According to the book of strategic management called Strategy Safari by Author Mintzberg, Ahlstrand, and Lampel the explained the Stratgy by comparing it with Elephant, where blind men described an elephant according to their own perceptions and even their descriptions were about the small part of the body and not the whole elephant body. This means big Elephant is Strategy, and Strategy is very big, Strategy is considered to be the high point in managerial planning activity, Managers in their organisations in this book they been considered as blind men who describe strategy according to their own different perceptions. Strategy safari has ten school which has been divided in two, first is Pescriptive which has three schools and second is Descriptive which also has seven school both make ten schools. In Ten schools, the Prescriptive schools are The Design Shool, The Planning School, and The Positioning School, and the Descriptive school are The Enterpreneurial School, The Cognitive School, The Learning School, The Power School, The cultural School, The Environmental School, andThe Configuration School. Another book for strategic management called What is Strategy, and Does it Matter? by author Richard Whittington which he illustrated four different schools in generic approaches to strategy. He described those four strategy schools as Classical, Evolutionary, Processual and Systemic.
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None (Architecture as metaphor).
Case study teachers (especially at or from Harvard University), leadership aficionados, especially in the United States
Think (strategy making as case study)
"Look before you leap"
Some links to urban planning, system theory, &cybernetics
"Professional"managers, MBAs, staff experts (especially in finance), consultants, &government controllers - especially in France and the US
Program (rather than formulate)
"A stitch in time saves nine"
Sun Tzu's 'HYPERLINK "http://www.1000ventures.com/business_guide/crosscuttings/cultures_sun_tzu_the_art_of_war.html"The Art of WarHYPERLINK "http://www.1000ventures.com/business_guide/crosscuttings/cultures_sun_tzu_the_art_of_war.html"'
Economics (industrial organization) &military history
As in planning school, particularly analytical staff types, consulting boutiques", &writers, especially in the US
Calculate (rather than create or commit)
"Nothing but the facts, madam"
J.A.Schumpeter, A.H.Cole &others in economics
None (although early writings come from economics)
Popular business press, individualists, small business people everywhere but most decidedly in Latin America &among overseas Chinese
Centralize (then hope)
Descriptive (some prescriptive)
"Take us to your leader"
Those with psychological bent - pessimists in one wing, optimists in the other
Cope or create
Worry (being unable to cope in either case)
"I'll see it when I believe it"
C.E.Lindbiom, M.Cyert, J.G.March, K.E.Weick, J.B.Quinn &C.K.Prahlad &G.Hamel
None (perhaps some peripheral links to learning theory in psychology &education). Chaos theory in mathematics.
People inclined to experimentation, ambiguity, adaptability - especially in Japan and Scandinavia
Play (rather than pursue)
"If at first you don't succeed, try, try again"
G.T.Alison (micro), J.Pfeffer &G.R.Salancik, &W.G.Astley (macro)
People who like power, politics, &conspiracy, especially in France
Hard (rather than share)
"Look out for number one"
E.Rhenman &R.Normann in Sweden
People who like the social, the spiritual, the collective - especially in Scandinavia and Japan
Always on Time
Marked to Standard
Perpetuate (rather than change)
"An apple never falls far from the tree"
M.T.Hannan &J.Freeman. Contingency theorists (eg D.S.Pugh et al)
Population ecologists, some organization theorists, splitters, &positivists in general - especially in the Anglo-Saxon countries
Capitulate (rather than confront)
"It all depended"
A.D.Chandler, McGill University group, R.E.Milles &C.C.Snow
Lumpers &integrators in general, as well as change agents. Configuration perhaps most popular in the Netherlands. Transformation most popular in the US
Lump (rather than split, adapt)
"The everything there is a season"
Based on the Sloan Management Review1, 1999. Source, www.1000ventures.com.
Defination of Strategy:
Strategy is the direction and scope of an organisation over the long term, which achieves advantage for the organisation through its configuration of resources within a changing environment and to fulfil stakeholder expectation ( Johnson and Scholes, Exploring Corporate Strategy 6th Edition 2002, pg10) .
According to Kourdi defined as business strategy is the plans, choices, and decisions used to guide a company to greater profitability and success. Also added that strategy provides the impetus for commercial success, whereas a weak or misunderstood strategy may lead to a company going out of business, (business strategy, 2nd 2009 pg 3).
In book of Corporate Strategy defined as the identification of the purpose of the organisation and the plans and actions to achieve that purpose and is about finding market opportunities, experimenting and developing competitive advantage over time, (Lynch, 4th edition 2006, pg 5,7).
Chandler, 1960; defined Strategy is the determination of the basic long term goals and objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out the goals, ( Campbell,Business Strategy 2nd edition, 2002).
Mintzberg's 5Ps, Mintzberg (1987), defined a strategy by stated, a strategy can be a Plan, a Ploy, a Pattern of behaviour, a Position in respect to others, and can be as a Perspective.
