Strategic planning is a structured process aimed at producing a rational (or intended) strategy. What did Mintzberg summarise the basic premises of strategic planning as?
¥ Strategies result from a controlled, conscious process of formal planning, divided into distinct steps each supported by techniques
¥ Responsibility for the process rests with senior management and staff planners
¥ Strategies are made explicit so they can be implemented through detailed attention to objectives, budgets, programs and operating of various kinds
The rational approach to strategy development argues that strategy is intentionally developed as a result of rational analysis and formal planning processes. What 3 key elements are involved in rational strategy?
¥ Strategic Planning - structured system for strategic analysis, choice and implementation
¥ Strategic Leadership - the vision, values command and interpersonal influence by individual leaders and leadership teams in the organisation
¥ Strategy Imposition - the deliberate imposition of strategies on organisations by external stakeholders
What is rational planning constrained by?
¥ Lack of accurate information ¥ Lack of time ¥ The need to compromise ¥ Lack of problem-solving skills ¥ Uncertainty about the future
What is an emergent strategy?
It evolves as things become apparent. Here managers see their role as reacting to and countering competitive moves, adapting to the environment. Choices are made at lower levels in the business and those which are successful spread and develop further.
¥ Change comes through trial and error and learning from mistakes
¥ Strategies evolve through reactive solutions to emerging problems
¥ Organisations make decisions in a series of small incremental steps
What is logical incrementalism?
It is defined by Johnson, Scholes and Whittington as ‘the deliberate development of strategy by experimentation and learning from partial commitments rather than through global formulations of total strategies. Logical incrementalism acknowledges strategy making is influenced by a wide range of behavioural, social and political factors. It allows managers to be responsive to environmental change and rational in their decision making.
What is the distinction between realised and unrealised strategy? Why might unrealised strategy not be implemented?
Realised strategy is delivered whereas unrealised strategy isn’t. Unrealised strategy may not be implemented because:
¥ The underlying assumptions behind it may have been wrong
¥ It may have been resisted by key stakeholders to such an extent it was dropped
¥ External environmental changes may have made the plan unworkable or irrelevant
What is an ‘intended strategy’?
When strategy and development doesn’t go to plan, the organisation may formally issue an ‘intended strategy’ (as a result of deliberate planning processes) while in practice it is actually pursuing a completely different set of strategies. This means what the organisation delivers to its customers, employees and other stakeholders may be completely different from its public mission statement.
Why might the realised strategy diverge from the intended strategy?
¥ Senior management plans are not implemented in practice
¥ Realised strategy is partly the outcome of emergent or adaptive strategy processes
What are the implications for the strategists where intended strategies aren’t realised?
¥ Awareness - check what the gap is between intended strategy and realised
¥ Avoid over confidence - managers must avoid reliance on strategic planning systems
¥ Manage the process - emergent strategy processes need to be managed
¥ Monitor external change - and develop strategy to meet them.
What should strategists adopt in dynamic, turbulent markets?
¥ Agile structure, short reporting lines and quick decision making
¥ Encourage proactive environmental scanning, information collection and reporting
¥ Use logical incrementalism as strategy planning of choice
Strategic planning aims to achieve edge over competition, what do plans typically aim to achieve?
¥ Improving quality and/or price or products/services
¥ Launching new products
¥ Entering new market sectors
¥ Reducing operating costs to increase profit
What role does supply chain play in supporting corporate objectives?
¥ Raw material and component sourcing (central to cost and quality)
¥ Close supplier relationships (innovation)
¥ Global sourcing can lead to improved availability (and security) of lower cost goods
¥ Ethical sourcing can lead to reputation and brand enhancement
¥ Upstream supply chain management can reduce supply risk, improve costs and quality