The Value of Individual Strategic Decisions - Essay Example

Strategy as Practice: The Value of Individual Strategic Decisions Introduction Strategic decision making is an essential element in the success of any organization. Changes in organizations that are meant to improve certain areas are based on strategic decisions. These are carefully planned and discussed among the integral members of the organization. In the past, much of the work that theorists and management experts have done have focused on strategies aimed at the macro-levels of the organization. What this means is that strategies are created with the goals of the whole organization in mind. The actions to be taken are derived from general objectives of the company. More importantly, the success of the implementation is based on the general goals taking little consideration of the individual steps and decisions that have been made towards the achievement of such goals. In such case, the role of managers is not given great importance since what is being considered is the achievement of the objective and not the steps taken in achieving it. However, there has been a shift in the school of thought regarding strategic decisions in organizations. A new principle has emerged and it has come to be known as strategy as practice. According to the British Academy of Management, "Strategy-as-practice investigates strategy at close range, as it is shaped by multiple actors, their actions and practices, and the strategic consequences these have for the firm." What this means is a shift from a macro perspective to a micro level of analysis wherein the various factors involved in the planning and implementation of strategies are studied and analyzed. In the subject of strategy as practice, various elements of the strategy are analyzed. In this case, the role of managers and their individual decisions are given more attention and significance. The proponents of strategy as practice have expressed various yet similar views regarding the value of the individual decisions of managers in the successful implementation of the strategy. One group of authors that have expressed such view is that composed of Susan Miller, David Wilson and David Hickson. According to them, "Individual strategic decisions ..... are the tangible essence of strategy." (2004) Various management theorists have explored the approach of strategy as practice. Many of them share the same views as those of the authors mentioned above. Moreover, literature regarding the said area of study has also grown in abundance. In order to fully understand strategy-as-practice, it is vital to explore some of the literature that has been written regarding the topic. In this paper, a review of literature regarding strategy as practice will be undertaken. Particular attention will be given to determining what other authors have to say with regards to the statement, "Individual strategic decisions ..... are the tangible essence of strategy." The analysis of the related literature will be based on the aforementioned statement. Finally, the said review will serve as a critique and an explanation of the said statement. Individual strategic decisions..... are the tangible essence of strategy The statement that serves as the focal point of this discussion is taken from the article written by Miller, Wilson, and Hickson with the title, "Beyond Planning: Strategies for Successfully Implementing Strategic Decisions." The said article came out in the journal, Long Range Planning in 2004. In the article, the authors discussed a study they conducted wherein the analyzed managerial decisions made in UK firms. Such study was done to support their assertion that what managers do, and the kind of organization they lead, matter in terms of achieving stated objectives. In this study, the role of managers and the decisions they make in the implementation of strategies were cited as some of the most valuable elements in the strategy itself. This is parallel to the statement that this paper plans to discuss. Strategy as practice: Micro-strategizing Strategy-as-practice takes into consideration individual decisions made. As such, the role of managers and the decisions and action that they take becomes ever more relevant and important. In a way, strategy-as-practice require managers to strategize on their own in order to come up with an actions and decisions that are geared towards the realization of the firm's goals and objectives. As such, strategy-as-practice may be considered as micro-strategizing wherein strategies are developed on smaller scales in order to meet the objectives on the organization-wide scale. The shift to such way of thinking is expressed by Johnson, Melin and Whittington in their Journal of Management Studies article where they said, It is time to shift the strategy research agenda towards the micro: to start not from organizations as wholes - corporations, business units and so on - but from the activities of individuals, groups and networks of people upon which key processes and practices depend (2003). In the said article, Johnson et al argued that such approach requires a close engagement with practice thereby relating to strategy-as-practice. The said authors believed that strategizing should shift focus to; events or episodes that are typically critical to strategy development, for instance board-meetings or away-days; activities and processes which commonly underpin and explain competitive advantage, for example the transfer of knowledge; or the ways in which the standard tools and techniques of strategy, from portfolio planning to Porterian analysis, are actually employed (Johnson et al, 2003). The said article highlights the importance of the small scale actions that, when combined, tantamount to the objectives that the macro-strategy aims to achieve. More importantly, the said article points out that the integral elements of strategic practices are not those that were conceived on a organization-wide scale but those that take into account the smaller-scale actions and decisions. Strategy-as-practice: Communities of practice Paula Jarzabkowski is one of the leading proponents of the strategy-as-practice approach. She has written numerous literature that discuss the various principles, elements, and factors that come into play in strategy-as-practice. In one of her published works, Jarzabkowski discussed strategy