Printed
with permission from TCI
Management Consultants. A group of senior-level management
consultants, offering strategic planning and marketing services
to a wide range of public and private sector clients.
Strategy
Safari A Guided Tour Through the Wilds of Strategic
Management
by Henry Mintzberg, Bruce Ahlstrand, and Joseph
Lampel
The Free Press, New York, 1998
ISBN 0-684-84743-4
Using
the analogy of the blind men trying to describe an elephant
(remember the story where the one feeling its tail thought
it was like a rope, the one feeling its leg thought it was
like a tree, the one feeling its tusk thought it was like
a spear, etc.) Mintzberg, Ahlstrand and Lampel discuss various
approaches to strategic planning. They identify 10 different
schools of thought, and describe in chapters devoted to
each, its history and origins, basic concepts, applications,
advantages and disadvantages, and situations in which that
approach to strategic planning may be appropriate.
At the
outset of the book, in attempting to define this amorphous
beast, they outline what they call 'the 5 P's of strategy',
which are really five different ways of thinking about the
essential characteristics of strategic planning. These are:
1) strategy
as a plan a guide for a course of action, a path from
a current state to a desired future end state
2) strategy as a pattern "...that is, a consistency
of behavior over time. A company that perpetually markets
the most expensive products in its industry pursues what
is commonly known as a high-end strategy, just as a person
who always accepts the most challenging of jobs may be described
as pursuing a high-risk strategy." (p.9)
3) strategy
as position the location of particular products in
particular markets.
4) strategy
as perspective "in Peter Drucker's memorable
phrase, this is the "theory of the business" (p.13)
it represents strategy as a particular philosophy
of the business in terms of interacting with the customer,
or the way(s) in which goods or services are supplied.
5) strategy
as a ploy under this definition, strategy is a means
of gaining market share through a specific maneuver, designed
to outwit a competitor or opponent.
The authors also discuss at the outset of the book the pros
and cons of the various reasons why strategic planning has
been thought to be beneficial in an organization. These
are:
- strategy
sets direction while this is clearly beneficial, the
danger is that the blinders that a strategic plan can impose
upon an organization can make it difficult to appreciate
new opportunities and possibilities as they arise
- strategy focuses effort true, but the downside risk
is that managers within an organization can get locked into
a particular form of "groupthink", again missing
out on potential new opportunities
- strategy
defines the organization again true to some extent,
but the danger here is that the rich diversity inherent
within the organization can get overlooked or lost by an
overly simplistic stereotype of "what the organization
is all about"
- strategy
provides consistency assuredly important, but consistency
for consistency's sake, without having a clear market-oriented
reason for this, is the obvious danger here
So it is apparent that the authors do not necessarily regard
strategic planning as a good thing in all cases; they clearly
indicate that there are dangers that an overly rational
or overly rigorous approach can pose.
The core of the book is a detailed description of each of
the 10 schools. They differentiate between two categories
in this regard: the prescriptive schools, which attempt
to identify directions for action on the part of the company
based on an assessment of its current situation and that
of the environment within which it operates, and the descriptive
schools, which simply attempt to understand the historical
reasons why a given company is where it is at a particular
point in time.
The
10 schools are listed below; the accompanying chart (click
here) provides further details on each:
Prescriptive Schools
1) Design
School: This approach regards strategy formation as a process
of conception, matching the internal situation of the organization
to the external situation of the environment. Thus the strategy
of the organization is designed to represent the best possible
fit.
2) Planning
School: Here strategy formation is seen as a formal process,
which follows a rigorous set of steps from analysis of the
situation to the development and exploration of various
alternative scenarios.
3) Positioning
School: Under this approach, which is very heavily influenced
by the works of Michael Porter, strategy formation as an
analytical process placing the business within the context
of the industry that it is in, and looking at how the organization
can improve its competitive positioning within that industry.
Descriptive Schools
4) Entrepreneurial
School: This approach regards strategy formation as a visionary
process, taking place within the mind of the charismatic
founder or leader of an organization.
5) Cognitive
School: This approach, based upon the science of brain functioning,
regards strategy formation as a mental process, and analyzes
how people perceive patterns and process information.
6) Learning
School: This school of thought regards strategy formation
as an emergent process, where the management of an organization
pays close attention to what works and doesn't work over
time, and incorporates these 'lessons learned' into their
overall plan of action.
7) Power
School: Here strategy development is seen to be a process
of negotiation between power holders within the company,
and/or between the company and external stakeholders.
8) Cultural
School: This approach views strategy formation as a collective
process involving various groups and departments within
the company; the strategy developed is thus a reflection
of the corporate culture of the organization.
9) Environmental
School: Here strategy formation is seen to be a reactive
process: a response to the challenges imposed by the external
environment.
10)
Configuration School: In this final approach, the purpose
of strategy formation is seen as a process of transforming
the organization from one type of decision-making structure
into another.
In each
of these schools, the process of strategy formulation itself
is regarded as something of a "black box"
none of them are able to clearly describe how an individual
or group is able to leap from the collection and analysis
of information, to the conceptualization of alternative
courses of action (although they do concede that the cognitive
school comes closest). Overall, the authors appear to prefer
the 'learning school' (they are teachers, after all), because
of the emphasis that it places on an organization incorporating
input from its environment, and adapting over time.
In the
final analysis, just as none of the blind men's descriptions
of the elephant was completely adequate, yet each contained
elements of truth, none of these 10 approaches is complete
in and of itself, either. Each offers some useful concepts,
and some strong points to aid understanding, but has its
disadvantages as well (again, see the chart).
As well
as providing a useful illumination of the origins and characteristics
of the different schools of thought, Strategy Safari also
makes for a very enjoyable and entertaining read. Mintzberg
et.al. have done an excellent good job of taking a difficult
and potentially deadly boring subject and rendering it interesting.
The book is highly recommended for anyone embarking upon,
or engaging in, a strategic planning process.
The
above summary has been provided to you compliments of TCI
Management Consultants
