 1989).

Lastly, when studying Ansoffs work, it is evident after a while that it is a giant puzzlethat requires assembly to see the entire picture and how all the pieces work together. It isa fairly large puzzle and any attempt to provide an assessment of the holistic picture ofstrategic transformation without all the pieces is simply an incomplete attempt andunjust to Ansoffs approach and work. Moreover, Ansoffs lack of any desire topopularize his writings and provide a foundation to invite researchers and a wider bodyof the academia to engage his thinking pushed his writings on the periphery of core

research agenda. Nevertheless, his approach to strategy from a holistic point of view andthe multiple tools provide a contingency approach to strategic solutions for everyone.There is no universal prescription for success (Ansoff and Sullivan, 1993a, b); hence,different success behaviours are required at different levels of turbulence.

Future research should continue on utilizing the strategic diagnosis not only tofurther validation but also as a tool that facilitates the development of an optimalstrategic posture for future profitability. In addition, research on managerial perceptionof environmental turbulence as a guiding post for strategic orientation will shed light

Figure 2.Strategy formationas many processes

(Ansoff interface)

Externalworldas

Incremental

Discontinuous

Internal process as

Stable Creative

Environmental

Entrepreneurial

Configuration

Cognitive

Environmental

Configuration

Learning

Power

Cultural

Positioning

Planning

Levels 1-3 Levels 4-5

Environmental

Entrepreneurial

Configuration

Cognitive

Environmental

Entrepreneurial

Configuration

Cognitive

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into the psychology of top management as it relates to making decisions. Theenvironment (external settings weather) is the same but top managers choose to followdifferent paths of strategy; hence, managerial perception of success differs. Therefore,additional research on what drives managers to perceive environmental turbulence as

fast or slow remains to be explored. Moreover, additional research is needed that focusesexclusively on the Ansoffs work on discontinuous settings (dynamic environments) inorder for academics to perceive Ansoff beyond the planning school of strategy.

Note

1. To avoid redundancy with references, the summary of Ansoffs work is based on theCorporate Strategy (1965) and Implanting Strategic Management (1990) (with McDonnell)which are the most comprehensive works of Ansoff.

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Argyris, C. (1957), Personality and Organization, Harper & Row, New York, NY.

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Schumpeter, J.A. (1934), The Theory of Economic Development, Harvard University Press,Cambridge, MA.

Corresponding authorRobert Moussetis can be contacted at: [email protected]

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