Lecture 1 – Meeting the beast
- The whole beast is the literature + the practice of strategic management.
- Animals are more rational than people -> learn from them.
- The focus is on strategy formation through different perspectives.
- The picture above is a prescriptive way -> way of the books.
o Identifying: set mission and vision.
o Diagnosing: SWOT analysis, look at environment.
o Conceiving: look at options, make a plan.
o Realizing: performing the plan and controlling.
- Strategy is formed by humans -> bounded rationality and bias.
- Perspectivism: taking different perspectives in tackling a problem.
Mintzberg: the 5 P’s for defining strategy:
1. Plan: consciously intended direction, move to desired state.
2. Ploy: specific action to outwit an opponent.
3. Pattern: recognizable similar actions that emerge over time.
4. Position: location in imaginary competitive environment.
5. Perspective: fundamental way of doing things, managers’ interpretation.
Between the intended and realized strategy, there are other types of strategy:
- Deliberate: intention fully realized, no learning.
- Unrealized: intention is not realized.
- Emergent: pattern is realized which was not expressly intended -> no control.
- Umbrella: intended outlines (goals/direction), details can be 3.dit
Strategic planning: planning, design, positioning.
Strategic visioning: entrepreneurial, design, cultural, cognitive.
Strategic venturing: learning, power, cognitive.
Strategic learning: learning, entrepreneurial.
,Lecture 2 – Design school
Assumptions of the design school:
- CEO had complete and perfect information + capacity to process all info.
- Environment can always be understood.
- Structure follows strategy → only works with stable environment.
- All information is documented and stable.
- Strategy is centrally formulated → 1 strategist (head/CEO).
The strategist is the head/CEO of the company, he is the main strategist.
- Tasks: gather info, analyze info, organize info, formulate strategy.
- Uncommon CEO names → more deviating strategy.
- CEO’s cognitive flexibility helps with development of dynamic capabilities.
- CEO’s characteristics → acquisitions of the firm.
Design school is closely connected to SWOT analysis.
- Strengths & weaknesses: mkt, R&D, MIS, management team, operations, HR.
- Opportunities & threats: societal, governmental, economic, competitive, supplier,
market. Changes in the environment, navigate through, but do not interact.
- BUT: no place for existing competition, only changing competition in model.
- BUT: does not offer to create a unique strategy.
Strategy is seen as process of conception: match internal capabilities – external possibilities.
- SWOT + managerial values + social responsibilities = design school model.
- Most authors do not pay a lot of attention to social responsibilities.
- Structure follows strategy: strategy → goals → action → allocation → structure.
- Basic design model designed by Andrews:
Analysis
Creation
Evaluation
Implementation
,Rumelt: tests for evaluation of strategies.
- Consistency: must present consistent goals and policies.
- Consonance: represent adaptive response to environment and its changes.
- Advantage: provide for creation/maintenance of competitive advantage.
- Feasibility: neither overtax available resources nor create unsolvable (sub)problems.
Underlying premises and characteristics of design school:
1. Strategy formation = deliberate process of conscious thought, not intuitive/judge.
2. CEO has responsibility for control and consciousness.
3. Simple and informal process of strategy → elaboration leads to lack of essence.
4. Strategies should be unique, best ones have individualized design.
5. Strategy is complete when fully formulated as a perspective → not emergent.
6. Strategies should be explicit → show to people and read about it.
7. Formulation and articulation → implementation. Thinking and acting separate.
Critiques of the design school from Mintzberg et al.:
1. Capacity to learn is ignored: conception instead of learning, need time to learn
strengths by testing them, otherwise cannot know strengths.
2. Structure follows strategy: new strategy can’t just implement structure → process.
3. Promotion of inflexibility: by hierarchical and explicit strategy → time-consuming.
4. Assumption of universality: not always right for every organization.
5. Detachment thinking from acting: formulation and implementation not at same
time. External environment unpredictable and need fieldtrips for strategy.
6. Structure is often scarcely measurable.
Additional criticism:
1. CEO unlikely to have all and perfect information and good capacity.
2. Homo Economicus: complete information, foresight of consequences, capability of
optimal solution to maximize utility → no one is a Homo Economicus.
