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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Chapter 6

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Approaches to strategyManagerial choice and constraints

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

The master strategist: Michael Porter

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Strategy

Strategy is concerned with decision-making.

Strategy is concerned with coping with change:

• Sit back• React• Anticipate.

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Definitions of strategy1960s

• Ansoff– Focus on the external environment– Product-market mix.

• Chandler– Determination of long-range business goals

– The courses of action necessary to achieve these.

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Figure 6.1 Product–market mix

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Figure 6.2 SWOT analysis

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Johnson and Scholes (1993)

Strategy:• Concerns the full scope of the organisation’s activities.

• Is the process of matching the organisation’s activities to its environment.

• Is the process of matching its activities to its resource capability.

• Has major resource implications.• Affects operational decisions.• Is affected by the values and beliefs of those who have power in the organisation.

• Affects the long-term direction of the organisation.

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Mintzberg on strategy

Five definitions:• Plan – Intended actions• Ploy – Manoeuvre• Pattern – Consistent trend of behaviour

• Position – Avoiding competition

• Perspective – Common view.

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

1. The rationalistic view – which sees strategy as the outcome of a series of preplanned actions designed to achieve the stated goals of an organisation in an optimal fashion.

2. The adaptive or incremental view – which sees strategy evolving through an accumulation of relatively small changes over time.

3. The interpretative view – which sees strategy as the product of individual and collective attempts to make sense of, i.e. interpret, past events.

Johnson (1987)

Johnson’s three basicviews of strategy

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Morgan’s organisational metaphors

• Organisations as machines• Organisations as organisms• Organisations as brains• Organisations as cultures• Organisations as political systems• Organisations as psychic prisons• Organisations as flux and transformations• Organisations as instruments of domination

Morgan (1986)

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Planned and Emergent strategies

Deliberate strategy focuses on control – making sure that managerial intentions are realized in action – while emergent strategy emphasizes learning – coming to understand through the taking of actions what those

intentions should be in the first place. ... The concept of emergent strategy ... opens the door to strategic

learning, because it acknowledges the organization’s capacity to experiment. A single action can be taken,

feedback can be received, and the process can continue until the organization converges on the pattern that

becomes its strategy.(Mintzberg et al, 1998a: 189–190)

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Figure 6.3 Emergent strategySource: Adapted with permission from Mintzberg, H., Patterns in Strategy Formation, Management Science, 24(9), (1978). Copyright 1978, the Institute for Operations Research and the Management Sciences , 7240 Parkway Drive, Suite 300, Hanover, Maryland 21076

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Figure 6.4 Constraints on managerial choice

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Managers have choice

But choice is constrained by• National objectives, practices and cultures:– GM and USA– Japan and Toyota.“What’s good for GM is good for USA” “What’s good for Japan is good for Toyota”

• Industry and sector norms:– Cars – Lean Production– Agriculture – State Intervention.

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Managers have choice (Continued)

• Business environment:– Stable– Dynamic.

• Organisational characteristics:– Structure– Culture– Politics– Managerial style.