Explaining The Prescriptive And Emergent Strategies
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As the industry environment becomes more difficult, strategic management is getting hold of importance. Few words are as commonly used in management as strategy. In simple terms, strategy means looking at the long-term future to determine what the company wants to become, and putting in place a plan, how to get there.
Strategy is both art and science. Strategy is an art because it requires imagination, sensitive thinking, and an capability to visualize the future, and to encourage and connect those who will apply the strategy. Strategy is science because it requires analytical skills, the ability to organize and analyze information and take well knowledgeable decisions.
Without a strategy, an organization is meaningless and weak to changes in the business environment. Strategy acts as some kind of a guidepost for a company's ongoing development. Strategy provides a direction for the company and indicates what must be done to survive, grow and be profitable
Definition of Strategy
"Strategy is the direction and scope of an organisation over the long term: which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations."
(Johnson and Scholes, 2005:9)
"The strategy of the firm is the match between its internal capabilities and its external relationships. It describes how it responds to its suppliers, its customers, its competitors and the social and economic environment within which it operates."
Strategic plans include the following components:
Vision: The organizations deeply desired future.
Mission: the organization's purpose in terms of products, technology and markets.
Core competencies: the tangible and intangible assets the company will need to build and leverage to gain competitive advantage.
Values: the driving beliefs that define a company's culture, help managers to set priorities and guide day-to-day operations.
Strategic objectives: the targets that allow a company to measure how it is performing in key result areas such as market share, customer loyalty, quality, service, innovation and human capital
Process of strategy
There are mainly two processes which are generally used in the strategy management
Prescriptive Strategic Process
Emergent Strategic Process
Prescriptive Strategic Process
"A prescriptive strategy is one whose objective is defined in progress and whose main elements have been developed before the strategy commences."
Such an approach usually starts with an analysis of the outside environment and the resources of the company. The objectives of the organisation are then developed from this. There then follows the generation of strategic options to achieve the objectives, from which one (or more) may be chosen. The chosen option is then implemented.
This full range of activities is called the prescriptive strategy process. There are a number of strategy theories that explain elements of this process within prescriptive strategy and these are highlighted in the model at top.
For example, Motorola has successfully met the needs of emerging markets by using its fundamental technological strengths in electronic components to progress from supplying TVs and car radios to offering telecommunications services
Advantages of Prescriptive Strategic Process
Clear objectives provide focus on the Business
Objectives can be Translated into Targets against which performance can be measured and monitored
Resources can be allocated to specific objectives and efficiency can be judged
The approach is logical and rational
It structures complex information, defines and focuses business objectives, establishes controls, and sets targets that performance can be measured
Criticisms of Prescriptive Strategic Process
There are commonly major Difference between designed and realized strategy
Rigid Planning in a dynamic and turbulent business environment can be uncreative
Rigid loyalty to plans may mean missed business opportunities
It is possible and better to go without the short-term benefit in order to obtain the long-term good.
The chief executive has the information and authority to choose between options.
It is overly prescriptive because the business environment can be very disordered and complex
Emergent Strategic Process
An emergent or Learning strategy does not have the similar set objective. The whole process is more experimental with various possible outcomes depending on how matters extend.
'An emergent strategy is one whose final objective is undecided and whose elements are developed during the course of its life, as the strategy proceeds.'
Thus the early stages of emergent strategy may be similar to prescriptive strategy - analysis of the environment and resources. But then the process becomes more round, knowledge and experimental.
Again, there are a number of strategy theories that fall under the general heading of emergent strategy. Some of these are highlighted in the emergent strategy process model shown at Top.
Advantages of Emergent Strategic Process
Emergent strategy increases flexibility in a chaotic environment, allowing the business to respond to pressure and develop opportunities.
Changing Stakeholder connections can mean that strategy is often, of necessity, emergent
Consistent with actual practice in organisations
Motivation issue of customer is consider
Experimentation is allow to take place of strategy
Opportunity for inclusion of culture and politics of organisation
Criticisms of Emergent Strategic Process
There is a danger of "strategic drift" as objectives is not clear
It is more difficult to assess performance as targets are less well defined
Impracticable to expect board members to allow business to function without objectives.
Group resources need to be allocated between demands of competing operating companies.
Abdicates responsibilities for final decisions by involving political groups and individuals.
Removes aspects of rational thinking from decision making.
Management control becomes unclear as actions to be undertaken are not planned in advance.
From the above process we can conclude that many company are forced to become more flexible and adaptive to change. This leads to adoption of an emergent or Learning Strategy which allowing the business to respond to pressure and develop opportunities. Nevertheless emergent strategy can reduce the control over the actions and may lead into the risk of losing the direction of company objectives. A more use of strategy planning for analysis of internal and external recourses and environment would facilitate in improving company learning and sensitive thinking even when following an emergent or learning approach.
Some company are use prescriptive process because of it gives complex information, defines and focuses business objectives, establishes controls, and sets targets that performance can be measured. This approach makes it possible to organize complex activities and exercise a greater degree of control over different business units. For example, Tesco's planning process resulted in well defined long-term goals and clear boundaries for its UK core business, retail service, non-food and international sectors.
Gerry Johnson, Kevan Scholes, Richard Whittington, 2009, Exploring Corporate Strategy, 8th edition, Pearson education
Richard Lynch, 2006,Corporate Strategy,6th Edition, Pearson Education, Limited
David J. Collis, Cynthia A. Montgomery , 2005 , Corporate Strategy, 2nd Edition, McGraw-Hill Irwin
Porth, S. (2003). Strategic Management: A Cross Functional Approach. New Jersey: Prentice Hall.
Stonehouse, G., Hamill, J., Campbell, D. and Purdie, T. (2000). Global and transnational Business: Strategy and Management. Chichester: John Wiley and Sons Ltd
Miles, R. E. and Snow, C. C. (1978). Organizational Structure, Strategy, Process. New York: McGraw Hill
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