THE ACADEMIC DEBATE ON STRATEGYMAKING

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STRATEGY DEFINED: AN OVERVIEW OF DIVERGENT VIEWS

In the sixth century BC, Sun-tzu (later translated as Sun Tzu) in his works on military art and science, defined strategy as a vehicle for planning when he stated that “Leaders plan in the beginning when they do things,” and “Leaders consider problems and prevent them” (Sun Tzu, 1988:17). And further (1988:42): Assessments are the first order of business in military operations. But General Cao Cao says that assessments should be made at headquarters – this is because it is imperative to first assess the wisdom of the leaders, the strength of the opponent, the lay of the land, and the number of troops; then when the two armies confront one another, the adaptations to be made are determined by the leadership in a manner consistent with these regulations. Discipline means that regulations are strict and clear. The Way means inducing people to have the same aim as the leadership, so they will share death and share life, without fear of danger. This means guiding them by instruction and direction. [Own italics]. Throughout early literature on strategy some salient thoughts expressed by these early works have been re-emphasised and established as theoretically true for strategy. The notion of planning and the importance of the CEO or leader typify the early beliefs about strategy. Many authors, such as Quinn (1980) and Cummings and Wilson (2003), have traced the military genesis of the term strategy from the Greeks and the Macedonians.

Science approach versus Art approach

Parnell and Lester (2003:292) argue that the art versus science debate is one of the most “fundamental issues in strategy formulation”. They are of the opinion that the art–science discussion is not merely an academic dispute, since the perception of the strategy phenomenon, and more specifically the formulation of strategy, is a key building block of strategy. Therefore they postulate that one’s view of how the strategy process should function is inseparable from one’s view of what the strategy should be (i.e. content). The difference between the art and science interpretations of strategy is therefore substantial. “According to the art perspective, the lack of environmental predictability and the fast pace of change suggest that the inherent value of strategic 38 planning is limited. Instead, strategists should incorporate substantial creativity and intuition in order to design a comprehensive strategy for the firm (Ford & Gioia, 2000).
In contrast, followers of the science perspective see the business environment as largely objective, analysable and predictable to a great extent. As such, strategic managers should follow a systematic process of environmental, competitive and internal analysis and build the organisation’s strategy on this foundation” (Parnell & Lester, 2003:292). Koch (2000:81) relates the idea of strategy that should be ‘crafted’ rather than ‘planned’ to the recognition of the difficulty of predicting the future and the importance of respecting market feedback rather than sticking to a plan above all else. As such, strategy should be a creative and intuitive interaction between a firm’s aspirations and results in the marketplace.

Mechanistic approach versus Organic approach

Farjoun (2002:561) categorises the development of strategy in two broad ‘progressions’. He is of the opinion that the categories arose in an attempt to answer questions such as: What is strategy? What is strategy related to, and how? How is strategy selected and managed? How should it be? Farjoun thus distinguishes two streams of research, namely the mechanistic and organic perspectives. He borrowed these terms from Burns and Stalker (1961, in Farjoun, 2002:562) who in turn “borrowed … terms to suggest that different contexts call for different clusters of conceptual, explanatory, prescriptive, and methodological models. We too view the terms as describing points on a continuum rather than a dichotomy of pure types. We find the term organic particularly suitable to our purposes since it combines notions of process, unity, and vitality”.

Deliberate versus emergent strategy approach

From the above debate on learning versus formalised planning and design flows the distinction between deliberate and emergent strategies. Mintzberg (1991:464) writes about the planning school: Certainly every particular story I have heard about the process …informs me that it often starts out as a rational, deliberate process, which almost inevitably fails, but when it does occasionally succeed, it ends up as an emergent one of painful learning. Just consider Michael Porter’s ‘facts’ on the incidence of failure and acquisition decisions. Maybe the rational models were too successful – in their incidence of adoption rather than the consequence of adoption. Andrews (Christensen, Andrews, Bower, Hamermesh & Porter, 1987:84), proponent of the design school, notes that there should be a balance between focus and flexibility, between a sense of direction and responsiveness to changing opportunities. Corporate strategy need not be a straitjacket. Room for variation, extension, and innovation must be provided. He is, however, careful to avoid association with what he calls ‘extreme incrementalism’, which he describes as “reactive improvisation, muddling through, or following one’s nose” (Christensen et al, 1987:83). Andrews holds the view that it is essential to plot a course into the future and stays committed to deliberateness.

