Parallel Perspectives

Today I have been...

Reading more about the development of strategic management thought

Why?

Required reading! P5 Reader

So What?

In 2001, Whittington split strategic management into

1. Classical
2. Evolutionary
3. Processual (is that a word?!)
4. Systemic

 I've already blogged about 1.

Evolutionary (Nelson & Winter, 1982, Henderson 1989) states that the external environment is permanently a difficult place to be, meaning rational planning cannot be used. In a dynamic market, businesses must evolve or die, so managers are tasked with fitting their strategies to the turbulent environment.

Population Ecology suggests that structure, character and resource endowment of an organisation are fixed shortly after birth, and survival of the fittest means that it must ensure it acquires an adequate amount of resources to survive - kind of like how the different sides battle for mine resources in the Command & Conquer, Warcraft, Starcraft style games!

The Red Queen in Alice through the looking glass pointed out to Alice that in a fast world she has to run just to stand still. Barnett and Hansen in 1996 extended this idea to orgs.

 Over time, orgs learn from competitive experience, helping to create stronger competitors. They are less likely to fail if they have recent competitive experience!

Henry Mintzberg's view of strategy is Processual. Processual = emergent, that is, strategy is a process that emerges from a combination of influences and interests within the organisation in addition to top management. An amalgamation, perhaps. This way it not only reflects managerial objectives but also the practical pragmatism needed to satisfice the various internal stakeholders.

In other words, strategy that is attempted to be imposed, top-down, is not likely to be effective without factoring in relevant internal stakeholders. In this context strategy development cannot be a step-by-step series of analysis, evaluation and implementation as it is a continuous and iterative process.

Systemic strategy is a recognition of the work of systems thinkers such as Granovetter and Shrivastava. They see strategy as being moulded by context.

• Social Context,
• Geographic,
• Political,
• Cultural
• etc

For example, profit maximisation may drive strategic objectives in our systems (anglo saxon), where family, social or national welfare may be bigger drivers elsewhere.

Another example of systemic strategy is shown in the influence of social and peer networks. For example overlapping organisational membership, friends, family, professional networks etc lead to more shared information and knowledge. This increases the complexity of managing alliances.

Chandler looked initially at the link between organisational structure and strategy, and Bartlett and Ghoshal and Headlund have built on this work. The traditional M-Form org was considered to seek efficiency. Hedlund suggests N-Form organisations are "network" and virtual organisations which are becoming more prevalent as partnerships and outsourcing increase. Examples of co-operative strategies include things such as airline alliances and code sharing. Mintzberg's view is that structure is dependent on the strategic needs and purpose (back to Pyramid of Purpose again).


How will I use it?

More relevant background information, again it is interesting to see the links between this and some of the b713 material.