Levels of strategy
There certain levels of strategy, according to Campbell, Stonehouse, and Houston described four levels of strategy, which are Network strategy, Corporate Strategy, Business Strategy and Functional Strategy.
Network strategy is concern about creations of relationship with others to make organisation to run its obligations, business organisation operates within network of distributors, suppliers, competitors, and customers. Is about collaboration by sharing certain objectives and informations, and organisation mighty benefit from it through strategic allience, joint venture and networks for success of business organisation.
Corporate strategy, this level difine the whole organisation in terms of ownership, objectives, management, finance, marketing, products. The size of corporate organisation depends on how big the organisation is, there degree of cordination and intergration and share values between individuals across the organistion.
Business strategy strategy, this is business level, involves desion making and goes to consideration in strategic automy to workforce of an organisation. It concentrates in core competence in terms of resources available like the capacity of organisation distribution that can be share across the whole system, finance, marketing. Overall scope of organisation by creating possible economies of scale and opportunities.
Functional strategy, also this level of strategy based of functional area or value adding activity like production, procurement, marketing, design, information systems, distribution, finance. This level is based on considerable of design and successful implementation of the strategy that will support the whole organisation, through sophiscated implentation of strategy.
Design school, detailed as strategy formation in any organisation there are needs of consider strengths, weakness, opportunities and threats (SWOT) analysis to determine the formation as process of it, by looking intenal strengths and weakness like research and development, management information system, marketing, management team, human resources, operations and finance. The formulation of strategy should be easy, simple and their deliberate process should be in concious thought. Should not formal analytical, not informal not intuitive. The communication between top to down, and down to top so to that implementation of it should be the involvement of all level of organisation.
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Planning school, the strategy planning must have objectives, and to make objectives should requires informations about environment this can be collected by using SWOT analysis, the analysis divided it into neatly delineated steps, articulate each with lots of checklists and techniques. SWOT analyisis been used by lots of firms to run their business, example L'Oreal cosmetics company used to SWOT techniques to analyse marketing environment in Europe and United States, in United States during 1980's L'Oreal company under Chief Excutive Officer. Through research and development and assesment of macro environment(Market changes, societal changes, competitive changes, supplier changes, govermental changes, and economic changes), they manage to build up objectives to for global markets, global strategy where planned and used to compete in U.S markets which they did able to acquire market share and became number one cosmetic company in U.S market. Strategy process needs to be supported by objectives, budgets, programs and plans.
Positioning school stragegic management needs to be concious in strategy, which strategy positiong
school pointed that the management should use analysis to identify the right relationships to
which strategies work best in an organisation through academic statistical studies. The
positioning school try to give explaination the how company can position in the market to gain competitive edge, example Michael Porter model of Competitive Analysis (Threats of new entrants, bargaining power of firm's supplier, bargain power of firm's cutomers, threat of substitute products, and internsity of rivalry among competing firms), Porter's Generic Strategies (Cost leadership, differentiation, and focus) and value chain analysis, and Boston Consulting Group Matrix (BCG).
Classical school, based in rational thinking and deterministic approach, formation of strategy in the organisation.
Entrepreneurial school, the autohrs Mintzberg, Ahlstrand and Lampel explained as this school is opposite from prescriptive schools (Design, Planning) the strategy formation process exclusively is based on single leader and stressed in the most innate of mental states and process-intuition, judgment, wisdom, experience and insight. Also added the leader needs to see ahead and behind, above and below, beside and beyond and also he or she needs to through. The school centered the process into single leader, and pointed it in mystery intuition. Example Virgin Company as succefully entrepreneur business company with founder Richard Branson as vision leader in the organisation. The shifted strategies that from precise designs, plans, or positions to vague visions or perspectives, typically can be seen through metaphor.
The cognitive school, according to Mintzberg, this school has explained as Cognition as confusion, where individuals process of information to make decisions and especially in biases and distortions which they exhibit through reasoning by analogy, illusion of control, escalating commitment and single outcome calculation. Cognition as information process because of biases of individual the information process needs attention, encoding, storage and retrieval, choice and outcome. Cognition as mapping because cognition is the existence of mental organisation structure. Cognition taken as concept attainment, in concept attainment managers here acting as map makers and also as map users. Cognition as construction through interpretation. Company's managers build up knowledge of their organisations in the environment operates through cognitition, the better understand the better formation of strategy in the organisation. Example of Apple company which has gained very big market share in selling iPad, iPhone, Laptop, and iPhone this is advantage gained in market enviroment operating through better cognitive knowledge.
Learning School an emergent process, Mintzberg, Ahlstrand, and Lampel explained learning as part of knowledge creation, and by using The Knowledge Spiral gave four modes of knowledge conversion which are socialisation, externalisation, combination and internalisation. Learning has been taken as conservative and only used to detect errors and keep organisational activites on tract. Organisational learning is the process of change in individual shared thought and action which is affected by and embedded in the institution of the organisation. The learning has became very challenging in prescriptive schools. Organisations emphasing the learning as source of organisation capabilities to gain core competence by recruiting graduates students. Crossan, Lane and White's Unifying Frame work for Organisational Learning (1997), learning process at level of (individual, group, organisation), the process is intuiting, interpreting, intergrating and institutionalising.
