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A TCI Book Review

Strategy Safari A Guided Tour Through the Wilds of Strategic Management

Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel
The Free Press, New York, 1998, ISBN 0-684-84743-4


Using the analogy of the blind men trying to describe an elephant (remember the story where the one feeling its tail thought it was like a rope, the one feeling its leg thought it was like a tree, the one feeling its tusk thought it was like a spear, etc.) Mintzberg, Ahlstrand and Lampel discuss various approaches to strategic planning. They identify 10 different schools of thought, and describe in chapters devoted to each, its history and origins, basic concepts, applications, advantages and disadvantages, and situations in which that approach to strategic planning may be appropriate.

At the outset of the book, in attempting to define this amorphous beast, they outline what they call 'the 5 P's of strategy', which are really five different ways of thinking about the essential characteristics of strategic planning. These are:

  1. strategy as a plan a guide for a course of action, a path from a current state to a desired future end state
  2. strategy as a pattern "...that is, a consistency of behavior over time. A company that perpetually markets the most expensive products in its industry pursues what is commonly known as a high-end strategy, just as a person who always accepts the most challenging of jobs may be described as pursuing a high-risk strategy." (p.9)
  3. strategy as position the location of particular products in particular markets.
  4. strategy as perspective "in Peter Drucker's memorable phrase, this is the "theory of the business" (p.13) it represents strategy as a particular philosophy of the business in terms of interacting with the customer, or the way(s) in which goods or services are supplied.
  5. strategy as a ploy under this definition, strategy is a means of gaining market share through a specific maneuver, designed to outwit a competitor or opponent.
The authors also discuss at the outset of the book the pros and cons of the various reasons why strategic planning has been thought to be beneficial in an organization. These are:
  • strategy sets direction while this is clearly beneficial, the danger is that the blinders that a strategic plan can impose upon an organization can make it difficult to appreciate new opportunities and possibilities as they arise
  • strategy focuses effort true, but the downside risk is that managers within an organization can get locked into a particular form of "groupthink", again missing out on potential new opportunities
  • strategy defines the organization again true to some extent, but the danger here is that the rich diversity inherent within the organization can get overlooked or lost by an overly simplistic stereotype of "what the organization is all about"
  • strategy provides consistency assuredly important, but consistency for consistency's sake, without having a clear market-oriented reason for this, is the obvious danger here
So it is apparent that the authors do not necessarily regard strategic planning as a good thing in all cases; they clearly indicate that there are dangers that an overly rational or overly rigorous approach can pose.

The core of the book is a detailed description of each of the 10 schools. They differentiate between two categories in this regard: the prescriptive schools, which attempt to identify directions for action on the part of the company based on an assessment of its current situation and that of the environment within which it operates, and the descriptive schools, which simply attempt to understand the historical reasons why a given company is where it is at a particular point in time.

The 10 schools are listed below:

Prescriptive Approaches

  1. Design School: This approach regards strategy formation as a process of conception, matching the internal situation of the organization to the external situation of the environment. Thus the strategy of the organization is designed to represent the best possible fit.
  2. Planning School: Here strategy formation is seen as a formal process, which follows a rigorous set of steps from analysis of the situation to the development and exploration of various alternative scenarios.
  3. Positioning School: Under this approach, which is very heavily influenced by the works of Michael Porter, strategy formation as an analytical process placing the business within the context of the industry that it is in, and looking at how the organization can improve its competitive positioning within that industry.

School of Thought

Philosophy

Tools / Methods / Concepts

Advantages

Disadvantages

1. Design School: strategy formation as a process of conception ● seeks to establish a fit between internal capabilities and external possibilities
● strategy development is a rigorous and rational process
● strategy precedes structure in the organization
● strengths, weaknesses, opportunities, threats (SWOT) analysis ● forces consideration of external factors
● process probably most appropriate in organizations that need a major re-orientation (re-conception)
● places great emphasis upon ability to forecast the future (for, if the strategic planner cannot predict the future external environment, what hope does the strategy have?)
2. Planning School: strategy formation as a formal process ● strategy can be developed by specialists in the science of developing strategy
● should be a formal strategic planning department in the organization (reporting to the CEO)
● synthesis can follow from analysis
● rigorous strategic planning methodologies
● scenario analysis
● planners can evaluate true strategic options, if these are somehow created in the process ● the process may become more important than the product
● process has no place for creative thought
3. Positioning School: strategy formation as an analytical process ● originated in military planning (e.g. Sun Tzu, The Art of War)
● strategy is a combination of defensive and offensive moves
● premise is that industry structure drives strategic position which drives organization structure
● Boston Consulting Group (BCG) Growth Share matrix
● BCG Experience Curve
● Profit Impact of Market Strategies (PIMS)
● Michael Porter's Generic Strategies
● Michael Porter's Value Chain
● game theory
● emphasis on analysis and calculation can be a very strong support to the strategy development process... ...but it should not be allowed to become the process: "Strategy-making, as we continue to describe it in this book, is a far richer as well as messier and more dynamic process than the rather orderly and static one depicted in this school." (p.121)

