Planned Versus Emergent Approaches - Assignment Example

Marketing Research Approaches to Strategy Using business literature, a strategy can be said to be a broad course of action planned to enable an organization to achieve its objectives. This word was derived from a Greek word strategos, which means the art of the general or the commander of the armies (Price, 2007). The use of this word in business literature arose when it became evident to management researchers that in sharp contrast to economic models of perfect competition, business organizations engaged in the same activity and using technology, they often performed differently. A closer examination showed that different business organizations from the same industry adopted different approaches to products, distribution and organizational structures. As Fifield, (2007) explains, these differences, within similar market environments came to be known as ‘strategies’. According to Bhatia (2000), there are two different approaches to strategy formulation used among different business organizations; emergent and planned approaches. This paper focuses on understanding the two approaches and the extent to which they can be assist or impede the process of business and marketing planning depending on different circumstances. In addition, the paper seeks to explore the effectiveness of scenario thinking/planning and the game theory in assisting marketers to achieve a balance between the two approaches. Planned versus emergent approaches According to Bhatia (2000) the planned approach suggests that strategy formulation in business organizations precedes strategy implementation. Clearly, this approach suggests that organizations systematically create strategies that they pursue. This approach is based on the proposition that in order to solve organizational problems, a rational and systematic approach must be adopted. This may include collecting information, developing hypothesis, taking actions in order to achieve the desired goals and finally evaluating the action. But as Mathur (2010) explains, some strategy writers such as Mintzberg reject this view and argued that, rather than strategies being created deliberately by organizations, they can emerge without any formal planning. For instance, Mintzberg argues that ‘strategies can emerge without the explicit intention of managers as a result of cumulative effect of operational, day-to-day decision making and only in retrospect is the strategy identified from the pattern of actions taken.’ Precisely, the emergent approach recognizes that business environment is increasingly becoming turbulent and difficult to predict and hence, it stresses the unpredictable nature of change. This approach regards change as a process that unfolds through the interplay of multiple variables namely context, political processes and consultation, within an organization. According to Meek et al (2007) a successful change is more reliant on reaching an understanding of the complexity of the issues involved within a business organization rather than developing an approach. The emergence approach suggests that ‘organizational change can be regarded as continuous process of experimentation and adaptation aimed at matching an organization’s capabilities to the needs and dictates of a dynamic and uncertain environment (Meek et al, 2007). This is most effectively achieved through implementation of a number of small scale incremental changes which can eventually lead to major transformations. In short, the role of managers in this approach is different compared to the planned approach. Their responsibility lies on the creation of organizational structure and climate which encourages staff to embrace and initiate change, rather than to plan and implement change. How can the two approaches assist or limit marketing planning process? This question is well answered by Harris et al (not dated) and points out some of the uses of the two approaches which can assist the marketing planning process. To start with, the planned approach explains change in terms change phases. Change phases relate to the stages through which an organization moves in planned change. Notably, this approach makes distinction between different phases of change and the methods of facilitating change (Harris et al, not dated). Consequently, the planned approach is positively related to sales growth among firms with mechanistic structures and which operate in hostile environments. On the other hand, emergent approach to strategy formulation is not an intended approach. Rather, it pops in as an organization works towards achieving their intended objectives. This perspective is important for marketing managers since business circumstances keep on changing and organizations must adjust to the changes. Thus, emergent strategies are most positively related to sales growth among firms with more organic structures and also with more benign environments. This makes the two approaches useful in assisting the marketing planning process (Laing et al, 2002). According to Harris et al (not dated), though both approaches have their uses, they also have some limitations which can impede the marketing planning process. For example, the planned approach is based on the assumption that organizations are operating in stable and predictable environments. As such, change is believed to be moving from one state to another. However, in reality, this assumption is somewhat flawed given that we are living in a turbulent environment in which it is not easy for marketing managers to control the status quo. Another barrier associated with this approach is that there is high need to gain commitment from an organization and the subject of the change (Laing et al, 2002). This becomes quite difficult for marketing managers when applying the approach in large organizations due to the need for large scale research. A Balance between Planned versus emergent approaches is needed According to Meek, et al (2007) it is essential for business organizations to strike a balance between the two approaches to strategy. But, as the author explains, this is dependent on certain circumstances. As mentioned earlier, the planned approach assumes that organizations exist in different states and that planned change management can move an organization from one state to another. This argument is criticised since according to Meek, et al (2007) we are living in a turbulent environment in which it is difficult to control the status quo. Instead, many critiques of this approach argue that organizations operate in a more turbulent environment that is more unpredictable. Thus, they suggest that change is a process that unfolds through the interplay of multiple variables from within and from the external environment of an organization. But other strategic writers such as Burnes (1996) (as cited in Meek et al, 2007) suggest that planned and emergent approaches to change are in fact two ends of the same continuum. According to Burnes due to the high level of competitiveness in the current business environment, business organizations can no longer afford to maintain the status quo. Instead, a constant process of change has to be the status quo. However, there have been complexities in involved in managing change which has seen many business organizations hire change management