Chapter 1: Introduction
Prescriptive schools: concerned with how strategies should be
formulated and not so much with how they form.
1. The design school: strategy formation as a process of
conception
2. The planning school: “ as a detached and formal process
3. The positioning school: “ as an analytical process. Less
concerned with the process of strategy formation than with
the actual content of strategies.
Descriptive Schools: Describing how strategies do, in fact, get
made.
4. The entrepreneurial School: ‘’ as a visionary process
5. The cognitive school: ‘’ as a mental process. Seeks to use the
messages of cognitive psychology to enter the strategist’s
mind.
6. The Learning School: ‘’ as an emergent process. World is too
complex to allow strategies to be developed all at once as
clear plans or visions. Strategies must emerge in small steps.
7. The Power School: ‘’ as a process of negotiation. Similar to the
learning school, but with a different twist. Treats strategy
formation as a process of negotiation, whether by conflicting
groups within a organisation or by organisation themselves as
they confront their external environments.
8. The cultural School: ‘’ as a collective process. Strategy
formation is rooted in the culture of the organisation and
hence, the process is viewed as fundamentally collective and
cooperative.
9. The environmental School: ‘’ as a reactive process. Strategy
formation is a reactive process in which the initiative lies not
inside the organisation, but with its external context.
10. The Configuration School: ‘’ as a process of
transformation. Combines the other schools. Cluster the
various elements of strategy making, the content, the
structure of the organisation and its context into distinct
stages.
Five Ps for Strategy
Strategy requires a number of definitions, five in particular
1. Plans: A direction, a course of action into the future, a path to
get from here to here (looking ahead - intended). Planning
School
2. Pattern: Consistency in behaviour over time. What has the
organisation actually done in the past (looking behind –
realised). Learning School
3. Position: locating of particular products in particular markets.
(McDonalds’s Egg McMuffin). Looks at the exact position and
out to the external market place (down and out). Positioning
School
, 4. Perspective: an organisation’s fundamental way of doing
things. This is its theory of business. Looks inside the
organisation, inside the heads of the strategists and to the
grand vision of the organisation (inside and up).
Entrepreneurial School
5. Ploy: a specific manoeuvre intended to outwit an opponent or
competitor. Power School
Actions that are fully realised are deliberate strategies. Those
that are not realised at all can be called unrealised strategies.
Then there is the emergent strategy: a pattern is realised that
was not expressly intended. Actions were taken which
converged over time to some sort of consistency.
Purely deliberate strategies imply no learning, while emergent
strategies mean no control. Strategies have to be formed and
formulated.
An umbrella strategy means that the broad outlines are
deliberate, while the details are allowed to emerge en route.
Strategies: advantages and disadvantages
1. Strategy sets direction
Advantage: Main role of strategy is to chart the course of an
organisation so it can operate cohesively
Disadvantage: Can serve as a set of blinders to hide potential
dangers. Setting out on a predetermined course in unknown
waters is the perfect way to sail into an iceberg
2. Strategy focuses effort
Advantage: Strategy promotes coordination of activity. Chaos
could ensure otherwise
Disadvantage: Groupthink arises. There may be no peripheral
vision to open other possibilities.
3. Strategy defines the organisation
Advantage: Strategy provides people with a shorthand way to
understand their organisation and to distinguish it from others
Disadvantage: To define a organisation to sharply may also
mean to define it too simply, sometimes to the point of
stereotyping. The rich complexity may be lost
4. Strategy provides consistency
Advantage: Strategy is needed to reduce ambiguity and
provide order.
Disadvantage: Creativity thrives on inconsistency
Strategies are to organisations what blinders are to horses:
they keep them going in a straight line but hardly encourage
peripheral vision.
Areas of agreement
Strategy concerns both organisation and environment: The
organisation uses strategy to deal with changing
environments.
, The substance of strategy is complex
Strategy affects overall welfare of the organisation
Strategy involves issues of both content and process.
Strategies are not purely deliberate
Strategies exist on different levels. (corporate
strategy/business strategy)
Strategy involves various thought processes
Chapter 2: The design School
Proposes a model of strategy making that seeks to attain a
match/fit, between internal capabilities and external
possibilities. (SWOT)
The model places primary emphasis on the appraisals of the
external and internal situations, the former uncovering threats
and opportunities in the environment, the latter revealing
strengths and weaknesses of the organisations
Two other important factors in strategy making: i) managerial
values, that is the beliefs and preferences of those who
formally lead the organisation and ii) social responsibilities,
specifically the ethics of the society in which the organisation
functions.
On the actual generation of strategies, little has been written.
One just evaluates different strategies and chooses the best
one. The strategy has to meet:
1. Consistency: consistent with goals and policies.
2. Consonance: must represent an adaptive response to the
external environment and to the critical changes occurring
within it.
3. Advantage: must provide for the creation and/or maintenance
of a competitive advantage.
4. Feasibility: the strategy must neither overtax available
resources nor create unsolvable subproblems.
Once a strategy has been agreed upon, it is then
implemented.
The school has not developed so much as provide the basis for
developments in other schools.
Premises
Strategy formation should be a deliberate process of
conscious thought: Action must flow from reason. Effective
strategies derive from a tightly controlled process of human
thinking.
Responsibility for that control and consciousness must rest
with the CEO: that person is the strategist.
The model of strategy formation must be kept simple and
informal: one way to ensure that strategy is controlled in one
mind is to keep the process simple. Elaboration and
formalisation will sap the model of its essence.
