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Diversity in Strategic Management Theory – The Elephant in the Room

Diversity in Strategic Management Theory – The Elephant in the Room

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An essay for the 2011 Undergraduate Awards Competition by Róisín Donnelly. Originally submitted for Strategic Management at Trinity College, Dublin, with lecturer Dr. Jim Quinn in the category of Business & Economics
An essay for the 2011 Undergraduate Awards Competition by Róisín Donnelly. Originally submitted for Strategic Management at Trinity College, Dublin, with lecturer Dr. Jim Quinn in the category of Business & Economics

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Published by: Undergraduate Awards on Aug 29, 2012
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05/13/2014

 
 
Diversity in Strategic Management Theory
 – 
TheElephant in the Room
Word count:2990
Introduction
“Disciplinary fragmentation typically suggests a multiplicity of competing
schools with little consensus or sharing of beliefs about theory, methodology,techniques or
 problems” (Cooper,
2001). When fragmentation emerges in a field,there is often talk about what the different views are, but rarely as much about whythey emerged. This essay will examine why the field of strategy has evolved in somany directions. Firstly, a brief overview will establish just how diverse the roots of strategy are. Secondly, to explain this diversity, a number of factors will bediscussed; strategy as internal or external, the evolution of strategy due to limitationsof previous thought, strategy as underpinned by diverse roots, strategy as determinedby different outcomes and strategy as a deliberate or emerging process. Finally, itwill be discussed whether diversity in strategy is a strength or weakness of the field.
 Mintzberg likened strategy to the elephant, focusing on how examining one part indetail can make you see less of the elephant as a whole. This notion will be explored throughout, each argument will be supported by the analogy of the elephant asstrategy.
Paradigms of Strategy
It is first necessary to outline the different paradigms that have emerged.Some have stemmed from previous paradigms, supplementing, reinforcing, oroftentimes, taking elements of previous thought (Volberda and Elfring, 2001). Thereappears to be little consensus on how different schools and dimensions of strategyare grouped. Mintzberg et al. (1998) identify ten schools of strategy, Cummings andWilson (2003) visualize thirteen images of strategy, Johnston et al, explore fourlenses of strategy (2008)and Whittington proposes four perspectives on strategy(2001).What appear to be the three broad academic types that have emerged are thefield researchers or institutionalists, economics and behavioural sciences (Bowman
 
 et al., 2002). The field researchers identified, mainly as Chandler and Mintzberg,
offered “a rich description of the elements of strategy” (Bowman
et al., 2002:32)and, although their approaches varied, were focused on cases, histories and planning.The economics approach to strategy include the early industrial organisation(IO) economists (Porter, 1980), game theorists (Saloner, 1991), resource basedtheorists (Penrose, 1959; Barney, 1991) and evolutionary economists (Nelson andWinter, 1982).The third set of contributions comes from the behavioural scientists. Theseinclude work from the fields of organisation psychology, political science, sociology,population ecology (Hannan and Freeman, 1977) and cognitive science(Hodgkinson, 2007).These three different academic styles are also varied within their fields e.g. the focusof one particular aspect of economics such as IO is extremely different than the focusof the later branch of evolutionary economics. Nevertheless, the above classificationis a starting step in identifying the main areas of influence over strategy.
Mintzberg and Lampel
’s ten schools
of strategy (1999) (Appendix 1):
The ten schools of strategy are outlined below as they encompass many of thediverse fields of strategy and are therefore imperative in the discussion of diversity.In the design school, strategy is focused on achieving fit between strengths andweaknesses (internal) and opportunities and threats (external). The planning schoolbuilds on the design school but focuses on strategy as a more formal process. Thepositioning school focuses on generic strategic positions identified through industryanalysis. The entrepreneurial school sees strategy as broad perspectives rather thanrigorous planning. The cognitive school focuses on how strategy is formulated bymental processes in forms such as concepts, maps and models. The learning schoolsees strategy as an emergent process throughout the organisation. The power schoolstates that strategy is formed out of political processes within and outside theorganisation. The culture school suggests that strategy is a social process influencedby culture. The environmental school is concerned with the institutional pressure theorganisation faces. The configuration school groups different types of organisationalstructures and applies previous schools to these configurations (Mintzberg andLampel, 1999).
 
 Of the schools, the design, planning and positioning schools are prescriptivein nature. The remaining schools are descriptive and are all mainly based on thebehavioural sciences; the cognitive and learning schools are based on psychology;the power school is based on political science; the environment school is based onpopulation ecology; the culture school is based on anthropology (Volberda andElfring, 2001).
Strategy as a focus on internal, external or both?
 Is the elephant a function of its internal organs or does it respond to itsenvironment?
Hoskisson et al. chronicle strategic management evolution as a series of swings of the pendulum from focus on the internal aspects of firm to focus onexternal aspects (1999) (Appendix 2). The classical strategy schools of Chandler(1962) Ansoff (1965) and Learned et al. (1965/1969) were focused internally. Theseschools stated
that the success of a firm is a function of “its internal and uniquecompetitive resources”
,
where the “black box” or internal growth engines of the firm
were scrutinized as drivers of success (Hoskisson et al., 1999:419).As will be discussed, the need for more scientific evidence of strategychanged the direction of strategy research. However, fundamentally, as scientificinformation gave more empirical evidence of strategy, it also instigated a majordebate that is one of the deepest roots in the fragmentation in strategic managementtoday; should strategy be shaped by the internal nature of the firm, or the externalenvironment?Porter (1980) and Bain (1956, 1968) primarily focused on how the externalenvironment shapes strategy in producing their famous models, the structure conductperformance paradigm and five forces model respectively. These IO models suggestthat industry structure shapes performance (Teece et al., 1997). Similarly, researchon strategic groups did not examine firm performance but rather the performance of groups within an industry (Hoskisson et al., 1999). The sociological view of strategyas population ecology also examines how firms of similar types grow and stabilizewithin an industry (Swedberg, 2003). In these cases, the primary focus is theindustry and competitive position within that industry (Hoskisson et al., 1999).However, the rise of the resource based view, transaction cost economics andagency theory of the firm firmly reverts back to the firm performance aspect of 

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