as practice in relation to the social theory. She gave particular emphasis on two significant elements in social theory, recursiveness and adaptation. Moreover, Jarzabkowski analyzed strategy as practice by studying practice in both the micro and macro contexts of the firm. Basically, strategy as practice is found in the localized or micro-context of the firm. Jarzabkowski named such as communities of practice wherein each community has a distinct set of practices. The author further said that according to the social theory, "The social nature of communities constitutes an adaptive learning opportunity that involves new forms of practice" (Jarzabkowski, 2002). What this means is that the practices of the localized group adapts to changes in both make-up and environmental or situational shifts. One may wonder how such principles are related to the subject of strategy as practice. One will find the relationship when one considers the resource-based view which Johnson et al likewise discussed. According Jarzabkowski, "The concept of localised practice is present in the resource-based view (RBV), which posits that localised, and hence distinctive strategic contexts are value-creating." This means that small-scale decisions or actions create value in the macro-context. Localized practice may include decisions and actions that are made within the various small groups in an organization including departments, teams, and work groups. As such, the decisions made by managers even at the lowest level are considered valuable and integral. Managers learn by virtue of observing and analyzing what goes on around him including the people he manage and the productivity of his group. In a way, he adjusts his decisions based on what he sees around him or on "what people do" around him. This translates to the adaptive and localized practice that Jarzabkowski discussed and gave importance to. Criticisms of Strategy as Practice In as much as strategy as practice has found support in various management analysts and theorists, there are still certain theorists that have expressed their criticism over certain elements of principles of strategy as practice. One of these critics is Chia (2004). In his view, strategy as practice theory needs to consider practice as more than visible routines and observable practices. Chia considered various principles that past writers have focused on including Heidegger's notion of dwelling, Bourdieu's notion of habitus, and Dreyfus' idea of style. Chia's perspective on the true nature of practice was that it was the "inarticulate but ever-present background that is vital for us to negotiate the world around us and make sense of our lives" (2004). Furthermore, he pointed out that the logic of practice contrasts markedly with the means-end logic more characteristic of rationalistic explanations. Practices should be approached, not as logical actions inspired by deliberate intentions and purposes, but as skilled, improvised coping. Accordingly, Chia suggested that particular discussions, meetings, and presentations about strategy should not necessarily be studied as strategy-shaping events in themselves, but as "mere manifestations of an underlying unconscious pattern of dispositions that provides consistency to managerial actions that we might more accurately call 'strategy-in-practice'."(2004). To conclude his work, he stated: "strategizing-in-practice, it then curiously turns out, becomes a matter of style not content or substance" (p.33). Chia's criticism of strategy as practice points out that the said approach has taken the term "practice" in a totally different context. Chia believed that practices are the results of coping and not of careful planning or thinking. In doing so, Chia contradicts the belief that practices are learned and results of adaptation. Moreover, in his critique, Chia goes against the approach's belief that practices and decisions in the small-scale define what the strategy at the organizational level is and what becomes of it. Thus, Chia's assertions go against the principles that the central statement being discussed in this paper supports. Conclusions In this paper, several literatures regarding strategy-as-practice have been discussed with the aim of explaining and criticizing the statement, "Individual strategic decisions..... are the tangible essence of strategy." It was pointed out that, "Strategy-as-practice investigates strategy at close range, as it is shaped by multiple actors, their actions and practices, and the strategic consequences these have for the firm." The statement in question focuses on one of the multiple factors that are analyzed in strategy-as-practice, individual decisions that managers make. This paper has pointed out that the decisions and actions that managers make are integral and essential elements to the firm's strategy. These decisions have been characterized in various ways through the discussion of related literature. The individual strategic decisions have been viewed as adaptive localized practices and as micro-strategizing as well. In both cases, the value of such decisions was pointed out. Despite the criticisms regarding the strategy-as-practice approach, its value in today's management practices cannot be mistaken. More importantly, the continued growth of such approach has placed increasing importance and value on the individual decisions that managers make. Bibliography British Academy of Management, Strategy as practice, [online] 7 May 2006, available at: . Chia, R. (2004) "Strategy-as-practice: reflections on the research agenda" European Management Review, 1, 29-34. Hendry, J. (2000) "Strategic decision making, discourse, and strategy as social practice" Journal of Management Studies, 37, 955-977. Jazabkowski, P. (2003) "Strategic practices: an activity theory perspective on continuity and change". Journal of Management Studies, 40, 23-56 Jarzabkowski, P. (2004) "Strategy as practice: recursiveness, adaptation and practices-in-use" Organization Studies, 15, 4, 529-560 Johnson, G., Melin, L. and Whittington, R. (2003) "Micro strategy and strategising: towards an activity-based view". Journal of Management Studies, 40: 3-22 Whittington, R. (1996) "Strategy as practice" Long Range Planning, 29, 731-735 Whittington, R. (2002) "The work of strategising and organising: for a practice perspective" Strategic Organization 1, 119 - 127 Read More