Prescriptive schools: concerned with how strategies should be
formulated and not so much with how they form.
1. The design school: strategy formation as a process of
conception
2. The planning school: “ as a detached and formal process
3. The positioning school: “ as an analytical process. Less
concerned with the process of strategy formation than with
the actual content of strategies.
Descriptive Schools: Describing how strategies do, in fact, get
made.
4. The entrepreneurial School: ‘’ as a visionary process
5. The cognitive school: ‘’ as a mental process. Seeks to use the
messages of cognitive psychology to enter the strategist’s
mind.
6. The Learning School: ‘’ as an emergent process. World is too
complex to allow strategies to be developed all at once as
clear plans or visions. Strategies must emerge in small steps.
7. The Power School: ‘’ as a process of negotiation. Similar to the
learning school, but with a different twist. Treats strategy
formation as a process of negotiation, whether by conflicting
groups within a organisation or by organisation themselves as
they confront their external environments.
8. The cultural School: ‘’ as a collective process. Strategy
formation is rooted in the culture of the organisation and
hence, the process is viewed as fundamentally collective and
cooperative.
9. The environmental School: ‘’ as a reactive process. Strategy
formation is a reactive process in which the initiative lies not
inside the organisation, but with its external context.
10. The Configuration School: ‘’ as a process of
transformation. Combines the other schools. Cluster the
various elements of strategy making, the content, the
structure of the organisation and its context into distinct
stages.
Five Ps for Strategy
Strategy requires a number of definitions, five in particular
1. Plans: A direction, a course of action into the future, a path to
get from here to here (looking ahead - intended). Planning
School
2. Pattern: Consistency in behaviour over time. What has the
organisation actually done in the past (looking behind –
realised). Learning School
3. Position: locating of particular products in particular markets.
(McDonalds’s Egg McMuffin). Looks at the exact position and
out to the external market place (down and out). Positioning
School
, 4. Perspective: an organisation’s fundamental way of doing
things. This is its theory of business. Looks inside the
organisation, inside the heads of the strategists and to the
grand vision of the organisation (inside and up).
Entrepreneurial School
5. Ploy: a specific manoeuvre intended to outwit an opponent or
competitor. Power School
Actions that are fully realised are deliberate strategies. Those
that are not realised at all can be called unrealised strategies.
Then there is the emergent strategy: a pattern is realised that
was not expressly intended. Actions were taken which
converged over time to some sort of consistency.
Purely deliberate strategies imply no learning, while emergent
strategies mean no control. Strategies have to be formed and
formulated.
An umbrella strategy means that the broad outlines are
deliberate, while the details are allowed to emerge en route.
Strategies: advantages and disadvantages
1. Strategy sets direction
Advantage: Main role of strategy is to chart the course of an
organisation so it can operate cohesively
Disadvantage: Can serve as a set of blinders to hide potential
dangers. Setting out on a predetermined course in unknown
waters is the perfect way to sail into an iceberg
2. Strategy focuses effort
Advantage: Strategy promotes coordination of activity. Chaos
could ensure otherwise
Disadvantage: Groupthink arises. There may be no peripheral
vision to open other possibilities.
3. Strategy defines the organisation
Advantage: Strategy provides people with a shorthand way to
understand their organisation and to distinguish it from others
Disadvantage: To define a organisation to sharply may also
mean to define it too simply, sometimes to the point of
stereotyping. The rich complexity may be lost
4. Strategy provides consistency
Advantage: Strategy is needed to reduce ambiguity and
provide order.
Disadvantage: Creativity thrives on inconsistency
Strategies are to organisations what blinders are to horses:
they keep them going in a straight line but hardly encourage
peripheral vision.
Areas of agreement
Strategy concerns both organisation and environment: The
organisation uses strategy to deal with changing
environments.
, The substance of strategy is complex
Strategy affects overall welfare of the organisation
Strategy involves issues of both content and process.
Strategies are not purely deliberate
Strategies exist on different levels. (corporate
strategy/business strategy)
Strategy involves various thought processes
Chapter 2: The design School
Proposes a model of strategy making that seeks to attain a
match/fit, between internal capabilities and external
possibilities. (SWOT)
The model places primary emphasis on the appraisals of the
external and internal situations, the former uncovering threats
and opportunities in the environment, the latter revealing
strengths and weaknesses of the organisations
Two other important factors in strategy making: i) managerial
values, that is the beliefs and preferences of those who
formally lead the organisation and ii) social responsibilities,
specifically the ethics of the society in which the organisation
functions.
On the actual generation of strategies, little has been written.
One just evaluates different strategies and chooses the best
one. The strategy has to meet:
1. Consistency: consistent with goals and policies.
2. Consonance: must represent an adaptive response to the
external environment and to the critical changes occurring
within it.
3. Advantage: must provide for the creation and/or maintenance
of a competitive advantage.
4. Feasibility: the strategy must neither overtax available
resources nor create unsolvable subproblems.
Once a strategy has been agreed upon, it is then
implemented.
The school has not developed so much as provide the basis for
developments in other schools.
Premises
Strategy formation should be a deliberate process of
conscious thought: Action must flow from reason. Effective
strategies derive from a tightly controlled process of human
thinking.
Responsibility for that control and consciousness must rest
with the CEO: that person is the strategist.
The model of strategy formation must be kept simple and
informal: one way to ensure that strategy is controlled in one
mind is to keep the process simple. Elaboration and
formalisation will sap the model of its essence.
