Strategic Thinking and Strategic Planning: Two Pieces of the Same Puzzle

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Tim M. Lowder Saint Leo University June 14, 2009

the paper evaluates the strategic management process within the framework of its strategic planning and strategic thinking components. and the tactics and policies that are needed to attain those goals Porter (1980). Management’s understanding and use of strategy as a tool to ensure business success has been an important issue for many decades. the analysis makes conclusions as to the critical role of strategic management in organizational success. Second. Third and last. one can ascertain that there are many components of strategy.Abstract An organization’s strategy consists of many factors that form a formula or roadmap to provide guidance concerning the organization’s goals. how it will go about attaining these goals. the analysis first compares and contrasts the relationship between strategic planning and strategic thinking and their relationship to strategic management. . To accomplish this purpose. Thus. This paper’s purpose is to determine establish the critical components of strategic management.

the analysis first compares and contrasts the relationship between strategic planning and strategic thinking and their relationship to strategic management. As it has . how it will go about attaining these goals. 2005). “when executives call everything strategy. premises that management must comprehend the difference between strategic planning and strategic thinking in order to fully understand the meaning of strategy. they create confusion and undermined their own credibility” (p. 52). the analysis makes conclusions as to the critical role of strategic management in organizational success. To accomplish this purpose. Third and last. This paper’s purpose is to determine why strategic management is critical to organizational continuity and survival. Management’s understanding and use of strategy as a tool to ensure business success has been an important issue for many decades. according to Hambrick and Fredrickson (2005). Dimensions of Strategy Throughout the past 30 years. the paper evaluates the strategic management process within the framework of its strategic planning and strategic thinking components. one can ascertain that there are many components of strategy. the definition of strategy has become very fragmented because of narrowly specialized academics and consultants (Hambrick & Fredrickson. Thus. Consequently. and the tactics and policies that are needed to attain those goals Porter (1980). Mintzberg (1994). Second. and end up with a collection of strategies.Introduction An organization’s strategy consists of many factors that form a formula or roadmap to provide guidance concerning the organization’s goals.

1990). 1994. 1999. the analysis must define strategy to understand its implications for an organization. 2004). 2005. 1994. strategic planning is really strategic programming which represents the articulation or spelling out of strategies and visions (Mintzberg. it is imperative to define the strategy concept. the analysis will evaluate the components of strategic management including strategic planning or orchestration and strategic thinking or comprehensiveness (Hambrick & Fredrickson. 2005). Mintzberg. and understanding the implications of these factors for organizational success or failure. Thus. Scott. 1972. It is about strategic planning and strategic thinking. 1994). which means the art of the general. Next. & Lawler. 1990. and . fully integrated. Kast & Rosenzweig. Before proceeding in the analysis. Conversely. Spreitzer. The general of an army is solely responsible for the orchestration and comprehensiveness of their army’s strategy and its elements and pieces in forming a coherent whole (Conger. Hambrick & Fredrickson. ensuring that the organization’s structure is in alignment with its strategy. Consequently. 1971. Mintzberg. To define strategy one must research its Greek derivative strategos. collective set of choices established by the organization’s leadership. Dimensions of Strategic Management Strategic management is about understanding the development and implementation of strategy. strategy is a comprehensive. strategic thinking focuses on intuition and creativity from an open systems perspective and hinges on the creation of synthesis between the organization’s structure and its strategies (Bartee.been traditionally practiced. A general’s responsibilities demonstrate the importance and scope of the term strategy.

process-oriented and behavioral. resource-based. Mintzberg. 1994). . Linnarson. 1988. which focuses on attaining the right information and developing a mission and vision. to name a few (Bowen & Sharma. 2005. and strategic thinking. Throughout this emerging and evolutionary developmental process. Throughout the strategy process. structures and sub-systems. strategic management involves distinguishing between strategic planning. which focuses on aligning the organization’s structure with its strategic plan to create synthesis (Mintzberg. 2005). 1994). & Tichy. Fombrun. Devanna. & Piccaluga. Strategic Management’s Emergence Strategic management is initially traced to the 1960’s and its conception is linked to the concept of strategic adaptation developed through case studies (Herrmann. organic and mechanistic. and contingent designs. Modern organizations operate in a dynamic. 1990). This evolution is demonstrated by the historical and shifting paradigmatic constructs and approaches that focused on administration. Minin. 2005. Cesaroni. ever-changing environment that forces the organization’s structure to evolve and become extremely complex. 2005. 1981. contingency theory.orchestration and comprehensiveness (Hambrick & Fredrickson. As organizations have evolved and adapted to environmental factors out of the necessity for stability and continuity. 2005. Mintzberg. information processing. so has strategic management. Herrmann. strategic management has shifted from one paradigmatic construct to another. Strategic management’s paradigmatic construct has experienced the same dynamic environmental influences and has evolved to remain viable (Bremer. 1994). Herrmann. 2005. 2005. Mintzberg.

