Strategic Management - Contrasting the Prescriptive and Descriptive School of Strategy by Mintzberg - Literature review Example

Strategic Management

• Comparing and contrasting the prescriptive and descriptive school of strategy proposed by Mintzberg (1998)
• Introduction

Strategies formulated by firms primarily intend to focus on competitive advantages and business performance (Bazerman and Neale, 2011). The main purpose of the strategy is to meet the organisational objectives by maximising the satisfaction level of customers. Thus, more precisely, it can be stated that strategy is a business plan that enable firms to achieve the organisational goals. In order to obtain the desired results, the firms follow specific steps or approaches that are known as strategic management. As mentioned by Panagiotou (2008), strategic management is a managerial process that includes forming a vision, setting feasible objectives, crafting strategies and implementing them in an effective way. Hence, it can be inferred that a good strategy is useless without strategic management.

The strategies can be segregated into corporate level strategy, business level strategy and operational level strategy. Corporate level strategies focus on fulfilment of the overall goals and objectives of the organisation. According to Priem and Butler (2011), with the help of corporate level strategies, the companies intend to add values in the different parts of the organisation. Diversification into new markets or new products can be considered as an example of the corporate level strategy. In contrast, business level strategies concentrate on improving the competitive advantages of the particular firms in a particular market (Amit and Schoemaker, 2011). For example, to attract the health conscious customers, McDonald’s has started to offer low calorie food items to their customers. On the other hand, operational strategy focuses on improving the people, processes and other physical resources (Baraldi, et al. 2007). In order to formulate the effective operational strategies, the managers conduct a detailed analysis on the buying pattern of the customers and identify the demand of the customers.

A number of scholars such as Henry Mintzberg and Richard Whittington have presented different schools of thought regarding the development of strategy. Among the ten schools of strategies proposed by Mintzberg, three are prescriptive and seven are descriptive. This discussion intends to conduct a comparative study between the prescriptive and descriptive school of strategy.

• Analysing the similarities and dissimilarities between the different schools of strategy

Prescriptive schools: Prescriptive schools of thought mainly focus on the formulation of the strategy. More precisely, it can be stated that the prescriptive school of thought indicates the methods that the business needs to follow to formulate a particular strategy (Mintzberg, Lampal and Ahlstrand, 1998). Prescriptive school of thought can further be sub-divided into the design school, the planning school and the positioning school (Mintzberg, Lampal and Ahlstrand, 1998).

Descriptive schools: It reveals the concepts of how the organisations can implement the developed strategies. Descriptive schools of thought are separated into the entrepreneurial school, the cognitive school, the learning school, the power school, the cultural school, the environmental school and the configuration school.

According to Mintzberg and Lampel (2009), the design school indicates that the strategy needs to be formulated with the help of tools and techniques such as SWOT analysis and Ashridge Mission model. The firms that follow this particular concept carry out SWOT analysis and identify their strengths, weaknesses, opportunities and threats. This particular model is helpful in case of the stable the business environment and it intends to determine the internal and external analysis. However, Dorst and Dijkhuis (2007) criticised that design schools of thought is more inclined to the organisation rather than its employees. Most importantly, design schools of thought do not prioritise on innovation. However, it has been found that for the success of an organisation, innovation plays a crucial role (Ansoff, 2011).

In contrast, entrepreneurial schools of thought reveal that the firm that follows this process for developing strategy have a visionary leader who formulates the strategy and the entire organisation strictly follows the strategy. Bell, Raiffa and Tversky (2008) cited that this particular school of thought is stimulated by biology. This method is quite effective compared to the design school of thoughts. However, lack of involvement of the other staff can be considered as one of the most important drawbacks in this type of thought process. As the employees have been ignored during the strategy formulation process, they may not respond during implementing the strategy. In this case, the example of Microsoft can be considered that follows the strategy developed by Bill Gates.

The planning school of thought analyses the present business situation and concentrates more on the implementation of the strategy (Baraldi, et al., 2007). Like the design school of thought, the planning school also considers the external factors such as competitors, political environment etc. while formulating the strategy. However, unlike the design school, the planning school provides importance to the innovation. Moreover, the planning school stresses on the brainstorming session and sets feasible goals and objectives. The companies that follow this type of thought process allocate the resources according to the needs of the business. In this regards, Priem and Butler (2011) mentioned that planning school of thought process is mostly applicable to the contemporary business environment. Moreover, this thought process has been motivated by the urban planning. However, this type of thought process has certain drawbacks. Firstly, this type of thought process creates a lot of conflicts between managers and the staff. Secondly, in this type of thought process, the managers are required to observe each minute aspect before implementing the strategy. The companies are required to focus on the execution part of the strategy as the success or the failure of the firms depends on it. Moreover, for this type of thought process, an effective communication channel is required.