Descriptive Approach

  1. Entrepreneurial School: This approach regards strategy formation as a visionary process, taking place within the mind of the charismatic founder or leader of an organization.
  2. Cognitive School: This approach, based upon the science of brain functioning, regards strategy formation as a mental process, and analyzes how people perceive patterns and process information.
  3. Learning School: This school of thought regards strategy formation as an emergent process, where the management of an organization pays close attention to what works and doesn't work over time, and incorporates these 'lessons learned' into their overall plan of action.
  4. Power School: Here strategy development is seen to be a process of negotiation between power holders within the company, and/or between the company and external stakeholders.
  5. Cultural School: This approach views strategy formation as a collective process involving various groups and departments within the company; the strategy developed is thus a reflection of the corporate culture of the organization.
  6. Environmental School: Here strategy formation is seen to be a reactive process: a response to the challenges imposed by the external environment.
  7. Configuration School: In this final approach, the purpose of strategy formation is seen as a process of transforming the organization from one type of decision-making structure into another.
School of Thought Philosophy Tools / Methods / Concepts Advantages Disadvantages
4.  Entrepreneurial School: strategy formation as a visionary process ● the strategy of an organization is dependent upon the vision and drive of one entrepreneurial individual ● none, really: the process of strategy development is a 'black box' in the mind of the visionary ● does recognize the tremendous contribution that a visionary genius can make to an organization ● no real understanding of how the vision is created in the mind of the leader
● no real ability for the organization to carry on after the visionary is gone
5. Cognitive School: strategy formation as a mental process ● strategy development is an act of cognition; understanding how the mind works and processes information is key to understanding strategy development ● cognition maps
● frames
● shemata
● concepts
● this school shows great promise, but as yet is relatively undeveloped ● focus to date has been upon strategy formulation as an individual rather than a collective process (which is much more difficult to understand and manage)
6. Learning School: strategy formation as an emergent process ● strategy in an organization emerges as a result of trial and error learning within an organization ● intuiting
● interpreting
● integrating
● institutionalizing
● incrementality
● the learning organization
● the knowledge spiral
● chaos theory
● recognition that strategy must be consonant with the patterns of behavior and response that are inherent within an organization
● recognition that strategy changes and evolves over time; a counterbalancing force to the over-emphasis on 'rationality' that has dominated strategic planning for so long
● taken to the extreme, under this school, "anything goes": no strategy, or the wrong strategy, become equally valid
● danger that lack of urgency, or lack of discipline, may predominate and nothing significant changes
7. Power School: strategy formation as a process of negotiation ● strategy is a result of power struggles in the marketplace, and within the corporation ● bargaining
● conflict, and conflict resolution
● stakeholder analysis
● political analysis
● ploys and counterploys
● clearly, power is an element in strategy development
● most appropriate in situations involving complex, highly decentralized organizations of experts, where many actors have the power and inclination to further their own interests (e.g. universities)
● also may be appropriate for large and mature organizations, where power structures are well established
● this school tends to the rather narrow view that all strategy can be viewed as a power struggle or a power exchange
8. Cultural School: strategy formation as a collective process ● strategy development is a process of social interaction, that takes place within the context of the beliefs and understandings shared by members of an organization ● values
● beliefs
● corporate myths
● corporate culture
● recognizes that the corporate culture, however intangible and ill-defined, is an important variable that will influence the culture of an organization ● concepts are vague and lack precision
● tends to favor the status quo (consistency and continuation of the existing culture), and thus discourage necessary change
9. Environmental School: strategy formation as a reactive process ● the organization must respond to forces in the environment within which it operates, or else it will be 'selected against' (and ultimately will become extinct) ● stability
● complexity
● market diversity and niche
● adaptation
● contingency theory
● organization and industry as ecosystem
● recognizes the importance of environment as context (like the positioning school)
● allows for recognition that the death of business entities and indeed entire industries, is a natural and perhaps inevitable phenomenon
● definition of the environment is often so complex that no useful analysis can be done
● accords too much control to the environment: two different firms in exactly the same industry facing exactly the same environment, can have vastly different strategies
10. Configuration School: strategy formation as a process of transformation ● strategy is a conscious act of transforming an organization from one state into another ● alternative configurations:
  • entrepreneurial organization
  • machine organization
  • professional
  • diversified
  • adhocracy
  • missionary
  • political
  • ● revitalization is a process of moving from one configuration to another (i.e. transformation)

    ● appropriate in some organizations where the status quo approach will not suffice in future ● may force major change in an organization where this is not warranted

    In each of these schools, the process of strategy formulation itself is regarded as something of a "black box" none of them are able to clearly describe how an individual or group is able to leap from the collection and analysis of information, to the conceptualization of alternative courses of action (although they do concede that the cognitive school comes closest). Overall, the authors appear to prefer the 'learning school' (they are teachers, after all), because of the emphasis that it places on an organization incorporating input from its environment, and adapting over time.

    In the final analysis, just as none of the blind men's descriptions of the elephant was completely adequate, yet each contained elements of truth, none of these 10 approaches is complete in and of itself, either. Each offers some useful concepts, and some strong points to aid understanding, but has its disadvantages as well (again, see the chart).

    As well as providing a useful illumination of the origins and characteristics of the different schools of thought, Strategy Safari also makes for a very enjoyable and entertaining read. Mintzberg et.al. have done an excellent good job of taking a difficult and potentially deadly boring subject and rendering it interesting. The book is highly recommended for anyone embarking upon, or engaging in, a strategic planning process.


    THE TCI MANAGEMENT CONSULTANTS RATING:


    IF YOU HAVE ANY COMMENTS ON THIS REVIEW (I.E. DISAGREEMENTS, ADDITIONAL PERSPECTIVES, ETC.) OR SUGGESTIONS FOR FUTURE BUSINESS BOOK REVIEWS, WE'D LIKE TO HEAR FROM YOU! CONTACT US AT jlinton@consulttci.com
     


     

     

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