Mintzbergs 5 Ps for Strategy - Literature review Example

?Critically consider the following contention: ‘Mintzberg’s 5 Ps for Strategy (1987) presents an incomplete view of the topic.’ Introduction The term‘strategy’ has been broadly defined by many scholars from different perspectives. While most admit that there can be no comprehensive definitions of strategy, nevertheless, scholars have attempted to provide some explanations that pose as definitions within certain boundary conditions. The early studies in strategy were typically encapsulated in the domain of business policy. Strategy as a field of study emerged in the late 1970s and 1980s. Hence during the 1980s, research scholars, academics and practitioners evinced a keen interest in defining strategy. In this paper, we proceed to structure our argument thus: in brief, we summarize Mintzberg (1987) covering the key points of his paper and its implications. Secondly, we proceed to review his own works that support and contradict his proposed definitions. Thirdly, we review the works of several scholars who either support or oppose his work implicitly; this can be understood by uncovering the context of their studies. Towards the end, we proceed to integrate our findings and conclude. Critical Review Mintzberg (1987) provides five broad definitions for strategy stating that it could a Plan, Ploy, Pattern, Position or Perspective. While plan and ploy fall under the same construct for his definition, there is a subtle difference in his usage of ‘ploy’. Ploy is defined as an action or strategy that is designed for someone else to react. The real action may or may not transpire in practice. Pattern is observed behavior. This results when the ground reality can be seen. Mintzberg, in his paper, refers to this as a realized strategy. Observe the parallels with one of his other research papers (Mintzberg & Waters 1985). In this paper, the authors observe that the final strategy which is enacted by the organization, also called the realized strategy may not be the one they started out with. In his earlier research, Mintzberg (1978) describes patterns as being parallel to the realized strategy, which in effect is a series of decisions taken by the firm. Being manifested in terms of the operational or pricing actions, they can be observed. Clearly, Mintzberg has been focused in developing his research ideas and theories in a sequential manner based on empirical observations. Position refers to the interaction of the organization with its business environment. In other words, here we can draw parallels with a firm operating within an industry. The strategy in this case is a question of how the firm positions itself within the environment. The final definition of strategy through ‘perspective’ seeks to locate it within the confines of the ‘collective mind’ of the organization. Mintzberg provides an internal view in this case, as opposed to the external environment defined view in the earlier definitions. Psychologists refer to this as the cognitive make-up of the organization, anthropologists refer to this as the cultural aspect and management theories discuss this in terms of the ‘driving force’. At this stage, it is meaningful to analyze the contention (our title) with references from other scholars. While there has been a flood of research into strategy definitions, some of the texts offer us more in-depth expositions. Consider De Wit & Meyer (2010) who discuss strategy from three different perspectives: process, content and context. It is appropriate to explain it further. Process refers to the thoughts, mapping and schema that reside in the individual’s mind or the collective organizational mind. Here the first stage is thinking, wherein an idea is visualized. Possibly, here one can relate to Hambrick & Mason (1983) who suggest that most strategies in any organization are conceived in the mind of the top management, who then proceed to ensure percolation through the rank and file; their conceived strategies form the future of the organization’s growth trajectory. The second stage is formation, which relates to articulating the strategy on paper and working out an action plan. The third aspect refers to change, where the organizational actors need to adapt or change themselves in line for the new strategy. Here one could look at renewal, rejuvenation and cultural transformation. When we draw points of similarity with the paper under review, we observe that the process part can be mapped to the ‘plan’ and ‘perspective’ from Mintzberg (1987) lending support to the title of our paper. In a similar manner, we also observe that the third aspect of change, put forth by De Wit & Meyer (2010) has not been part of the 5Ps of strategy. Possibly, we are looking at a newer dimension that has not been explicitly covered by Mintzberg (1987). In their second part of the text, De Wit & Meyer (2010) address the ‘content’ where business level strategy, corporate strategy and networks are discussed. Again, we observe that it has parallels with Mintzberg (1987) with regard to business level strategy and corporate strategy, which can be said to be any one of ‘plan’, ‘ploy’, ‘position’ or ‘pattern’ but not ‘perspective’ which primarily falls into the domain f ‘process’ (De Wit & Meyer 2010). In the case of the third division, Networks, this relates to the possible business agreements such as joint ventures, or strategic alliances where two or more firms work together for common economic objectives. This definition or orientation of strategy has not been covered by Mintzberg (1987). In the third part of the book (De Wit & Meyer 2010), the authors discuss context, which refers to the ‘position’ from Mintzberg (1987). Here the authors discuss the stance of the organization with the industry – among firms within the same industry and across industries. Also they consider the scope of operations and they look at the global context also. This is in line with observed realities where we do have a large number of firms operating across national boundaries. In this part, we do not find any semblance of non-alignment with the paper under review. When we turn to other authors who provide alternative