2.4 Rational versus emergent strategy and other models of strategy Flashcards
There are a number of widely accepted approaches to strategy. List these. (10 examples)
Complexity and chaos theory Institutional theory The ecological view The relationship between strategy and objectives Human behavior and strategic choice Incrementalism Competitive structures Co-operation and networks Game theories Innovation and knowledge-based theories
What is “complexity and chaos theory”?
The theory that organisational strategy is significantly affected by positive and negative feedback and unpredictable long term outcomes.
What is “institutional theory”?
The theory that organisations operate within an environment populated by a range of differing institutions and a complex web of institutional behavior.
What is the “ecological view”?
Organisations behave like ecosystems in that they adapt to the structures around them - they will either adapt to the surrounding structures or decline.
What is meant by the “relationship between strategy and objectives”?
It is not possible to separate strategy from its objectives - decisions determine strategy and not the other way around.
What is the link between human behavior and strategic choice?
When developing strategy, care must be taken to consider the potential responses of individuals and how these individuals work together.
What is meant by “incrementalism”?
Strategy makers are continually developing and challenging strategy rather than the a determined process from the outset.
What is meant by “competitive structures?
Competitors will have a distinct influence on the development of strategy.
How does RyanAir demonstrate competitive structure in its strategy?
RyanAir offers very cheap seats at the cost of services and facilities to compete with more luxurious airlines such as Emirates.
What is “cooperation theory”?
When developing strategy, organisations will recognise that there will be players with whom it is sensible to cooperate. This is often more efficient than trying to thwart the opposition.
Who developed the “3C’s theory? (Customers, Competitors, Corporation)
Ohmae (1982)
What is meant by “game theory”?
Game theory is the process of modeling the strategic interaction between two or more players in a situation containing set rules and outcomes.
What are the two sub-types of game theory?
1) Mathematical game theory - where there is a limited range of outcomes with set values
2) War gaming - where strategy changes in response to how competitors behave.
In “knowledge-based theory”, what is meant by “Tacit knowledge”?
What we know implicitly for which there is usually a combination of intangible and tangible evidence.
In “knowledge-based theory”, what is meant by “Explicit knowledge”?
That which we know formally where there is always tangible evidence.