In case of the cognitive school of thoughts, companies develop business strategies based on the psychological needs of the customers (Amit and Schoemaker, 2011). More precisely, it can be inferred that in this type of thought process, the companies conduct a detailed study on the consumers’ behaviour and act according to the particular situation. Like the planning and design school of thoughts, in this case also, the managers build the strategies after conducting an exhaustive research on the external business environment. However, Anderson, Rungtusanatham and Schroeder (2009) argued that although the cognitive school of thoughts intend to assess the psychology of the customers; it may not produce the finest result in the existing business environment. Moreover, cognitive school is quite time consuming compared to that of the other school of thought. Conducting the extensive market research is also considered quite expensive. The cognitive school of thought is based on the assumptions. Therefore, in some of the cases, it can provide wrong output.

In contrast to the cognitive school of thoughts, the learning school of thought process is based on the lessons learnt from the mistakes of the customers. Rubenstein-Montano, et al. (2011), cited that in learning school of thought process, the managers of the concerned organisation formulate any particular strategy after conducting the mistakes. However, this type of thought process is quite slow compared to the others. The learning process of the managers can consume a significant amount of time. Like the cognitive school of thought, learning thought process also includes a costly market research. For example, after Coke has discovered that providing advertisements in the regional languages is quite ineffective in the Islamic countries, they have changed their promotional strategy by providing the advertisements in the regional languages of the Muslim countries.

In order to change the current position of the company, the managers often focus on the positioning school of thought (Dean and Bowen, 2009). In this strategy, the main focus is given on developing the strategy that can completely change the current position of the company and brand image of the organisation. Huff and Reger (2008) identified that in case of positioning business strategy; the managers formulate the strategies only to change the position of the firm. This approach of formulating strategy is completely different than the other two types of thought process under prescriptive school of thought and has followed the military strategy. However, positioning strategy can be applicable only to the larger firms. Unlike the other prescriptive thought process, this particular type of approach ignores the external factors related to the business and it primarily focuses on profit maximisation. For example, Tesla Motors has focused on the automated or driverless cars to strengthen their business position.

The power school of thought concentrates on formulating the strategies based on the power of the organisation. According to Baraldi, et al. (2007), the companies utilise power as a competitive advantage in this type of thought process. The power of the company such as brand image or huge capital base can be used while developing strategy according to this approach. This type of approach has been influenced by the political science. Like the entrepreneurial thought process, this school of thought also depends on the leaders who believe in the power of the organisation (Boxall, and Purcell, 2009).

On the other hand, in case of the cultural school of thought process, the managers develop strategies based on the corporate culture. In contrast to the entrepreneurial school of thought, the cultural school of thought gives enough priority to the employees of an organisation. However, in this case also, the organisation is being guided by visionary leaders. This particular thought process is being influenced by anthropology (Hansen and Wernerfelt, 2009). The decisions related to the merger and acquisition related activities can be considered on the basis of cultural school of thought process (Smaczny, 2011).

The environmental school of thought considers the political, social, economical and technological factors while formulating the strategy (Sandberg, 2012). This type of thought process is similar to the design school of thought from perspective of external factors. However, ignorance of the internal factors can be considered as a major pitfall in this type of approach. Low-priced products of Wal-Mart can be treated as a result of the environmental school of thought.

The configuration school of thought focuses on the changing decision making pattern of the organisations for developing the strategy (Bhimani and Langfield-Smith, 2007). The innovative thought process can be treated as a major aspect for this type of thought process. However, a flexible organisational structure and employee base are essentials in this type of thought process.

Based on the above comparative discussion about the different schools of thought for developing strategies, the following additional differences between prescriptive and descriptive school of thoughts can be identified:

Methods of direction: In the case of prescriptive school of thoughts, the decisions are made by the upper stratum of the companies (Mintzberg, Lampal and Ahlstrand, 1998). As a result of that, the subordinates have no such roles in the decision making process. Instead, the subordinates merely follow the direction of the senior managers. In contrast, for descriptive school of thoughts, the process of strategic management starts from the bottom of the organisation and moves towards the upward direction.