3. Bounded rationality, preferences are switched over time.
o Marketing myopia: failure to see down the road, not only selling, but solution.
o Marketing hyperopia: better vision of distant issues than near ones.
o Marketing macropia: an overly broad view of your industry.
Conditions/reasons to implement design school:
1. One brain can manage all info → simple situ.
2. One brain is able to have detailed, full info of situ → must be in it.
3. Relevant info is established before new strategy is needed in stable situ.
4. Organization must be capable to handle centrally articulated strategy.
Therefore, design school is most applicable in stable environments, otherwise change
structure too much. Best for large, old organizations (mechanical and stable) or in young and
entrepreneurial organizations → depends on timing.
, Lecture 2 – Planning school
- Sees strategy as a formal process that conceives strategy as a plan.
- Plan: a consciously intended course of action.
- Planning: establishment of goals, policies, and procedures for social/economic unit.
- In strategy (Mintzberg): A formalized procedure to produce articulated results by
using an integrated system of decisions.
- Formalization: process of developing/implementing strategy by analysis/planning.
o Includes: systematic procedures, comprehensive documentation, clear
objectives and steps, rational decision-making, control, evaluation.
- Operational planning: part of planning school where strategic goals are linked to
tactical goals, specifies activities, resources required, establishes budgets an activities
for next 1-3 yrs. Use milestones, conditions for success, phasing.
- Machine assumption: produce everything according to book, end product comes.
Assumptions of the planning school:
- CEO/head of organization is responsible for overall process.
- Staff planners are responsible for the execution.
- Strategies appear full-blown/detailed and made explicit.
- Planners consider different possible futures.
Planning school sees strategy as a result of formal procedures, formal analysis and training.
- Also uses SWOT model, but with lots of steps and to do lists.
- Focuses on forecasting, planning, and budgeting.
- Problem: literature grew quantitatively, but quality grew hardly at all.
- Origins in military. Both adapt constantly, formal, but military assumes conflict.
- The whole beast is the literature + the practice of strategic management.
- Animals are more rational than people -> learn from them.
- The focus is on strategy formation through different perspectives.
- The picture above is a prescriptive way -> way of the books.
o Identifying: set mission and vision.
o Diagnosing: SWOT analysis, look at environment.
o Conceiving: look at options, make a plan.
o Realizing: performing the plan and controlling.
- Strategy is formed by humans -> bounded rationality and bias.
- Perspectivism: taking different perspectives in tackling a problem.
Mintzberg: the 5 P’s for defining strategy:
1. Plan: consciously intended direction, move to desired state.
2. Ploy: specific action to outwit an opponent.
3. Pattern: recognizable similar actions that emerge over time.
4. Position: location in imaginary competitive environment.
5. Perspective: fundamental way of doing things, managers’ interpretation.
Between the intended and realized strategy, there are other types of strategy:
- Deliberate: intention fully realized, no learning.
- Unrealized: intention is not realized.
- Emergent: pattern is realized which was not expressly intended -> no control.
- Umbrella: intended outlines (goals/direction), details can be 3.dit
Strategic planning: planning, design, positioning.
Strategic visioning: entrepreneurial, design, cultural, cognitive.
Strategic venturing: learning, power, cognitive.
Strategic learning: learning, entrepreneurial.
,Lecture 2 – Design school
Assumptions of the design school:
- CEO had complete and perfect information + capacity to process all info.
- Environment can always be understood.
- Structure follows strategy → only works with stable environment.
- All information is documented and stable.
- Strategy is centrally formulated → 1 strategist (head/CEO).
The strategist is the head/CEO of the company, he is the main strategist.
- Tasks: gather info, analyze info, organize info, formulate strategy.
- Uncommon CEO names → more deviating strategy.
- CEO’s cognitive flexibility helps with development of dynamic capabilities.
- CEO’s characteristics → acquisitions of the firm.
Design school is closely connected to SWOT analysis.
- Strengths & weaknesses: mkt, R&D, MIS, management team, operations, HR.
