The Strategic Management Beast

We are the blind people and strategy formation is our elephant.
The next ten

chapters describe ten parts of our strategy-formation
• The Design School:

• Strategy formation as a process of conception.
• The Planning School:
o Strategy formation as a formal process.
• The Positioning School:
o Strategy formation as an analytical process.
• The Entrepreneurial School:
o Strategy formation as a visionary process.
• The Cognitive School:
o Strategy formation as a mental process.
• The Learning School:
o Strategy formation as an emergent process.
• The Power School:
o Strategy formation as a process of negotiation.
• The Cultural School:
o Strategy formation as a collective process.
• The Environmental School:
o Strategy formation as a relative process.
• The Configuration School:
o Strategy formation as a process of transformation.
That school was somewhat displaced in the 1980s by the third prescriptive school, less
concerned with the process of strategy formation than with the actual content of strategy.
Cause it focuses on the selection of strategic positions in the economic marketplace.
The six schools that follow consider specific aspects of the process of strategy formation,
and have been concerned less with prescribing ideal strategic behavior than with
describing how strategies do, in fact, get made.
Some prominent writers have long associated strategy with entrepreneurs/up, and have
described the process in terms of the creation of vision by the great leader. But if strategy
can be personalized vision, the n strategy formation has also to be understood as the
process of concept attainment in a person's head. Each of the four schools that follow has
tried to open up the process of strategy formation beyond the individual, to other forces
and other actors. In contrast to this is another school of though t that considers strategy
formation to be rooted in the culture of the organization. Our final group contains but one
school, although it could be argued that this school really combines the others.
Plain different stages in the development of organizational strategies.
At the limit, strategy formation is no t just about values and vision, competences and
capabilities, but also about the military and the Moonies, crisis and commitment,
organizational learning and punctuated equilibrium, industrial organization and social
revolution. There is a terrible bias in today's management literature toward the current,
the latest, the "hottest." Ours is a review of the evolution as well as the current state of
this field. Later in this book we argue that ignorance of an organization's past can
undermine the development of strategies for its future. The same is true for the field of
strategic management.
Five Ps for Strategy

The word strategy has been around for a long time. The word strategy is so influential.
Most of the standard textbooks on strategy offer that definition, usually presented in the
introductory chapter, more or less as follows: "top management's plans to attain
outcomes consistent with the organization's missions and goals". Strategy is a pattern,
that is, consistency in behavior over time.
We can call one intended strategy and the other realized strategy. The important question
thus becomes: must realized strategies always have.
(That intended strategies are no t always realized is all too evident in practice.)
Just ask those people who happily described their (realized) strategies over the past five
year are what their intended strategies were five years earlier. Were they the same? Those
that are not realized at all can be called unrealized strategies. The planning school, for
example, recognizes both, wit h an obvious preference for the former. An umbrella
strategy, for example, means that the broad outlines are deliberate (such as to move up
market), while the details are allowed to emerge en rout (when, where
The real difference between these people is in how they implicitly define the content of
strategy.
To some people, strategy is a position, namely the locating of particular.
As out—to the external marketplace. As perspective, in contrast, strategy looks in—
inside the organization, indeed, inside the heads of the strategists, but it also looks up—to
the grand vision of the enterprise.
McDonald's introduced Egg Mc • Muffin successfully because the new position was
consistent with the existing perspective. Here the real strategy (as plan, that is, the real
intention) is the threat, no t the expansion itself, and as such is a ploy-
As we shall see, the relationships between the m are varied, although some of the schools
have their preferences—for example, plan in the planning school, position in the
positioning school, perspective in the entrepreneurial school, pattern in the learning
school, ploy in parts of the power school.
There may no t be one simple definition of strategy, but there are by now some general
areas of agreement about the nature of strategy. The accompanying box summarizes
these.
Strategies for Better and for Worse
1. "Strategy sets direction."

The main role of strategy is to chart the course of an organization in order for it to sail
cohesively through its environment.
2. "Strategy focuses effort."
Strategy promotes coordination of activity.
THE STRATEGY BEAST: AREAS OF AGREEMENT
 Strategy concerns both organization and environment. The organization uses

strategy to deal with changing environments."
 The substance of strategy is complex.
 Strategy affects overall welfare of the organization. Strategic decisions
 Strategy involves issues of both content and process.
 Strategies are not purely deliberate. • Strategies exist on different levels. corporate
strategy
 Strategy involves various thought processes. Strategy involves conceptual as well
as analytical exercises. A given strategy can become too heavily embedded in the
fabric of the organization.
3. "Strategy defines the organization."

Strategy provides meaning, plus a convenient way to comprehend what the organization
does.
4. "Strategy provides consistency."
That is the price of having a strategy. Strategy, as mental set, can blind the organization
to its own outdated- ness. STRATEGY ABSENCE AS VIRTUE
Strategy absence need not be associated with organizational failure. Deliberate building
in of strategy absence may promote flexibility in an organization.... first three schools
(design, planning, and positioning).
The Companies which exits in Pakistan are using these strategies

that are:
 McDonald
 Ufone
 Manufacture of fan industry in Gujarat.

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What are the three main schools of strategy discussed in the passage?

What are some areas of agreement about the nature of strategy according to the passage?

We are the blind people and strategy formation is our elephant.

The next ten

• The Design School:

Five Ps for Strategy

Strategies for Better and for Worse

1. "Strategy sets direction."

THE STRATEGY BEAST: AREAS OF AGREEMENT

 Strategy concerns both organization and environment. The organization uses

3. "Strategy defines the organization."

The Companies which exits in Pakistan are using these strategies

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