Substance vs. method: One of the major differences lies between the prescriptive and descriptive school of thought in the formulation of strategy. Mintzberg, Lampal and Ahlstrand (1998) cited that in the case of prescriptive school thought, the managers focus on the process of strategy formulation. Utilisation of the correct process has been given enough importance in prescriptive school of thoughts. However, for descriptive school of thought, the managers’ stresses on the substance or matter of the strategy rather than the methods used to formulate such strategies.

Timing of planning: The managers, who believe in the prescriptive school of thought, do not consider the changing environment while implementing the strategies. Hence, in this case, the strategies are planned well in advance (Mintzberg, Lampal and Ahlstrand, 1998). On the other hand, the managers who follow the descriptive school of thought accept the uncertainty of the business environment. Therefore, in this case, the managers do not stick to a fixed or unchanged plan and prefer to take the impulsive decision.

Difference in the outcome: A significant difference can also be observed in the expected results from the prescriptive and descriptive school of thoughts. As identified by Mintzberg and Lampel (2009), the followers of the prescriptive school of thought desire to develop a strategy that can improve the business performance. In contrast, the managers who follow the descriptive school of thought do not solely consider the improved business performance through the formulation of the strategy. Instead, in the case of descriptive school of thought, the managers concentrate on the survival of the firms and want to learn from the previous experiences.

• Strategic lenses

Johnson, Scholes and Whittington have presented a slightly different approach to evaluating the formulation of strategies (Johnson, Scholes and Whittington, 2013). Based on the circumstances, the strategy development in an organisation can be classified as: strategy as design, strategy as experience strategy as ideas and strategy as discourse.

Strategy as design: In this case, strategy formation is represented as a design process (Johnson, Scholes and Whittington, 2013), where strategies are shown as the amalgamation of logical, analytical and planned processes. The main characteristics of strategy formation as a design method are mentioned as below:

• It is a prescribed and purposeful method.
• In this case, the managers think about the strategies, make proper choices and it precedes the implementation process.
• The strategies are logical and transparent.
• In this case the strategic choices are made by the senior management. Thus, the senior managers can be considered as the strategic decision makers.

Most importantly, this type of strategic formulation is suited for the hierarchical management system where staff is habituated to be guided by their senior managers. Thus, it is also considered as a premeditated strategic process.

Strategy as experience: In this case, the strategies are being formulated on the basis of past experience. Johnson, Scholes and Whittington (2013) identified that this method of strategic development is stimulated by the knowledge and organisational culture. This process has similarities with the incremental strategy. However, this method is often criticised during the transition phase of strategies and it is termed as strategic drift (Scherer, 2008).

Strategy as ideas: The previous two methods of strategy development have aimed to resolve the conventional problems in the organisation. However, for obtaining the competitive advantages, the firms are required to introduce innovative ideas. For this purpose, strategy as ideas has been evolved.

The major characterises of this process are mentioned as follows:

• The process needs to focus on new ideas. It is not necessarily been generated by the senior management. Rather, an individual can also introduce the same ideas.
• It is motivated by the by the diversified business environment (Johnson, Scholes and Whittington, 2013). A combination of variety and diversity is the key to this method.
• Traditional hierarchical process of organisation cannot encourage this method. It is similar to the emergent strategy introduced by the companies.

Strategy as discourse: This process includes selection of a particular strategy among a pool of strategies (Hansen and Wernerfelt, 2009). The selection is often made on the basis of confidence. However, this method is criticised due to low rationality and innovative thinking. In this case, language is treated as a resource to communicate with the managers. High amount of legitimacy is the main nature of this process.

• Conclusion

The report has been initiated with the purpose of depicting the similarities and differences between the prescriptive and descriptive school of thought. The discussion has found that formulation of the strategy and implementing it in a proper way is the main purpose of the strategic management. In order to attain competitive edge over the rivals and survive in the market, the firms formulate and implement effective corporate, business or operational level strategies Most of the schools of thought have indicated that an effective research on the external business environment is important to develop strategies. In addition, some of the approaches have also indicated the relevance of a leader who can set the vision of the organisations. However, for the success of strategies, the customer centric approach has played a vital role. The main differences between the prescriptive and descriptive schools of thought lie in the direction method, content, time of planning and expected result. Apart from that, the discussion also included the strategy lenses incorporated by Johnson, Scholes and Whittington. Based on their approach, the development of strategies can be classified into: strategy as strategy as design, strategy as experience strategy as ideas and strategy as discourse. All the four approaches offer a different insight into the organisational strategic management process. Selection of any one of the strategic lenses depends on the particular context. Hence, the managers are required to be prepared for utilising all the four approaches based on the necessity.

• Reference list

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