Corporate Strategy And Definitions Business Essay

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In this definition Bennett makes the distinction between the purpose of the organization and the goals, activities and policies that carry out this purpose while other writers use the purpose of the organization as part of the strategy. Strategy is though the pursuit of this purpose. This strategy needs to be developed, it means to be created and implemented and this is the topic of our study.

Strategists diverge on how strategy can be developed and they are split between 2 different approaches, the prescriptive and the emergent. In this paper we will explain on what each approach rely on, and discuss about the divergence between these approaches.

Mintzberg proposes 10 schools of thought on strategy formation. Each school focuses on a major aspect of the strategy formation:

The Design School: Strategy formation as a process of conception

The Planning School: Strategy formation as a formal process

The Positioning School: Strategy formation as an analytical process

Mintzberg groups these 3 Schools of thought as being prescriptive in nature, "More concerned with how strategies should be formulated than with how they necessarily do form." As Mintzberg (1998, p.5) explains. It means the strategy is viewed as a process of conception- the way it ought to be.

The Entrepreneurial School: Strategy formation as a visionary process

The Cognitive School: Strategy formation as a mental process

The Learning School: Strategy formation as an emergent process

The Power School: Strategy formation as a process of negotiation

The Cultural School: Strategy formation as a collective process

The Environmental School: Strategy formation as a reactive process

Mintzberg classify those 6 schools as being "descriptive" it means the way the process is seen to work in practice. On this group we will give more emphasis on the Learning School which refers particularly to the emergent approach.

Mintzberg also sees strategy through 5 different definitions, which he calls the 5p's:

Strategy as a Plan: We can say it is an intended course of action, a guideline to deal with a situation. It is the specific actions that then follow the strategies. Mintzberg calls this strategy "intended strategy" also known as Prescriptive.

Strategy as a pattern: it is a consistent pattern of past behavior. Companies evolves patterns out of their past. Mintzberg calls this strategy, "realized strategy". We can so relate strategy as a pattern with the emergent strategy.

Strategy as a position: It is a way to place the organization in an environment. In other words, it locates particular products in particular markets. If the organization positions itself it means it is intended.

Strategy as perspective: that is a vision and direction. This definition belongs to the entrepreneurial school and can be link with the prescriptive approach which Mintzberg calls "Intended Strategy".

Strategy as a ploy: it is a specific tactic intended to outperform a competitor.

Mintzberg makes a good link between plan and pattern (1998, p.10) "Organizations develop plans for their future and they also evolve patterns out of their past." Then he makes a good remark saying that the intended strategy might not always been realized in practice. If the intended strategies are totally realized Mintzberg calls it "Deliberate" strategy (Prescriptive strategy) and those that are not realized "Unrealized"strategies". He also distinguishes a third case: when a pattern has been realized without being intended clearly, we call that the Emergent strategy. For example a computer making company which only make computer can decide to make printers, next to make cell phones, then GPS and so on. This strategy of diversification has not been intended but emerged over the time by learning new skills while diversifying his core business.

To sum up, Lynch defines a prescriptive corporate strategy as one whose objective has been defined in advance and whose main elements have been developed before the strategy commences and the Emergent corporate strategy is a strategy whose final objective is unclear and whose elements are developed during the course of its life, as the strategy proceeds (Lynch, 2004).

There are 3 core areas of corporate strategy - The strategic analysis, strategy development and strategy implementation. In both prescriptive and emergent strategy these 3 core areas are taken into account but in a different way.

The strategic analysis refers to the starting point of the strategic management process. It consists of a work made in advance in order to effectively formulate and implement the strategy. Organizations must articulate the vision, missions and objectives together in order to focus the efforts toward the common ends of the organization. They also must analyze the external and internal environment. The external environment refers to the general environment such as demographic, technological and economic factors as well as the industry environment, such as his competitors, customers and suppliers while the internal environment refers to the organization resources such as its human resource skills, the investments and the capital in every part of the organization. The corporate strategies of the organization must make the best use of these resources in order to develop "sustainable competitive advantages".

The strategy development is the point where we think about the different options that can be consider. Then it is important to find a strategic route to move to the implementation (3rd and last core area of corporate strategy).

Prescriptive and emergent strategies have a different approach on these core areas. The prescriptive approach considers the 3 core areas linked together sequentially. It means the analysis allows developing the strategy which will be then implemented. In opposition the emergent approach says that the 3 core areas are interrelated, link together. In the emergent approach the corporate strategy is implemented by a series of trials, experimentations, errors. Thus it would be wrong separating the development and the implementation.