Strategic Schools of Thought vs Strategic Lenses - Essay Example

Strategic Schools of Thought vs Strategic Lenses Overview Strategic planning is an organisational process whereby organisations determine the strategy that should be adopted after consideration of organisational goals and objectives. It also calls for a careful look at the way in which they want to achieve those targets and goals, as well as at the resource application for due course. Under strategic planning, one determines the ultimate aim of the organization, which will affect long term perspective of the firm’s strategy andorganization as a whole (Thompson and Strickland, 2003). The following analysis presents a comparative study of the schools of thought model formed by Henry Mintzberg, which is utilised to categorise strategic management fields for companies and the Strategic Lenses provided by Johnson, Scholes and Whittington (2008). The paper outlines each one of these models and assists understanding and applicability through industry examples. The comparative study at the end tries to assess the relevance and applicability of each thought. Schools of Strategy Henry Mintzberg’s 10 schools of thought is a framework that is used to elaborate on the concept of strategic management. The schools have been described and a critique of insights is presented under each category. The 10 schools of thought mention ways in which strategies are to be formulated (Mintzberg, Lampel and Ahlstrand, 2005). These schools of thought discuss methods that are to be deployed while framing a company strategy. Design School As per this school of thought, formulating a strategy is a deliberate process that begins with the conception of unique and clear notions. The tools such as, SWOT and Ashridge Mission model, are used to assess the external and internal environment of business. This strategy is best suited for stable business environments, but eliminates relevance of the external business environment (Ambrosini and Collier, 2007). Planning School Under the planning thought, strategy formulation is a formal procedure where strategic execution is preceded by a rigorous analysis of the context. This strategy involves a great deal of brainstorming and promotes innovative thought. For example, Clear shampoo used a popular football icon to communicate and market its male shampoo, Clear Men. Positioning School Here strategy formulations happen as a process of analysis where business is compared with industry standards and strategies are formulated to improve market position. The strategy aims towards changing or altering the present company position in market and perception in the minds of consumers. Toyota shifted its positioning to a manufacturer of luxury cars with the Lexus brand. Entrepreneurial School Here, strategy becomes a way for formulating a company vision and strategy formulation is done by a charismatic leader of the company (Schein, 2004). Most of the technology companies follow this strategy. One can take the example of Microsoft, which runs on decisions and strategies pursued by Bill Gates. Cognitive School In this school, strategy is framed as a mental process and this develops ways in which people process information and perceives patterns. The mind of strategists are analysed and information is then processed. This method is highly time-consuming and based on several assumptions. However, Toyota followed this strategy while changing steering wheel audio controls in its Premio 2008, where car users had to reach out for the audio system so as to change audio controls of the steering wheel (Lynch, 2003). Learning School Strategy development here is a process of working upon learning gained from mistakes. This process is very slow as managers learn through actions and formulate ideas accordingly. Additionally, this proves to be expensive because companies have to pay for their mistakes. Here one can take the example of Coca-Cola’s launch of New Coke, which did not appeal to Americans and they had to revive it to the traditional Coke. Power School Organizations that belong to the power school have their strategies developed by power pertaining to company’s competitive advantage like, brand name or capital power. Organizations that have a huge amount of market monopoly, like, Lancôme in the perfumes segment, majorly use brand value in order to charge premium prices. Cultural School Under this school, the corporate culture helps in formulation of corporate strategy, where involvement of employees is usually encouraged. For example, BMW gives its employees the freedom to take decisions at departmental level so as to promote quick decision making and moving fast giving the company a competitive advantage. Environmental School Organizations following the environmental school analyses strategy that is based on consideration of the external environment. This is a reactive procedure and can be quite successful. For example, Dell had launched low priced laptops during recession, which appeared to thrive considerably. Configuration School This school believes that companies keep on changing their pattern of decision making while formulating their strategy. The strategy appears to be innovative, but would require immense organizational flexibility in order to formulate strategy. Strategic Lenses Strategic lenses help in providing angles or four dimensions to strategy that are conducted and implemented at the corporate level. Strategic lenses assist in approaching problems from four different standpoints for providing solutions or raising issues (Kiechel, 2010). The strategic design lens is a process of determination through logic. The optimal strategy is chosen based on industry type, business environment and accessible resources. Development of such a strategy is driven by the top management. The analysis of an organization is led by the idea that organizations work in a certain pattern. There are three key lenses or perspectives of strategic design. Each one of these lenses is a representation of a separate perspective through analytical and social discipline. The first lens of strategic design offers a perspective, which lays focus on effectiveness and efficiency of the company for attainment of set goals as per company standards. For the past 45 years or so, Wal-Mart has explained their commitment towards the design perspective by consistently achieving their goals effectively and utilising the least possible resources for maintenance of their standards. This achievement has occurred through continuous improvements in supply chain processes of the organization so as to provide the every-day low prices to their clients and low costs for their company. In earlier years, this strategy of low prices and low costs helped in their expansion all across United States and also some developing nations; but presently, this strategy of the company seems to be failing to deliver in the home country. The strategic