Organisation & Environment
Inhoud
College 1 Introduction.........................................................................................................................................1
College 2 Design School & Planning School.........................................................................................................1
College 3 Positioning School & Entrepreneurial School.......................................................................................6
College 4 Cognitive School & Learning School...................................................................................................11
College 6 Network theory..................................................................................................................................18
College 7 Power School.....................................................................................................................................23
College 8 Cultural School...................................................................................................................................28
College 9 Environmental School........................................................................................................................32
College 10 The configuration school..................................................................................................................37
College 11 Overview..........................................................................................................................................42
College 1 Introduction
We will focus on the different perspectives of how strategy is formed in organizations
Prescriptive: it should be like this
College 2 Design School & Planning School
Vision statement: what do we want to become?
Mission statement: what is our business?
Vantage points on strategy
"... the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the
allocation of resources necessary for carrying out these goals" – Alfred Chandler
“ Strategy is the art of working out how you'll "win" in business and in life.” – popular saying
What is strategy?
- Plan: a consciously intend course of action to deal with a situation.
o Ik plan voor lange termijn, realistisch
- Ploy: a maneuver to outwit an opponent.
o Aanpassingen op je originele plan
1
, - Pattern: a pattern of actions that emerge, unintended over time.
o
- Position: the way a firm relates to its competitive environment.
- Perspective: the way that managers in a firm see themselves and the world around them.
Categorizing the schools - three groupings
1. Prescriptivism
- Concerned with how strategies should be formulated rather than with how they necessarily do form
Strategy formation as:
- A process of informal design, essentially one of conception.
- A more detached and systematic process of formal planning.
- Less concerned with the process of strategy formation than with the actual content of strategies, focusing on the selection
of strategic positions in the economic marketplace.
2. Descriptivism
- Not concerned with ideal behaviour, but describing how strategies do, actually, get made
- Is there but not made very explicit from the start
- Making sense what others are doing, reactive
Strategy formation as:
- Cognitive psychology to enter the strategist's mind.
- Emergent in small steps, as an organization adapts, or "learns.“
- A process of internal/ external negotiation.
- Collective and cooperative.
- Reactive, with the initiative with the external context.
- Entrepreneurial
3. Configurative
- Configuration: adapt to the situation, combine.
Strategy formation as:
- A combination of “the best of both worlds”
Four basis approaches to strategy formation
Design school: characteristics and premises
1. Strategy formation as a deliberate process of conscious thought
a. Can prepare for, have a meeting
2. Strategy to attain match, or fit, between internal capabilities and external possibilities
3. Responsibility for strategy rests with the CEO
4. The process of strategy formation must be kept simple and informal
a. Can not plan it in detail, this is what we going to do
b. Als de implementatie niet goed is, werkt je bedrijf niet en ga je failliet
2
, 5. Strategies should be unique
6. Strategies should be clear, simple and specific (Tregoe and Tobia, 1990).
a. Specific enough to go up on
7. Separation of formulation from implementation
8. A strategy has first to be fully formulated and can then be implemented
Strategists
- Gather information
- Analyse information
- Organize information
- From that simple strategy formation
Plot on 5 P’s
Design school is internally focused
Design school: ideal course of strategy formation
1. Analysis: SWOT
2. Creation
3. Evaluation and choice
4. Implementation
Structure follows strategy
“Until we know the (new/ revised) strategy we cannot begin to respecify the appropriate structure”
1. Strategy as the determination of long-term goals and objectives, the adoption of courses of action and allocation of
resources to achieve goals
2. Structure as the design of the organisation through which strategy is administered.
3. Changes in an organisation's strategy lead to new administrative problems which require a new or refashioned structure for
the successful implementation of the new strategy.
Summarizing: Assumptions of the design school
CEO is the strategist
1. The CEO has complete information and is absolutely informed
2. The CEO has the capacity to process all information
3. The environment can always be understood
4. Situations and environments are predictable
5. All information is documented and available
6. Strategy is centrally formulated
Summarizing: What do Mintzberg et al. exactly criticize?
- Structure follows strategy (Chandler 1962) >>> “Wiping the slate clean?”