strategic .Strategic management is an emerging and evolving construct that is contingent on environmental change. 1972. Kast & Rosenzweig. and Gonzalez (2001). environmental analysis. it becomes essential that the strategist view strategic management within an open systems perspective. To assist in the adaptability to environmental factors. The organization’s structure must be flexible as it evolves and adapt both internally and externally to changing environmental forces. 2004. 1971. First. 1990. This important role of strategic management entails the use of strategic thinking. Second. Strategic Planning Claver. internal analysis. Alignment of the organization’s structure with its strategy allows the organization’s sub-systems to attain maximum inputs. deliver maximum throughput. Hannah. and thus generate maximum outputs which in essence creates systems synergy wherein the whole is greater than the sum of its parts (Asoh. strategic thinking focuses on intuition and creativity from an open systems perspective and hinges on the creation of synthesis between the organization’s structure and its strategies (Bartee. the paper addresses the strategic planning or orchestration component of strategic management. Mintzberg. 2006). gap analysis. As new strategies are developed and executed. Gasco. a primary goal of strategic management is ensuring the alignment of the organization’s structure with its strategies. The paper analyses both strategic management components based on their specific roles in the strategy process. Llopis. provide an excellent example of the strategic planning process that incrementally addresses strategic issues involving “current strategy. the paper addresses the strategic thinking or comprehensiveness component of strategic management. Scott. 1994. 2004).

companies offering substitute products. and technological innovations (PEST Analysis) (Mintzberg. and strategic choice” (pp. Powell. the strategist must ensure that they perform a thorough analysis of the organization’s value chain to address the required resources required for . and threats (SWOT Analysis) (Bremer. whereas the opportunities and threats represent external environmental factors in the organization’s periphery. The organization’s strengths and weakness include internal organizational factors to address. opportunities. 2003). buyers. During the fourth step in the strategic planning process. 469–470). Fifth. In the first step of the strategic planning process. Tichy. the strategist must perform a complete analysis of environmental forces that encompasses looking at political and regulatory influences. 1988. 1992). the strategist often uses Porter’s Five Forces Model of Competition. The Five Forces Model diagnoses the competitive environment and identifies rivalry between competing sellers. Porter. and potential new entrants (Porter. The SWOT Analysis also incorporates knowledge attained during the first two steps in the strategic planning process discussed earlier. resource considerations.alternatives. In other words. 1983). Key issues to address during this first step include the current strategy’s successes and/or failures and the strengths and weaknesses of the company’s current resources. 1979). 2005. Noel M. Herrmann. are current strategies and current resources supporting or diminishing the company’s objectives? In the second step. The third step in the process evaluates organizational strengths. 1980. the strategist must assess the organization’s current strategy and current resources (Bowen & Sharma. weaknesses. 2005. suppliers of resource inputs. societal and cultural influences. 1990. 1990. Regner. Mintzberg. economic factors and influences.

Emison (2004). authority. the strategist must ensure that the requirements of the strategic plan and its outcomes enhances shareholder value and is ethically feasible. and accountability and be proactive at building both a learning and . The strategist must take the information gathered during the programming phase to synthesized and organized it into an integrated and comprehensive set of tactics that can be executed and measured throughout the strategy execution phase (Mintzberg. Several essential components created during the planning phase and used during the execution phase include measurable plans. and budgets. 2005). 1994).strategy execution. this phase of the strategic process represents programming and a great deal of effort remains to carry out this programming. During the seventh and last phase of the strategic planning process. the analysis stated that strategic planning is only one component of strategy. These steps represent many of the micro and macro elements that a strategist uses during the actual strategic planning process and ensures the comprehensiveness component of the strategy (Hambrick & Fredrickson. 2005). This execution phase of the strategic process represents the orchestration component of the organization’s strategy and will be more thoroughly addressed in the next section (Hambrick & Fredrickson. the strategist must compile the information and formulate the execution component of the strategic plan. presents an excellent model for strategy execution and emphasizes that the strategist must focus on delegation of discretion. programs. Earlier. Sixth. Strategic Execution The strategy process strategic execution phase is as critical to organizational success as the planning or programming phase. According to Mintzberg (1994).