experience lens is more of a bottom-up approach wherein corporate strategy is based on experience of the organization. The experience of members of organization helps in developing a future organizational strategy. The example of low cost airlines can be cited here, where companies like, Air Asia, avail strategy of providing low cost international airlines services based on experience of other airline companies with provision of the same. The problem associated with experience strategy is that it deters innovation and the strategy developed as an experience can be quickly imitated for new entrants in the industry (Rogers, 2003). For strategy as an idea lens, emphasis is on the generation of new ideas for promotion of diversity within as well as around the company. Such a strategy develops from within the organization and does not follow a top down or bottoms up approach. The response of people to different uncertainties and change in the environment helps in development of strategy as an idea. Google is the ideal corporation that has been following the strategy as an idea lens. A recent example in this could be use of cloud computing for data storage over Gmail. This strategy allows for freedom of employees to express their ideas and is a process of strategy where organization is influenced both from within and the surrounding environment. Strategy as a discourse lens views strategy in terms of some sort of a language. The managers of such companies spend time mostly in communicating. Here, command over specific language of the company becomes a strategic resource and this in turn helps in determination of strategy and objectives to their personal views, thereby using them for gaining power, influence and authority over the decision. This very strategy makes company officials critical about the language for framing strategic proposals or discussing and debating strategic problems or even taking strategic decisions. A company that effectively employs strategy as a discourse is Infosys. Strategy as a discourse firstly makes an assessment of different available possibilities and once the decision is taken, tries to inspire confidence within that. The key drawback associated with this strategy is that it works very low on rationale decision making and fails to promote innovation. Comparison Strategy formulation is the key to failure or success of any organization. Nonetheless, any strategy is not complete without the presence of any strategic management insights. Hence, one can combine both strategy and strategic management, which is critical for success of an organization. The review presented in this paper of the strategic insights of Henry Mintzberg and Johnson, Scholes and Whittington has facilitated detailed understanding of ways to formulate the strategies. Mintzberg’s school of strategy provide perspectives as well as descriptive schools; whereas Johnson, Scholes and Whittington’s strategic lenses denote the frame of mind while formulating a particular organizational strategy. The strategic lenses reiterate the fact that there is a human element that is always involved in strategic formulation (Lindgren, 2009). Additionally, strategic lenses define strategies that can be taken at the corporate level alone, while strategy schools have strategy formulation insights at business and operational level as well. The schools of strategy, on the other hand, are either prescriptive or descriptive in nature. The prescriptive strategies indicate ways to manage business or to ideally frame strategies. This includes the design school, planning school and positioning school. Then again, descriptive schools are concepts that provide suggestions on ways in which strategies are to be developed. This basically elaborates upon ways chosen by organisations to develop their strategies. It is realised that key strengths associated with Mintzberg’s schools of thought is that they are and can be fruitfully used for origination and characterisation of strategy through application of the different schools of thought. In addition to that, they help in understanding and appreciating the difference between dissimilar approaches and their key respective benefits. On the flip side, drawbacks of the schools of thought for strategy are that it is not complete and there is scope for development of more schools of thought. Another limitation of Mintzberg’s strategy is that they are complex to understand for a business strategist who might be unnerved by the intricacies and aspects linked with 10 schools of thoughts (S. R. Clegg, Hardy and S. Clegg, 1999). One can also potentially add the resource based view and strategy dynamics to these schools. The key strengths of the strategic lenses are that it clearly defines the view of strategy from the manager’s perspective. However, this again is not comprehensive and can possibly have scope for more strategic lenses. Conclusion As discussed, strategy is a perception, which could be prescriptive, descriptive, analytical or a rational process for development and formulation of the decided course of action by an organization and its fruitful implementation. Strategy can also be taken as an experimental and emergent study, where the schools are yet to be defined and lenses are yet to be explored. Hence, strategy shall influence the thoughts of individuals as well as their perspectives, competencies and skills. Strategy is a process of many lenses, where each lens depicts a different viewpoint of the strategist altogether. Prescriptive strategy majorly concerns the planning and analytical processes. Descriptive strategy involves development of thought and promotion of innovative thinking in organizational context. It is a choice of the organization whether to be adequately flexible in order to support the desired strategy and work upon its implementation. Reference List Ambrosini, V. and Collier, N., 2007. Advanced strategic management: a multi-perspective approach. New York: Palgrave Macmillan. Clegg, S. R., Hardy, C. and Clegg, S., 1999. Studying Organization: Theory and Method. Connecticut: SAGE. Johnson, G., Scholes, K. and Whittington, R., 2008. Exploring Corporate Strategy: Text and Cases. Essex: Pearson Education Limited. Kiechel, W. 2010. The Lords of Strategy: The Secret Intellectual History of the New Corporate World. Boston: Harvard Business Press. Lindgren, M. 2009. Scenario Planning – Revised and Updated Edition: The Link Between Future and Strategy. New York: Palgrave Macmillan. Lynch, R., 2003. Corporate Strategy. London: Prentice Hall. Mintzberg, H., Lampel, J. and Ahlstrand, B., 2005, Strategy Safari: A Guided Tour through the Wilds of Strategic Management. New York: Free Press. Rogers, E. M., 2003. Diffusion of Innovations. New York: Free Press. Schein, E. H. 2004. Organizational Culture and Leadership. San Francisco: Wiley. Thompson, A. A. and Strickland, A. J. 2003. Strategic Management Concept and cases. New York: McGraw Hill. Read More