Introduction to the analysis of strategy according to Mintzberg’s ten schools of thought and Johnson, Scholes and Whittington’s strategy lenses
Introduction to the analysis of strategy according to Mintzberg’s ten schools of thought and Johnson, Scholes and Whittington’s strategy lenses.
This paper aims to analyze the strategy concepts and ideas of Mintzberg’s ten schools of thought and Johnson, Scholes and Whittington’s assessment of strategy using a number of lenses. This analysis will guide the essay in drawing out the comparisons and differences between the two in terms of appreciating the complexity of developing and implementing strategy by using relevant business examples. As a summary, the discussion will end with an examination of whether the lenses are more useful than the 10 schools in the 21st century.
Mintzberg defines strategy as an intervening power between an organization and its surroundings which centers on results that come as expected. Together with Ackof, they agree that the chances for success of a strategy increases when all members of a company fully participate (Ackoff, 1974). It was only in the 1980s, according to Mintzberg, that strategies developed greatly within the corporate world and to this day thinking strategically is vital in leading and managing companies in terms of returns or otherwise as it links the inner business world and its environs (Mintzberg, 1998).
Johnson, Scholes and Whittington explain strategy as the continuing path of a company that enable it to achieve positive results through its pattern of capabilities and assets in a changing atmosphere allowing it to fulfill investor’s expectations. This involves various characteristics of strategic decisions which include, long term direction, activities, advantages over the competition, corporate environment, standards and expectations. They share that strategies exists at the corporate level, business level and at the operating end of an organization and that all organizations use strategy to define their mission, vision and goals.
Mintzberg categorizes the field of strategic management through ten schools of thought. The concept of the schools shares that the resulting strategy depends on the tools and models used and also the character of the strategist. The ten schools of thought include those dealing with the design, planning, positioning, entrepreneurial, cognitive, learning, power, configuration, cultural and the environmental. Johnson, Scholes and Whittington share that strategy in organizations can be examined via four strategy-related lenses: as design, as experience, as ideas and as discourse.
Mintzberg (1998) shares that strategy is both realized and unrealized. It is realized when it has been delivered and unrealized when the purpose has not come to pass. Johnson and Scholes (1993) view strategy as a pattern of behavior resulting from the organizational culture and that organizational strategy require deliberate planning systems to be put into place. The degree of convention towards the formulation, design and development of organization’s strategies vary from one organization to another. These may range from numerous stages to minimal ones taking into consideration the environment of the organization (Paun and Nedelea, 2009).
Critical analysis of how the various perspectives of social science inform strategic management.
The discipline of Social science primarily deals with the entire society and how individuals interact with each other. It covers a huge range of disciplines such as; sociology, history, economics, psychology, gender, linguistics and social history. Strategic management is informed by the social sciences mainly under a three part strategy model which include the strategic position, strategic choices and strategic actions of a company. This however can only be achieved depending on the culture and skills of the organization.
Critical analysis of how the various perspectives of social science inform strategic management
This strategy model guides an organization into achieving results as it is vital for a company to first understand its competitive position, make tactical choices and finally turn them into action. Henry Mintzberg clarifies though that this order may not always be followed as choices may have to be made before the position is fully understood. “Strategic position is concerned with the impact on strategy to the external environment, internal assets and capabilities” (Johnson and Scholes, 2005). Strategic position may amount to nothing if the organization is not able to use their knowledge effectively to develop and implement a successful strategy because the organization is able to exploit its resources and skills to gain advantage over its competitors.
For an effective strategy formulation according to Grant, it is important for organizations to identify its key resources and capabilities, appraise them against vitality and strength and finally formulate strategy implications by harnessing key strengths, managing weaknesses and developing a response (Grant, R. M. (2004).
Strategic choices which are effective position organizations to be able to make workable strategic decisions. While planning, the choices that come up need to be really important strategic issues, once ambiguity sets in the need to explore the nature of the issues, their relationships sets in to enable the planning team to pick out the right choices. To guide an organization in choosing strategically, four attributes need to be adhered to; Communicability, authenticity, believability and deliverability. It is vital for choices to be stated clearly which enables employees to understand what the company does. For a choice to be believable it requires its basis to be evident, trustworthy and relevant. Communicability requires effective and efficient communication of choices and deliverability requires all choices to meet the three attributes and be able to be executed in terms of projects, budgets and action plans.
Strategic actions are in line with the process of putting into practice chosen strategies. For a company to achieve successful performance it requires a structure to be put in place as it defines the roles and responsibilities of departmental members and the entire organization. A functional structure groups individuals who do similar tasks or jobs, a divisional structure create work teams as per customer needs, a matrix structure gives team members more autonomy and grant them decision making power while a project organization structure puts together teams based on numbers required to complete a project. Putting a strategy into action requires systems to control the implementation process of a strategy and it is also vital for strategic change to be managed which leads the change process required.
