STRATEGIC MANAGEMENT

MODELLING STRATEGY: THE

CONCEPT OF MINTZBERG

PRESENTED BY;

THUGURI MURIUKI

OCTOBER 2014

Introduction

Schools of thought

Conclusion

Recommendation

INTRODUCTION:

Strategy is a high level plan to achieve

one or more goals under conditions of

uncertainty.

It is a combination of competitive moves

and business approaches employed to

satisfy customers, compete successfully

and achieve organizational objectives.

Strategy doesn’t only have to position; it

also has to inspire.

IMPORTANCE OF STRATEGY:

Sets direction

Focuses effort and promotes coordination

Defines the organization

Provides consistency

‘‘strategies also have their drawbacks’’

SCHOOLS OF THOUGHT:

1. DESIGN SCHOOL

This approach regards strategy formation as

a rigorous and rational process of conception

to create the best fit by matching the internal

environment to the external environment.

The most appropriate tool for this analysis is

SWOT analysis where the internal strengths

and weaknesses are examined as well as

the external opportunities and threats.

‘‘look before you leap’’

2. PLANNING SCHOOL

It regards strategy formation as a formal

process in which a given set of steps are

taken from the analysis of the organizations

situation, exploration of various alternatives

to the execution of the strategy it can use to

achieve its objectives.

It involves using scenario analysis

techniques to evaluate strategic options so

as to enable effective decision making.

‘‘a stitch in time saves nine’’

3. POSITIONING SCHOOL

It regards strategy formation as an

analytical process that examines how an

organization can improve its competitive

edge within its industry.

Michael Porters generic strategies and

value chain model; BCG growth share

matrix and experience curve or the Game

theory can be used in this approach.

‘‘nothing but facts’’

4. ENTREPRENEURIAL SCHOOL

This approach regards strategy formation as a visionary process, especially by the organizations founder.

Entrepreneurs are actively searching for new opportunities to explore and they take dramatic leaps forward in the face of uncertainty, with growth as their main goal.

The limitation here is that there is no real understanding of how a vision is created and the organization may not be able to carry on the vision once the visionary leader is gone.

‘‘take us to your leader’’

5. COGNITIVE SCHOOL It regards strategy formation as a mental

process that analyses how people perceive things and how they process information.

It focuses on strategy formulation as an individual rather than a collective process, which makes it more difficult to understand and manage.

The limitation of this approach is that strategies emerge as concept maps or frames of reality which hinder the creativeness of the process.

‘‘i’ll see it when i believe it’’

6. LEARNING SCHOOL It regards strategy formation as an emergent

process where focus is placed on what works and what doesn’t and incorporates the lessons learnt over time into the overall plan of action i.e. trial and error.

It offers a solution to deal with the complexity and unpredictability of strategy formation through intuition, integration, interpretation, institutionalization and knowledge management.

The limitation of this school is that it lacks a sense of urgency and discipline, which could be costly to the organization in terms of the time it takes to learn.

‘‘if you don’t succeed, try and try again’’

7. POWER SCHOOL

It regards strategy formation as a process

of negotiation between shareholders and

the other stakeholders of an organization

because of their power struggles within

the organization.

It involves bargaining, conflict and conflict

resolution, stakeholder analysis, ploys

and counter-ploys to deal with the power

struggles.

‘‘look out for number one’’

8. CULTURAL SCHOOL It regards strategy formation as a

collective process that reflects the organizational culture within various groups and departments in a company i.e. a social interaction that takes place within the context of the beliefs and understandings shared by members of an organization.

It looks at values, beliefs, and corporate myths and recognizes them as important variables that can influence the corporate culture.

‘‘an apple doesn’t fall far from the tree’’

9. ENVIRONMENTAL SCHOOL

It regards strategy formation as a reactive

process to the challenges imposed by the

external environment.

This approach examines the stability,

complexity, market diversity, adaptability

of an organization and its industry as an

ecosystem.

‘‘it all depends’’

10. CONFIGURATION SCHOOL

It regards strategy formation as a process

of transformation from one type of

decision making structure to another.

It is appropriate in organizations where

the status quo approach will not suffice in

the future because of major changes in

the organization.

‘‘to everything, there is a season’’

CONCLUSION: There is a relationship between strategy formulation, strategy

implementation, and organizational performance.

Organizations begin strategy formulation by carefully specifying their vision, mission, goals, and objectives, and then engage in SWOT analysis to choose appropriate strategies.

In order to achieve its objectives, an organization must not only formulate but also implement its strategies effectively.

To implement the strategies formulated, an organization must determine how much it would have to change; analyze its formal and informal structures; analyze its culture; select an appropriate approach to implementing the strategy; implement the strategy and evaluate the results.

None of the ten approaches are complete by themselves, as each offers some useful concepts and some strong points to aid understanding. There is often a disconnect between an organizations realized strategy and the originally intended strategy. This is due to the execution process because different people interpret the organizations strategic direction differently.

GOOD

SUCCESS TROUBLE

POOR

ROULETTE FAILURE

GOOD POOR

STRATEGY IMPLEMENTATION

ST

RA

TE

GY

AP

PR

OP

RIA

TE

NE

SS

RECOMMENDATIONS: Strategic planning is not necessarily regarded as a

good thing in all cases; there are dangers that an overly rational or overly rigorous approach can pose.

While academics focus on these narrow perspectives, business managers are better served if they strive to look at the bigger picture.

The ‘learning school’ is most preferred because of the emphasis it places on an organization incorporating input from its environment, and adapting over time.

“Strategies are both plans for the future and Patterns from the past” - Henry Mintzberg, Crafting Strategy Harvard Business Review, July-August, 1987