- Structure scarcely malleable
- Assumption of universality
- Learning ignored by only analytically assessing environment
- Making strategy hierarchical, centralized and explicit = promoting inflexibility
- Separation of formulation from implementation = detaching thinking from acting
Design school: contributions
- Vocabulary and tools
- Grand strategy
- Basic notion: fit between external opportunities and internal capability
- Started to promote the relevance of strategies in organizations and strategy as a field of research
PLANNING SCHOOL: a definition of planning
Planning is a formalized procedure to produce articulated results by using an integrated system of decisions
- Measure, understand
3
, Comparing business strategy and military strategy
- Strategic planning started in the military
- Similarity
o Both business and military organization must adapt to change and constantly improve
- Difference
o Business strategy assumes competition
o Military strategy assumes conflict
Planning school: characteristics and premises
- Strategy is based on rational and systematic “science”
- Rules of thumb are replaced by insights into regularities
- Strategy forming is a conscious, formal and controlled process
- Strategy must be composed into discrete steps
- Strategy forming is supported by checklists and analytical techniques
- Rational and systematic approach = influence of Taylorism
- Organizations are like machines – “machine metaphor” (Taylorism)
- Organization have a clear-cut system of values, competencies and reward system
- These are stable and easy to recognize
- Responsibilities are split up
- Planning and implementation are two separate steps
- The environment of organizations is stable and predictable
Operational planning
- Links strategic goals to tactical goals and objectives.
- Describes:
o Milestones,
o Conditions for success
o Operational planning / phasing
- Links the strategic plan with the activities the organization will deliver and the resources required to deliver them.
- Operational plans establishes the activities and budgets for each part of the organization for the next 1 – 3 years.
Planning school: strategy as a formal process
Origins: Ansoff: Corporate Strategy Predict and prepare
Ansoff’s strategies for diversification
- Harvard Business Review article: 'Strategies for Diversification’
- Simplified competitive position of firms by defining two dimensions:
o the products - what it sold;
o the markets - to whom they are sold.
- Long-range planning necessary to drive managerial decision making when speed of change exceeds a firm's ability to
respond
4
Inhoud
College 1 Introduction.........................................................................................................................................1
College 2 Design School & Planning School.........................................................................................................1
College 3 Positioning School & Entrepreneurial School.......................................................................................6
College 4 Cognitive School & Learning School...................................................................................................11
College 6 Network theory..................................................................................................................................18
College 7 Power School.....................................................................................................................................23
College 8 Cultural School...................................................................................................................................28
College 9 Environmental School........................................................................................................................32
College 10 The configuration school..................................................................................................................37
College 11 Overview..........................................................................................................................................42
College 1 Introduction
We will focus on the different perspectives of how strategy is formed in organizations
Prescriptive: it should be like this
College 2 Design School & Planning School
Vision statement: what do we want to become?
Mission statement: what is our business?
Vantage points on strategy
"... the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the
allocation of resources necessary for carrying out these goals" – Alfred Chandler
“ Strategy is the art of working out how you'll "win" in business and in life.” – popular saying
What is strategy?
- Plan: a consciously intend course of action to deal with a situation.
o Ik plan voor lange termijn, realistisch
- Ploy: a maneuver to outwit an opponent.
o Aanpassingen op je originele plan
1
, - Pattern: a pattern of actions that emerge, unintended over time.
o
- Position: the way a firm relates to its competitive environment.
- Perspective: the way that managers in a firm see themselves and the world around them.
Categorizing the schools - three groupings
1. Prescriptivism
- Concerned with how strategies should be formulated rather than with how they necessarily do form
Strategy formation as:
- A process of informal design, essentially one of conception.
- A more detached and systematic process of formal planning.
- Less concerned with the process of strategy formation than with the actual content of strategies, focusing on the selection
of strategic positions in the economic marketplace.
2. Descriptivism
- Not concerned with ideal behaviour, but describing how strategies do, actually, get made
- Is there but not made very explicit from the start
- Making sense what others are doing, reactive
Strategy formation as:
- Cognitive psychology to enter the strategist's mind.
- Emergent in small steps, as an organization adapts, or "learns.“
- A process of internal/ external negotiation.