Denis & Rodney. 58).adaptive environment that can be effectively monitored (p. designing and applying participation methods. 2002. & Mok. Additionally. & Gonzalez. 56). management must have tools in place to ensure successful execution. Love. This model addresses the extremely important issue of enhancing organizational alignment of structure and strategy. creating and using communications systems. In addition.. Strategy development and execution is a multi-faceted. 2002. Tang. establish a supportive management information system. making known the objectives and results at each level. problem formulation. five stage process of inquiry. Irani. Both the approaches discussed above provide a useful perspective that management can use during the strategy execution phase to ensure that implementation is occurring at all levels within the organization. Yam. providing training. and promoting inter-area knowledge” (p. 2001. problem solution. 2005). to ensure execution success leadership must enhance cultural awareness. and experiment-testing of ideas (p. 480). Next. and establish a model of rewards and incentives to enhance employee motivation (Claver. spreading the culture of quality. the analysis will . Choudrie. broad based process that entails every aspect of the organization and thus. Llopis. these approaches provide a framework for both problem resolution and quality improvement during the strategic management process. (2001) presents an effective action plan ensuring strategy execution in a TQM environment that includes “analyzing processes. Emison (2004) presents an excellent tool for improvement during execution phase which is based upon Dewey’s (1986) pragmatic. Gasco. Claver et al. which includes problem recognition. Tam. reasoning. attain total commitment from management at all levels. & Gunasekaran.

1994. 1968. 1994.shift to the strategic management component of strategic thinking or comprehensiveness. Strategic Thinking and Comprehensiveness An open systems paradigm allows the strategist to observe and analyze the strategy process from both a strategic planning and a strategic thinking perspective (Bailey. Thompson et al. Mockler.. and innovation (Herrmann. As mentioned earlier. learning. These areas of strategic management are critical to organizational continuity and survival because they directly affect the alignment of the organization’s structure with its strategies and create synergy between the organizational sub-systems in a manner that minimizes entropy. strategic thinking requires that the strategist focus on an alignment of structure and strategy. Strategic Management and Innovation The final strategic management issue to address is innovation. 2005). Innovation is very important if the company desires to adapt and survive in its dynamic environment. Schonberger. Innovative organizations often attain a significant competitive advantage provided the market is ready for the product or service offering (Hamel. the paper evaluates several open systems issues and links them to the strategic management issues that include information. knowledge. attains maximum throughput. The component of strategic management not significantly evaluated thus far is strategic thinking. and innovation (Herrmann. . and enhances quality throughout the organization’s value chain. Mintzberg. This fact is extremely important because the new era of ferment in strategic management is focused on information. learning. In the next section. knowledge. 1973). 2005). 2006.

the strategic thinking component of strategic management involves intuition and creativity while adhering to an open systems perspective that focuses on the alignment of the organization’s structure with its strategies (Bartee. Summary Both organizational structures and strategic management have become extremely complex because of their adaptation to ever-changing environmental variables. Kast & Rosenzweig. 1994). 1994. Mintzberg. To understand this statement. address all the open systems strategic management issues. Once the company identifies and validates a market opportunity. and ensure that the company’s value chain resources are sufficient to carry out the tactical plan. The strategic planning component of strategic management represents the articulation or spelling out of individual strategies and visions (Mintzberg. there exists distinction between strategic planning or orchestration and strategic thinking or comprehensiveness (Hambrick & Fredrickson. the strategist must take into account the alignment of the organization’s structure with its strategies. As discussed throughout this paper. Conversely. 1971. 2005. The ultimate goal of strategic management is developing and executing strategies focused on organizational continuity and success and ensuring the alignment of the organization’s structure with these strategies. . To assure success as an innovator the strategist must move quickly to research and attain an understanding of the consumers’ wants and needs in the marketplace. the strategist must design and implement an initial strategic initiative. 1972. Innovative organizations remain focused while the company simultaneously scans the horizon for market trends and developments.2005). 1990).

Third. Second. . the strategist must understand that strategy is a “broad based formula” and encompasses many multi-faceted elements (Porter. In summary. 1994).Mintzberg. organizational survival is critically dependent on the strategist understanding of the broad-based nature of strategy and the comprehensive steps entailed in strategic management from both a strategic thinking and a strategic planning perspective. Organizational continuity and survival is contingent upon understanding these concepts. 2004). First. 1994. Scott. the strategist must grasp the fact that these two strategic management components are both distinct yet mutually dependent. 1980). the strategist must effectively comprehend the two distinct strategic management components that include strategic planning and strategic thinking (Mintzberg. 1990.

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