Strategy as a plan versus strategy as a pattern

Mintzberg (1994a:23) uses for purposes of illustration the difference between the answer to the question: “What is strategy?” and the description of strategy application in an organisation. He points out that in answer to the question: “What is strategy?” one will almost certainly be told that strategy is a plan, or something equivalent. Then when the same people are asked to describe the strategy practices in their organisation, they will probably be happy to answer the question although their answer may contradict their own definition of the term. It turns out that strategy is one of those terms that we define in one way, yet apply/use in another. Mintzberg (1994a:23) distinguishes between two main definitions here, namely: 1. Strategy as a plan, and 2. Strategy as a pattern. This distinction between plan and pattern is depicted in figure 2.1 below. Strategy as a pattern refers to strategy being translated as consistency in behaviour over time. Organisations can therefore be seen to develop plans for the future and also evolve patterns out of their past. He consequently claims that the difference between the two main definitions is the difference between an intended strategy and on the other hand the realised strategy. This supports Peters’ (2003:24) notion of the impossibility of the five-week plan (let alone the five-year plan); “You’re lucky if you can write a five-week plan that makes any sense…after five weeks.”

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TABLE OF CONTENTS :

  • CHAPTER 1: INTRODUCTION AND RESEARCH DESIGN
    • 1.1 Introduction
    • 1.2 Background
      • 1.2.1 Strategymaking
      • 1.2.2 Strategy Research
      • 1.2.3 Defining the constructs
    • 1.3 Research problem
    • 1.4 Purpose of the study
    • 1.5 Research objectives
      • 1.5.1 Primary objectives
      • 1.5.2 Secondary objectives
    • 1.6 Hypotheses
    • 1.7 Research DESIGN for this study
    • Figure 1.1 Research Design
      • 1.7.1 Sample selection and size
      • 1.7.2 Importance and benefits of the study
    • 1.8 Chapter outline
    • 1.9 Abbreviations
    • 1.10 Referencing technique
  • CHAPTER 2: THE ACADEMIC DEBATE ON STRATEGYMAKING
    • 2.1 Introduction
    • 2.2 Strategy defined: an overview of divergent views
    • 2.3 Divergent approaches to strategymaking on a continuum
      • 2.3.1 Science approach versus Art approach
      • 2.3.2 Mechanistic approach versus Organic approach
      • 2.3.3. Planning and Design approach versus Learning approach
      • 2.3.4 Deliberate versus emergent strategy approach
        • 2.3.4.1. Strategic planning versus strategic thinking
        • 2.3.4.2 Strategy as a plan versus strategy as a pattern
  • Figure 2.1: A difference between strategy as plan versus strategy as pattern
  • 2.4 Conclusion: Crystallising a continuum
  • 2.5 Chapter summary
  • CHAPTER 3: EXPLAINING TWO DIVERGENT APPROACHES TO STRATEGYMAKING
    • 3.1 Introduction
    • Figure 3.1: The structure of research in the strategic management field
    • 3.2 Synthesis of strategymaking approaches
    • 3.3 Categorizing approaches to strategymaking
    • 3.3.1 Mintzberg’s “Schools of strategy formation”
    • Table 3.1: Mintzberg’s schools of thought on strategy formation
    • 3.3.2 Process versus goal orientation
    • Figure 3.2: Four views on the process of strategy development
    • 3.3.3 The role of prediction in categorising
    • Figure 3.3: Framework for prediction and control
    • 3.3.3.1 Ends and means
    • Figure 3.4: Strategy and tactics: bridging the gap between means and ends
    • 3.4 Focusing on the rational planning end of the continuum