Culture, authors in strategy safari pointed as source of economics, politics, strategy and also anthropology. Culture explains the uniquiness of what do between countries. Organisation culture is collective cognition in beliefs, symbols, buildings, and products, and is about to share common values and beliefs to increase the level of inertia and breed similarities. And also is about combinations of ideology in the orgaisation, its environmental interpretation comes from national culture, example of Japanese and American culture they could not be able to imitate each other. The linkage of culture and strategy is by careful analysis and decision making, resistance to strategic change and overcoming resistance to strategic change, dominate values so can gain competitive advantage and also can cause culture clash when two organisation join together. Strategy formation has been considered as social process which its source is culture and because of that people differ in how they view the strategy process ( some view as capability learning and other capability rooted in culture. Culture is bundle resource (tangible and intangible) and barrier to imitations (American tried to imitate Japanese in manufacturing industries which later realised is difficult to imitate).
Environmental school, seems to be as an actor in formation of strategy, the formation of strategy sometimes will depends with environment where organisation operates. Is influences bias and distortion (cognitive school) because of its complexity understand of environment where business organisation operates. The school emphasise to stop quick reaction than looking of gain experience, experiment and enact and learning. Example a France cosmetics company L'Oreal when they entered American market took time to acquire that market, because they were need to understand that new enviroment in how to do the business in that market. Mintzberg pointed that environment has got its dimension, contingency theory (stability, complexity, market diversity, and hostility).
Configuration school, as process of transformation, this school is about to intergrate the message of the other schools, is about configuration and transformation, and change. Strategy itself is counted as not change than as apart of continuity. Strategy stabilising organisation increase of emergent pattern of strategies, dealing with different dimensions of organisation and cluster together under particular conditions. Explained the entrepreneure situation under dynamic conditions, and machine type of some organisation which are in relative stable conditions.
Evolutionary, has based on emergent strategy, ecomical issues and efficiency, it seems to be cognitive in nature.
Processual, this school is based in nature and also in determistic and crafting approaches in strategy.
Systemic school, this school seems to be relativistic in culture and power, also based in emergent strategy and influence socialism.
Comparison between Prescriptive and Descriptive schools.
Comparison between Prescriptive and Descriptive schools.
There are some interrelation between prescriptive and descriptive schools because their depending in each other, there is relation between Entrepreneurial and Design, learning, planning, positioning school where the entrepreneur as a single leader has vision, through learning process the leader can design and plans for possible future. Also there is link between power and cultural and entrepreneurial school where the leader exercise leardership through negotiation and collective of one culture in the organisation. Also there is a link between the prescriptive (design, planning, positioning school) and configuration school, because the positioned strategy needs to be configured after implemented as part of transformation process. The is connection between cognitive school, and cultural and environmental, because cognition is about mental process by perceiving through collection of culture and reaction of environmental changes . According to Mintzberg, Ahlstrand, and Lampel in the book of Strategy Safari they did able to explain the theory of Splitting the process, (pg 371) where by cognitive school has been at centre as black box linking all others schools and except configuration school which is looking all around other schools as process of transformation and configuration. The cognitive school has related to Strategic thinking as Seeing on page 128, which explain strategist in organisation needs to Seeing - ahead and behind, above and below, beside and beyond, and also he or she needs to see it through. Which is more than beyond.
To Contrast between Prescriptive and Descriptive schools.
Prescriptive schools (Design, Planning, Positioning, and Classical) are seems to be objectives in nature and can be analysed in formal and informal, in case of informal, example of entrepreneur as a single leader can design, plan and position the strategies by using his or her own cognitive image by using only experience. Also prescriptive schools are based into analysis form of action as positioning school, in design school its based in conception and planning school is about plannin in formal process. In prescriptive school the managment style of organisation is from top level to the bottom level, and perfect rational. While The Descriptive schools (entrepreneurial, cognitive, learning, power, cultural, environmental, configuration, evolutionary, processual, and systematic), are seems to be subjectives in nature, also these schools has based on collective and reaction process in terms of culture and environment, emergent issues (learning) like unexpected strategy, through decision making and negotiation (power). Also give descriptive schools explain vionary (entrepreneur) and perceptive as mental process (cognitive), then also the descriptive it based on transformation as process of moving organisation from of state to another (configuration).
There fore for business organisation in today business environment which is turbulent, the organisation needs form a corporate strategy level which has got combination of various modern practiced approaches, through visioning, emergent learning, analysing, progamming, designing and, also needs to consider configuration and transformation, people thinking as apart of cognitve, decisicion making and negotiation at and during, influencing social interaction so to build a culture and build up a capabilty that organisation can be able to respond to environmental which is dynamics by positioning for the future, fit between opportunities and capabilities.