definitions, we note that Glueck & Jauch (1984 p. 8) describe strategy as a means to an end. They also describe strategy in terms of being a comprehensive plan that cuts across the entire organization. In essence, their view is an integrated view. While drawing parallels with the paper under review, we observe that Mintzberg’s definition of 5 Ps can be easily applied within this context. However, we also observe a few scholars who have extended the definition domain for strategy. Strategy has been perceived as creativity (Bilton, Cummings & Wilson 2003) who proceed to state that while most studies view strategy as a rigid, sequence bound and logic-driven approach, there is room for a different viewpoint. They fundamentally assert through a simulated experiment with students from other disciplines that creativity is evinced when the shackles of pre-conceived notions of strategy are removed. Perhaps, we can also extend this argument to an entrepreneur seeking to open a new business. He could take a leaf out of existing businesses or he could tap into an entirely new business with a new product or service. Under these conditions, strategy can be thought of as a creative process. Wilson (2003) moves beyond the 5 Ps of strategy when he views it as a form of decision making. He suggests that strategy needs to be viewed as decision making since the realized strategy is often what is observed by customers, suppliers and other stakeholders of the firm. What resides in the collective organizational mind is far different from what may be observed on the ground. A product on the retail shelves or the pricing of a product is the visible face of the organization to a consumer, yet what has driven it there is a result of decision making. We also observe that Mintzberg’s contemporaries conceived of strategy in a variety of ways. For instance, Porter (1996) looked at moving beyond traditional definitions of strategy and he described strategy in terms of what it was not. In his paper, he contested the idea of core competence and asserted that strategy needs to be thought of in terms of organizational strengths coming from different domains matched to the market demand. He introduced the concept of ‘fit’ with regard to strategy. Porter (1996) stated that strategy can be construed of as a position within an environment, implicitly supporting the 5 Ps put forth by Mintzberg (1987). There is further support evident from Porter’s argument that a sustainable competitive position could yield significant profit advantage over rivals. Further support has been obtained from Bourgeois (1980) who described the entire concept of strategy in relation to its position in the business environment. Besides, Bourgeois (1980) reiterates the Process, Content and Context interpretations of strategy lending support to De Wit & Meyer (2010). Most strategy scholars derived theories from practice. By practice, we refer to the learnings from the actual workings of organizations. In this realm, Sull & Eisenhardt (2001) identify some of the critical success factors for firms in the e-commerce and internet space. They suggest that these firms need to move beyond ‘Position’ and ‘Resources’ which are traditionally revered strategy constructs and look at simple rules for successful growth. For instance, some of the rules that they suggest are ‘pursue opportunities’, ‘jump into the confusion’, ‘keep moving’ and ‘finish strong’. So how do we relate this view with the 5 Ps. For one, it is clear that strategy here is construed as actions. Secondly, strategy here calls for moving beyond textbook definitions and leaning towards a bias for action. Evidently, the 5 Ps is not a complete definition of strategy. Thirdly, we observe that this is relevant when the business platform moves to a newer ecology, which is the internet. While moving to the virtual domain, the competences needed for success could be different. Taking the argument from the previous paragraph further, we explore some more research based on observed industry practices. In our attempt to understand strategies, we can also explore if strategies are stable over time. A question here could be posed thus: is it expected that strategies should not change? In an attempt to explore such perspectives, MacRimmon (1993) tries to classify strategy into three different types: 1) Coordinated actions, 2) Coordinated comprehensive actions and 3) Coordinated, comprehensive and conditional actions. We observe that coordinated actions find support from Porter (1996) and also with Glueck (1984) who stress on the integrated nature of strategy. In the third classification, MacRimmon (1993) attempts to describe strategy in the context of coordinated and comprehensive actions in an environment which poses conditions. In other words, the environment is also unpredictable and changing fast. He picks up cues from Apple, a leader in the technology sphere. The rate of product obsolescence is so fast here that every year, a firm needs to completely revamp its product if it needs to survive. A critical point here in relation to the 5 Ps is the concept of an environment in transition. Does Mintzberg (1987) provide for environmental instability? Perhaps it is implicit, but he does not discuss the continuously changing nature of the environment. Henry Mintzberg, the strategy and organization research scholar also was also keen on criticizing the works of earlier scholars especially when there were conceptual flaws. In his perception, he considered the entire works of Kenneth Andrews, Igor Ansoff and others as belonging to the design school (Mintzberg, 1990). He had some concerns which were expressed thus: he considered the concept of fit between the organization’s competencies and the demands of the marketplace to be too simplistic. This school of thought essentially had a number of assumptions. The primary assumptions were that the strategies should be simple, unique and explicit. Additionally, the strategies should be fully formulated before they were implemented in the business environment. Mintzberg’s chief points of contention were with the premise of the overarching decision-making nature of the top executive, the inability to effectively