      • 3.4.1 Planning and designing a strategy
      • 3.4.2 Rational planning explained
      • 3.4.2.1 The process model of rational planning
      • Figure 3.4: The Ansoff model of strategic planning
      • Figure 3.5: The Steiner model of strategic planning (Steiner 1979:33)
      • Figure 3.6: The StrategyMaking, Strategyexecuting process
      • 3.4.3 Strategy process and positioning
      • Figure 3.9: Porter’s determinants of success in distinct business (crosssectional/longitudinal problems)
      • 3.5 Focussing on the emergent strategy end of the continuum
      • 3.5.1 Logical incrementalism
      • 3.5.2 Emergent strategies
    • Figure 3.9: Strategies deliberate and emergent as ends of a continuum/process
    • Figure 3.10: Organisational requirements for crafting emergent strategies (Source: Crossan 1997:39)
    • 3.5.2.1 Actionresponse cycles
    • Figure 3.11 Strategy results as actionresponse realised strategies
    • 3.5.2.2 First and second level strategies
    • 3.5.3 The absence of strategy
    • 3.5.4 Strategic thinking
    • Figure 3.12 Model of generative strategic planning
    • 3.6. Chapter summary
  • CHAPTER 4: FACTORS MODERATING THE CHOICE OF STRATEGYMAKING
    • APPROACH
    • 4.1 Introduction
    • 4.2 Debating the advantages and disadvantages of two opposing strategymaking approaches
    • 4.2.1 Strategymaking mode and performance
    • 4.2.2 Other advantages or disadvantages associated with strategymaking modes
    • 4.2.3 The demand for deliberate or emergent strategy
    • 4.3 Moderating factors
    • Table 4.1 ‘Critical dilemmas’ in strategymaking informing type of approach selected
    • 4.3.1 Environment as a moderating factor
      • 4.3.1.1 Defining environment as moderating factor
      • 4.3.1.2 Measuring the specific influence of environment on strategy
      • 4.3.1.3 Conclusion
    • 4.3.2 Organisational size as moderating factor
      • 4.3.2.1 Measuring the specific influence of organisational size on strategy
      • 4.3.2.2 The role of complexity
      • 4.3.2.3 Conclusion
    • 4.3.3 The CEO as moderating factor
      • 4.3.3.1 Measuring the specific influence of the CEO on strategy
      • 4.3.3.2 The role of other managers in the strategymaking
      • 4.3.3.3 The specific role of middle management in strategymaking
      • 4.3.3.4 Decision consistency and performance consensus
      • 4.3.3.5 Conclusion
    • 4.4 Chapter summary
  • CHAPTER 5: RESEARCH DESIGN AND METHODOLOGY
    • 5.1 Introduction
    • Figure 5.1 Research Design
    • 5.2 Problem Statement
    • 5.3 Research Objectives
    • 5.3.1 Primary objectives
    • 5.3.2 Secondary objectives
    • 5.4 Hypotheses
    • Table 5.2 Research organisation (Research Objectives, Hypotheses and measurement questions)
    • 5.5 Research Methodology
    • 5.5.1 Data required
      • 5.5.1.1 Unit of analysis
      • 5.5.1.2 Sample frame
      • 5.5.1.3 Sample selection and sample size
    • 5.5.2 Method of data collection
    • 5.5.2.1 Questionnaires/Surveys
    • Figure 5.2 Sample semantic differential scale
    • 5.5.2.2 Semistructured interviews
    • 5.6 Analysis
    • 5.6.1 Factor analysis
    • 5.6.2 Descriptive statistics
    • 5.6.3 Inferential statistics
    • 5.6.3.1 MannWhitney test
    • 5.6.3.2 Multivariate techniques for the analysis of dependence
    • 5.7 Chapter Summary
  • CHAPTER 6: RESEARCH FINDINGS
    • 6.1 Introduction
    • 6.2 Empirical findings: descriptive statistics
    • 6.2.1 Sample and response rate
    • 6.2.2 Demographics

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STRATEGYMAKING APPROACHES FOLLOWED IN SOUTH AFRICAN ORGANISATIONS

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