Comparisons and contrasts of the strategy and lenses schools in regard to anunderstanding the complexity of strategy development and implementation by using relevant business examples.
According to Mintzberg, Lampel and Ahlstrand (1998), the authors of design school, tools like Ashridge Mission model and SWOT analysis are vital in the formation of strategy. The design school is a process of origin that formulates unique and clear strategies and takes into consideration the internal and external environment of the company. It is keen on an organization’s strengths, weaknesses, opportunities and threats (Kahveci and Meads 2008) and a framework of vital mission statement dimensions. The design school is similar to strategy as design in terms of they both evaluate the company and its internal and external environment as a way of determining strategy. According to White, strategy as design aims to pick the best organizational design after fitting organizational capability with environment opportunity. (White, 2004). In contrast, according to Johnson, Scholes and Whittington, strategy as design offers leadership roles to the top managers while supporting roles go to middle and lower management. Design school on the other hand focuses more on the company and not its employees hence avoiding room for innovation and in turn strains implementation process. At British Airways, staff attribute the efforts in the 1980s of building a service culture to the pride and professionalism among employees. One employee said he feels proud to work for BA because outsiders recognize their achievements when they travel with them. This shows impact of progress from the environment.
Comparisons and contrasts of the strategy and lenses schools in regard to an understanding the complexity of strategy development and implementation by using relevant business examples
The planning school focuses more on the implementation of the strategy as it relies on an analysis to be carried out on the current business situation. The school encourages the shaping of a strategy from the analysis of external factors, business position and current issues through innovations, having goals and objectives Mintzberg, Lampel and Ahlstrand (1998). This is similar to strategy as ideas as this lens highly encourages the use of ideas and innovation in a company and relies on diversity and variety. Both schools recognize that current business situation mainly technology requires constant analysis. In contrast under strategy as ideas, strategy gives room to employees to share new ideas regarding the changing environment while under the planning school, ideas come from top management who keep monitoring every step of implementation and may create disagreements. According to Mark Weedon of Egon Zehnder search firm, the company shys away from measuring productivity as they value client’s interest, teamwork and the “one firm” concept. They depend on each other and work as a team, this clearly portrays the lens strategy as ideas and gaps the planning school from long term productivity.
The positioning school recommends on focusing on the organization industrial position and the process of developing strategies capable of changing the organization’s position. The school empowers companies to come up with their own strategies that would change their position and aid them to achieve their vision from the analysis stage to execution Mintzberg (1998). This school is similar to that of strategy as design since the lens perceives strategy development as consistent whereby forces and constraints are analyzed and evaluated to establish a clear strategy. In contrast, strategy analysis under the positioning school is only useful for large firms and not small ones because of capital while under strategy as design can be used in any firm because strategy development process if top management driven. Toyota motors for example are the leaders in the auto industry and to stay ahead of its competition, it offers incentives to its customers which shows a lifetime if customer values and commitment. Its luxury brand known as the Lexus though successful has been lagging behind. Its strategy of producing cheaper entry vehicles to gain sales from customers has enabled them to grow their sales effortlessly.
The entrepreneurial school is visionary led whereby it consists of a founder or a leader who formulates a strategy which is followed throughout the existence of the organization. This process relies solely on a founder and the ultimate goal is the growth of his or her work which relies on profit and income. The strategies therefore tend to lean towards profit maximization. This is similar to strategy as discourse in that this lens views strategy as a communication tool whereby the command of strategy language is what enables managers to shape their objective, personal views, gain influence and power. The language of the strategy hence becomes very vital. In contrast according to Mintzberg, the process of the school is deliberate in accordance with the founder but very evolving in how it unfolds while the lens process is all about the managers and their say on how the strategy will be followed to enable them gain influence and power Mintzberg (1998). According to the entrepreneur, Bill gates, co-founder of Microsoft Corp has in 25 years, built a multi-billion dollar business with guided strategic thinking as well as making decisions of values and priorities which have become elevated into the company’s routines and skills that remain in place even today at Microsoft, Intel, and also Apple.
The cognitive school is driven by the psychological needs of the customers by taking into account people’s perceptions on patterns and the way they process information. It is also a theoretical approach of conveying cognitive psychology into strategy development (March & Simon, 1958). Learning changes people’s perceptions which in turn enables strategy formulation. This school is similar to strategy as experience in terms of organizational learning influenced by the experience of managers and employees based on research which is embedded in the organizational culture. Both the school and the strategy contrasts in terms of the cognitive school solely focuses on their customer’s views and reactions which may not be very practical beyond the conceptual stage while the strategy of experience as much as research has involved the public, the organization’s future is based on manager’s and employee past experience (Johnson and Scholes, 2005). According to studies, emotional and psychological appeals more to consumers and marketers tap into this. In the 18th century in an auction on the contents of the Anchor brewery, an auctioneer said that their presence was not to trade vats and boilers, rather they aimed at growing rich. This strives to shift the thoughts of customers and provide room for innovation and development.
