Chapter 5 Prepared by: Jamal Business 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. iii. v.

vii. viii.

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 controls Entrepreneurial 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
II. V.

Crafting Emergent Strategies: these emergent strategies cannot simply takeover due to following 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. i. ii. iii. iv. v. How to Craft Strategy: Mintzberg lists these activities in crafting strategies. Manage Stability: Like devote more time for planning of strategy, regularly updated it. Detect Discontinuity: Lookout regularly for environmental changes. Know the business: Includes awareness and understanding of business Manage Patterns: Detect emergent pattern and to help them take shape. Some emergent strategies must be uprooted Reconciling change and continuity: Natural synthesis of future, past & present

VI.

Chapter 5 Prepared by: Jamal Business Management

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 problem Step2: 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

Chapter 5 Prepared by: Jamal Business Management 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 its effectiveness 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.

Chapter 5 Prepared by: Jamal Business Management

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.