consultants under such situations. The complexities arise from the need to for an organization to maintain focus on its strategic focus. So as to sustain competitive edge organizations have to be dependent on clearly communicated strategic focus. This is directly related to the communication of mission and vision of an organization. This stems from the need to channel the efforts of employees towards a targeted end goal. This demonstrates the importance of planned approach to strategy formulation (Stamford University not dated). However, when it comes to managing change, the clarity of the end state can become confusing in the minds of the employees leading to loss of the benefits of the change. This is due to changes that may appear but which were not in the original plan. In this regard, the importance of maintaining strategic focus (emergent approach) cannot be underrated. Therefore, there is need for organizations to maintain a balance between planned and emergent approaches to strategy formulation. Game Theory and Scenario Thinking/planning The Game theory is based on the understanding that a successful strategy cannot just depend on one firm’s position in industry, activities, capabilities or what an organization has. Instead, it depends on what others react to the moves of an organizations and how they think that organization will react to their moves (Baker & Hart, 2007). By fully understanding the dynamic with others, an organization can recognize win-win strategies that make it better off in the long-term. Of course, this requires signalling of tactics that avoid lose-lose outcomes. Moreover, if an organization understands the game, it can take actions to change the rules or players of the game in its favour. In brief, business organizations can change their game of business in their favour by changing the scope of the game, the main players, tactics, rules that give a game its structure and the value that each player brings to the collective game (Cooper & Nakanishi, 1988). In regard to marketing planning, the game theory helps to analyze dynamic and sequential decisions at the tactical level. The main value of game theory in market planning strategy is to emphasize the importance of thinking ahead, thinking of the alternatives, and anticipating the reactions of other players the "game” of a given organization. In marketing planning the game theory is applied in areas such as new product introduction, licensing versus production, pricing, Advertising and regulation. On the other hand, scenario planning is a tool that enables organizations to look at the factors impacting on their business and its environment (Cockcroft, 2000). To be more precise, business organizations need to make plans to ensure their survival. They need to anticipate the future and make preparations for events that could happen in the future. Classical approaches to forecasting include tools such as trend analysis using moving averages in forecasting the future for example. These tools are based on assumptions that business will continue in a similar fashion to the future as it has been in the past and how it is in the present. Unfortunately, the future is not quite predictable, especially when one needs to think of 10 or more years ahead. But businesses organizations often do need to make plans for many more years in the future (Mayer, 2007). To make plans for what could happen in the future, business organizations use scenario planning, which uses factors impacting their businesses and their environments to construct pictures or scenarios of possible and plausible futures. Many business organizations employing this tool have reported remarkable successes. For example, the Shell Company has used scenario planning for many years and predicted the oil crises of the 1970s and the changes that took place prior and after the fall of the Soviet Union in the early1990s (Ringland & Young, 2006). As mentioned earlier, when it comes to formulating strategies, the management of any organization can make choice between planned and emergent approaches depending on circumstances. However, the choice made between the two approaches would be more or less suitable depending on the strategy formulation framework that is used (Davies, 1999). An organization can opt for the game theory or scenario planning. Under the game theory, the emergent approach to strategy is more suitable as the organization reacts to the changing nature of the external environment. But as noted earlier, business organizations cannot afford to maintain status quo under the current business environment, owing to the high level of competitiveness. This is attributed to the resultant high–paced change in the external environment. This means that the effectiveness of a strategic focus on is not likely to hold over a long term unless an organization structure anticipates and adopts changes in the external environment through managing change (Davies, 1999). In short, though emergent approach is more suitable under the game theory, it is supposed to be an alternative to the planned approach. On the other hand, under scenario planning framework, business organizations are advised to make use of a combination of the two approaches (Davies, 1999). For example, the planned approach is necessary in the formalization of the process of scenario planning. However, when possible states are anticipated through the process of scenario planning, the management of any given business organization has to apply the emergent approach in order to manipulate the decision variables. Therefore, the planned and emergent approaches to strategy formulation under game theory and under scenario planning frameworks facilitate the process of striking a balance between the two alternatives. Conclusion In conclusion, the modern business environment is characterized by intense competitiveness and therefore business organizations have to constantly formulate strategies in order to develop and maintain a competitive edge. When it comes to formulating strategies, an organization can follow either planned or emergent as is has been demonstrated in this discussion. The planned approach involves collecting information, developing hypothesis, taking actions in order to achieve the desired goals and finally evaluating the action within an organization. On the other hand, the emergent approach recognizes that business environment is increasingly becoming turbulent and difficult to predict and hence, it stresses the need for organizations not to control change but to allow it to pop in. As mentioned earlier, these approaches can assist or impede marketing planning process within a given organizations. In order to derive maximum benefits from the approaches, it is vital to maintain a balance between them. The game theory and scenario planning frameworks facilitate the process of striking a balance between the two alternatives to strategy formulation. References Baker, M. J. & Hart, S. (2007) The Marketing Book, Butterworth-Heinemann, Burlington,USA Bhatia S. C., (2000) Retail Management, Atlantic Publishers & Dist, Delhi Cockcroft, A. (2000) Scenario planning- part 2, Sun Blue Prints, Antonio, retrieved from http://www.sun.com/blueprints/0300/planning2.pdf (17 May 2011) Cooper, L. G. & Nakanishi, M. 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