The learning school is driven by education and it sees the environment as inclusive and complex (Lindblom, 1959). This shows the school solely relies on learning processes as a way of improving hence make small steps and learn gradually. Management tends to pay close attention to what is working and what is not working and their results get incorporated in their overall plan of action or strategy. This school is similar to strategy as experience, as managers and employees also develop and take into consideration cultures that have been taken for granted and provides room for negotiation. This contrasts with the school in that the top executives are too distant to the daily developments of the company and they are in charge of the overall plan of action while the school does not require one leaders and gives room for more people to learn. Xerox in nineteen eighty-three, senior managers propelled leadership via quality initiative. Since then all employees are equipped with techniques of solving problems. A six step process is today used for all decisions.
The power school is determined by companies being able to formulate strategies based on their power which may be inform of huge amounts of capital or brand image. This is characterized by the existence of visionary leaders with the vision of exerting power Mintzberg (1998). The school serves as a vessel of negotiation, persuasion, bargaining and even confrontations between power holders in the company and their external partners in form of political games. Strategies tend to result from a developing process and takes up positions. This school is similar to strategy as design in that they are both top management driven and they choose the business strategy. The lens and the school contrast in that as much as they both rely on top management to come up with the strategy, the power school relies on status, capital and authority to maintain its strategy while the lens gives supporting roles to the middle and lower staff lacking control or domination. In 1967, directors of Interpublic Group advocated for the resignation of their CEO due to financial problems. This shows control and dominance.
Strategy formation process transforms a company from one kind of decision making structure to another under the configuration school. A company may be described according to some of its characteristics, in time it may adopt these characteristics which may give rise to a set of strategies Mintzberg (1998). These periods of steadiness may be occasionally interrupted by some transformational process. This school focuses on organizational stages as time is required for adaptation and these stages aid in managing any disruptive process without destroying the company. It is similar to strategy as ideas in that, this lens relies on new ideas which may originate diversity. Employees tend to a changing environment with a variety of initiatives. The schools itself relies on decisions and a changing environment to derive new strategies. In contrast the school relies on constant new decisions which is a key to strategic management while the lens, new ideas need to battle other ideas to be picked and against conformity on past strategies. Israel Drori, a Management Scholar observed the collapse of an internet startup seven years after its inception. The company depended too much on the founder and weren’t keen on organizational creativity. This proves importance of formulating new ideas in a changing environment.
The cultural school according to Mintzberg, encourages involvement of the employees and their cooperation guides the strategy formulation. The school is driven by the involvement of various groups and divisions in the company and the strategy formation is regarded as a communal and supportive process and is a reflection of the corporate culture. Culture in such organizations is acquired through socialization and may be reinforced by formal coaching Mintzberg (1998). It is similar to strategy as discourse in that under this lens, managers are keen on communicating which brings forth a command of strategy language that frames the policy and shapes the agenda. The school shares that strategy is deliberate and deeply rooted, and therefore, encourages and discourage consistency in organization’s behavior and changes in strategy respectively. On the other hand they contrast in that the school values the benefits of culture for their company while the lens only caters to the top management views. At Egon Zehnder, the firm aims to be the most professional, biggest and international executive search firm. Its strategy backs their vision because it believes its one firm cooperative culture is advantageous. Employees share that the company has a lot of strong hype and ethics which enable them to have quality and be efficient. This culture guides the formulation of an effective strategy.
The environmental school emphasizes on the importance of environmental factors such as political, social, economic and technological factors in strategy formation. The strategy is a feedback to external environmental challenges. The organization is required to respond to these external factors or be selected out Mintzberg (1998). This makes leadership an inert factor in being keen to the environment and ensuring proper adaptation by the company. It is similar to the lens strategy as design in that they both view strategic development as a process requiring careful evaluation of the environment impacting the company to enable a clear direction of strategy to be determined. The school and the lens contrast in terms of decision making, the school’s way of doing things is a reaction to the environmental forces while for the lens decisions are made by top management only. According to Forbes, Randy LaValley, CEO of LaValley trucking felt the 2008 recession which caused trucking firms to shut down. The recession taught them how to be lean, change strategy and seek opportunities. Following these changes, their 2010 revenues exceeded those of the previous year, while the 5% headache margin improved to a healthier 20%. This brought forth a new strategy.
In conclusion, Strategy is vital in the success and failure of an organization and the lenses and schools are vital to organizations as they guide them to attain the perfect strategy and strategic management. Therefore, I find neither the lenses nor the 10 schools of thought being superior to each other in the 21st century. Mintzberg’s characterization of strategy enables us to understand the behavior of various organizations and makes it easier for managers and employees to conduct an internal and external analysis which guides the direction of the company for years to come. The lenses on the other hand are the angles from which strategies get viewed and implemented from at the corporate level. The lenses and the schools hence complement each other.
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