- Collective and cooperative.
- Reactive, with the initiative with the external context.
- Entrepreneurial
3. Configurative
- Configuration: adapt to the situation, combine.
Strategy formation as:
- A combination of “the best of both worlds”
Four basis approaches to strategy formation
Design school: characteristics and premises
1. Strategy formation as a deliberate process of conscious thought
a. Can prepare for, have a meeting
2. Strategy to attain match, or fit, between internal capabilities and external possibilities
3. Responsibility for strategy rests with the CEO
4. The process of strategy formation must be kept simple and informal
a. Can not plan it in detail, this is what we going to do
b. Als de implementatie niet goed is, werkt je bedrijf niet en ga je failliet
2
, 5. Strategies should be unique
6. Strategies should be clear, simple and specific (Tregoe and Tobia, 1990).
a. Specific enough to go up on
7. Separation of formulation from implementation
8. A strategy has first to be fully formulated and can then be implemented
Strategists
- Gather information
- Analyse information
- Organize information
- From that simple strategy formation
Plot on 5 P’s
Design school is internally focused
Design school: ideal course of strategy formation
1. Analysis: SWOT
2. Creation
3. Evaluation and choice
4. Implementation
Structure follows strategy
“Until we know the (new/ revised) strategy we cannot begin to respecify the appropriate structure”
1. Strategy as the determination of long-term goals and objectives, the adoption of courses of action and allocation of
resources to achieve goals
2. Structure as the design of the organisation through which strategy is administered.
3. Changes in an organisation's strategy lead to new administrative problems which require a new or refashioned structure for
the successful implementation of the new strategy.
Summarizing: Assumptions of the design school
CEO is the strategist
1. The CEO has complete information and is absolutely informed
2. The CEO has the capacity to process all information
3. The environment can always be understood
4. Situations and environments are predictable
5. All information is documented and available
6. Strategy is centrally formulated
Summarizing: What do Mintzberg et al. exactly criticize?
- Structure follows strategy (Chandler 1962) >>> “Wiping the slate clean?”
- Structure scarcely malleable
- Assumption of universality
- Learning ignored by only analytically assessing environment
- Making strategy hierarchical, centralized and explicit = promoting inflexibility
- Separation of formulation from implementation = detaching thinking from acting
Design school: contributions
- Vocabulary and tools
- Grand strategy
- Basic notion: fit between external opportunities and internal capability
- Started to promote the relevance of strategies in organizations and strategy as a field of research
PLANNING SCHOOL: a definition of planning
Planning is a formalized procedure to produce articulated results by using an integrated system of decisions
- Measure, understand
3
, Comparing business strategy and military strategy
- Strategic planning started in the military
- Similarity
o Both business and military organization must adapt to change and constantly improve
- Difference
o Business strategy assumes competition
o Military strategy assumes conflict
Planning school: characteristics and premises
- Strategy is based on rational and systematic “science”
- Rules of thumb are replaced by insights into regularities
- Strategy forming is a conscious, formal and controlled process
- Strategy must be composed into discrete steps
- Strategy forming is supported by checklists and analytical techniques
- Rational and systematic approach = influence of Taylorism
- Organizations are like machines – “machine metaphor” (Taylorism)
- Organization have a clear-cut system of values, competencies and reward system
- These are stable and easy to recognize
- Responsibilities are split up
- Planning and implementation are two separate steps
- The environment of organizations is stable and predictable
Operational planning
- Links strategic goals to tactical goals and objectives.
- Describes:
o Milestones,
o Conditions for success
o Operational planning / phasing
- Links the strategic plan with the activities the organization will deliver and the resources required to deliver them.
- Operational plans establishes the activities and budgets for each part of the organization for the next 1 – 3 years.
Planning school: strategy as a formal process
Origins: Ansoff: Corporate Strategy Predict and prepare
Ansoff’s strategies for diversification
- Harvard Business Review article: 'Strategies for Diversification’
- Simplified competitive position of firms by defining two dimensions:
o the products - what it sold;
o the markets - to whom they are sold.
- Long-range planning necessary to drive managerial decision making when speed of change exceeds a firm's ability to
respond
4