- Opportunities & threats: societal, governmental, economic, competitive, supplier,
market. Changes in the environment, navigate through, but do not interact.
- BUT: no place for existing competition, only changing competition in model.
- BUT: does not offer to create a unique strategy.
Strategy is seen as process of conception: match internal capabilities – external possibilities.
- SWOT + managerial values + social responsibilities = design school model.
- Most authors do not pay a lot of attention to social responsibilities.
- Structure follows strategy: strategy → goals → action → allocation → structure.
- Basic design model designed by Andrews:
Analysis
Creation
Evaluation
Implementation
,Rumelt: tests for evaluation of strategies.
- Consistency: must present consistent goals and policies.
- Consonance: represent adaptive response to environment and its changes.
- Advantage: provide for creation/maintenance of competitive advantage.
- Feasibility: neither overtax available resources nor create unsolvable (sub)problems.
Underlying premises and characteristics of design school:
1. Strategy formation = deliberate process of conscious thought, not intuitive/judge.
2. CEO has responsibility for control and consciousness.
3. Simple and informal process of strategy → elaboration leads to lack of essence.
4. Strategies should be unique, best ones have individualized design.
5. Strategy is complete when fully formulated as a perspective → not emergent.
6. Strategies should be explicit → show to people and read about it.
7. Formulation and articulation → implementation. Thinking and acting separate.
Critiques of the design school from Mintzberg et al.:
1. Capacity to learn is ignored: conception instead of learning, need time to learn
strengths by testing them, otherwise cannot know strengths.
2. Structure follows strategy: new strategy can’t just implement structure → process.
3. Promotion of inflexibility: by hierarchical and explicit strategy → time-consuming.
4. Assumption of universality: not always right for every organization.
5. Detachment thinking from acting: formulation and implementation not at same
time. External environment unpredictable and need fieldtrips for strategy.
6. Structure is often scarcely measurable.
Additional criticism:
1. CEO unlikely to have all and perfect information and good capacity.
2. Homo Economicus: complete information, foresight of consequences, capability of
optimal solution to maximize utility → no one is a Homo Economicus.
3. Bounded rationality, preferences are switched over time.
o Marketing myopia: failure to see down the road, not only selling, but solution.
o Marketing hyperopia: better vision of distant issues than near ones.
o Marketing macropia: an overly broad view of your industry.
Conditions/reasons to implement design school:
1. One brain can manage all info → simple situ.
2. One brain is able to have detailed, full info of situ → must be in it.
3. Relevant info is established before new strategy is needed in stable situ.
4. Organization must be capable to handle centrally articulated strategy.
Therefore, design school is most applicable in stable environments, otherwise change
structure too much. Best for large, old organizations (mechanical and stable) or in young and
entrepreneurial organizations → depends on timing.
, Lecture 2 – Planning school
- Sees strategy as a formal process that conceives strategy as a plan.
- Plan: a consciously intended course of action.
- Planning: establishment of goals, policies, and procedures for social/economic unit.
- In strategy (Mintzberg): A formalized procedure to produce articulated results by
using an integrated system of decisions.
- Formalization: process of developing/implementing strategy by analysis/planning.
o Includes: systematic procedures, comprehensive documentation, clear
objectives and steps, rational decision-making, control, evaluation.
- Operational planning: part of planning school where strategic goals are linked to
tactical goals, specifies activities, resources required, establishes budgets an activities
for next 1-3 yrs. Use milestones, conditions for success, phasing.
- Machine assumption: produce everything according to book, end product comes.
Assumptions of the planning school:
- CEO/head of organization is responsible for overall process.
- Staff planners are responsible for the execution.
- Strategies appear full-blown/detailed and made explicit.
- Planners consider different possible futures.
Planning school sees strategy as a result of formal procedures, formal analysis and training.
- Also uses SWOT model, but with lots of steps and to do lists.
- Focuses on forecasting, planning, and budgeting.
- Problem: literature grew quantitatively, but quality grew hardly at all.
- Origins in military. Both adapt constantly, formal, but military assumes conflict.