assess the strengths and weaknesses and the distinction between formulation and implementation. Igor Ansoff, who belonged to the design school of thought, in his reply (Ansoff, 1991) stated that some of Mintzberg’s assumptions were way off the mark. According to Ansoff (1991), Mintzberg was guilty of several errors. Among them, one was the error of generalizing conclusions for the entire population based on a single study. Another critical error pointed out was that Mintzberg did not understand the context of several studies and was therefore not competent enough to comment on the works of others such as Kenneth Andrews. Ansoff (1991) then proceeded to explain why he had spent four decades in researching strategy, consulting with organizations and how this led to different perspectives in his thinking about the definitions within the field. Mintzberg (1991), in his reply to Ansoff (1991) was not articulate enough, yet he only stressed on the fact that strategy needed to be viewed from the perspective of ‘learning’ and not just planning. ‘Learning’, here implied the iterative, back-and-forth nature of strategy making where strategists learned from their customers or stakeholders and incorporated it into their products and services. With this softer reply, he concluded the long-standing argument between the two scholars. For our research, there are two points that bear mention. The first is that while Mintzberg criticized the design school, his own paper (Mintzberg 1987) had several definitions of strategy that merely emphasized a static nature of the organization. In one sense, we observe traces of self-contradiction. Especially with regard to ‘plan’, ‘position’ we note that Mintzberg (1987) does not explicitly state the nature of the changing environment. Secondly, we note that Mintzberg (1990) was seeking to qualify the definitions of strategy by suggesting that boundary conditions be removed. For instance, we observe that he tries to say that no aspect in strategy making can be rigid and controlled. Strategists need to account for possible interventions from the environment and from potential political forces that may exist within the organization itself. Implicitly, he stresses the possibility of an iterative method in strategy making which has been further articulated in Mintzberg (1994) where he says that strategy making cannot be formalized. He also asserts that one cannot predict the business environment and that strategy makers need to be connected to their subjects for continuous learning. Concluding Discussion From our exposition, we primarily agree with the views of Mintzberg’s 5 Ps as a starting point for defining strategy. However, we have sufficient evidence from the work of contemporary scholars that suggest an incomplete view from Mintzberg (1987). We proceed to understand some of the reasons and also how we can move towards more integrated definitions for strategy. Firstly, we observe that the 5 Ps definition has strong support from scholars. Porter (1996), De Wit & Meyers (2010) and Sull & Eisenhardt (2001) agree with most of the constructs, in principle. On this point, we establish clarity: the 5 Ps are definitely relevant and find support from industry practices also. Secondly, we can state that the 5 Ps alone are not sufficient to provide an overarching, all-encompassing definition. The simplest explanation for this is that strategy as a discipline has been defined by observing practices of organizations. Predominantly it has evolved from practice and not from theory. In other words, since the business environment is never static, one cannot rigidly define strategy. Definitions also need to keep pace with change. Thirdly, one needs to look at the extended definitions. For instance, we observed that while Porter (1996) stressed that the fit of the organization needs to be studied, Sull & Eisenhardt (2001) worked on a probable definition of strategy as a bias for action. Bilton, Cummings & Wilson (2003) looked at strategy as creativity, especially in the light of new business ventures and ideas from unconventional disciplines. Wilson (2003) related strategy to decision making. MacRimmon (1993) observed that there could be hierarchy in strategy making, where C3 (Coordination, Comprehensive & Conditional) strategy calls for a dynamic approach to strategy. In other words, he suggested that there cannot be a stable strategy for a firm. Having done a critical review of the contention: ‘Mintzberg’s 5 Ps for Strategy (1987) presents an incomplete view of the topic’, our learning strongly points to just one direction. Strategy cannot be rigidly defined through merely 5 Ps. There is sufficient turbulence and unpredictability in the business environment that could lead to transient perceptions of theoretical constructs. Yet, our learnings would definitely be enriched through such dynamism in the competitive business realm. Reference List Ansoff, Igor H 1991, ‘Critique of Henry Mintzberg’s ‘the design school: Reconsidering the Basic Premises of Strategic Management’’, Strategic Management Journal, vol. 12, no. 6, pp. 449-461. Bourgeois, LJ 1980, ‘Strategy and Environment: A Conceptual Integration’, Academy of Management Review, vol. 5, no. 1, pp. 25-39. Bilton, Chris, Cummings, Steven & Wilson, David 2003, ‘Strategy as creativity’, in Cummings, Steven & Wilson, David (eds.), Images of Strategy, Blackwell Publishing, Oxford, pp. 197-227. De Wit, Bob & Meyer, Ron 2010, Strategy: Process, Content, Context: An International perspective, 4th ed, Cengage: Hampshire, UK. Glueck, William F & Jauch, LR 1984, Business Policy & Strategic Management, 2nd ed, Mc-Graw Hill: London. Hambrick, DC & Mason, PA 1984, ‘Upper echelons: The Organization as a Reflection of its Top Managers’, The Academy of Management Review, vol. 9, no. 2, pp. 193-206. MacRimmon, KR 1993, ‘Do firm strategies exist?’, Strategic Management Journal, vol. 14, pp. 113-130. Mintzberg H & Waters, JA 1985, ‘Of Strategies, Deliberate and Emergent’, Strategic Management Journal, vol. 6, no. 3, pp. 257-272. Mintzberg H 1978, ‘Patterns in Strategy Formation’, Management Science, vol. 24, no. 9, pp. 934-948. 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