Mintzberg proposed ten schools of thought on strategy formation: µThe first three schools are prescriptive in nature - more

concerned with how strategies should be formulated than with how they necessarily do form. « The six schools that follow consider specific aspects of the process of strategy formation, and have been concerned less with prescribing ideal strategic behaviour than with describing how strategies do, in fact, get made. Final group contains but one school. People in this school, in seeking to be integrative, cluster the various elements of « the strategy-making process.¶ From the six describing schools, the first two concentrates on individual level formation and following four have tried to open up the process beyond individual, to other forces and other actors.

THE PRESCRIPTIVE SCHOOL: 1. Design School: strategy formation as a process of conception Design school, which presented in the 1960s the basic framework on which the other two prescriptive schools built, focuses on strategy formation as a process of informal design, essentially one of conception. School¶s most famous notion is SWOT ± the assessment of Strengths and Weaknesses of the organization in the light of the Opportunities and Threats in its environment. At its simplest, the design school proposes a model of strategy making that seeks to attain a match, or fit, between internal capabilities and external possibilities. Design school deals with questions like:
y y

´What is the underlying structure of the industry in which the firm participates?´ ³How might foreseeable change in the social, political, and macroeconomic context impact the industry or the firm?´

Clearly design school deals with both internal and external subject of data. The underlying structure of the industry and internal capabilities can be evaluated with analysis of quantitative or µhard¶ data but more suitable way, in light of strategy formulation as a process of conception, is evaluation of qualitative or µsoft¶ information. The sources of information seem to be the internal sources in internal subjects and external sources in external subjects.

2. Planning School: strategy formation as a formal process Planning school formalize design school¶s perspective, seeing strategy making as a more detached and systematic process of formal planning. Central message is: formal procedure, formal training, and lots of numbers.

Positioning school argues that only a few key strategies ± as positions in the economic marketplace ± are desirable in any given industry. Entrepreneurial school. on the close-ended selection of generic strategic positions. Academics ran statistical studies from established data bases to find out which strategies seemed to work best where. Entrepreneurial School: strategy formation as a visionary process Some prominent writers have long associated strategy with entrepreneurship. or else promoted frameworks for selecting such strategies.The most of the school¶s strategic planning models are reduced to same basic idea: take the SWOT model. takes formal leadership seriously. but school¶s spirit is in formal procedures and analysing mainly quantitative data. was added on top. But another form of µstructure¶. like scenario building. while consultants touted favourable strategies for particular clients. that of the industry. articulate each of these with lots of checklists and techniques. so that industry drove strategic position that drove organizational structure. rooting strategy formation in the mental processes of the chief executive. . preferable in quantifiable form. Some attention was given also for organization itself but its position in strategic planning was only after preferred strategy was selected ± strategy precedes structure. Some newer aspects of planning school include qualitative information. Otherwise subjects and sources of information seem to be alike in design school: the internal sources in internal subjects and external sources in external subjects. Thus only information needed in strategic planning is external information collected from external sources. standing between prescriptive and descriptive schools. THE DESCRIPTIVE SCHOOL: 4. and have described the process in terms of the creation of vision by a great leader. It is referred to as the positioning school because it focuses on the selection of strategic positions in the economic marketplace. and give special attention to the setting of objectives on the front end and the elaboration of budgets and operating plans on the back end. divide it into neatly delineated steps. Positioning School: strategy formation as an analytical process Planning school was somewhat displaced in the 1980s by positioning school. Strategic µplanning¶ process focused more narrowly on calculation ± to be specific. 3. concerned with the actual content of strategies than with the process of strategy formation.

g. then strategy formation has also to be understood as the process of concept attainment in a person¶s head. any kind of information can be attached with this school. Basically. it gives no clues of what kind of information is needed. As with entrepreneurial school. On the other hand. 5. experience.. Cognitive school has two different wings: y y More positivistic. Information needed is Qualitative information. According to this school. Accordingly. and thus quantitative information with same sources and subjects is source for their visions. everything can work as a source of visions depending on the visionary¶s mental processes. some people are more focused on quantitative information than qualitative. and insight. as an organization adapts. Cognitive School: strategy formation as a mental process If strategy can be personalized vision. the world is too complex to allow strategies to be developed all at once as clear plans or visions. The other wing sees all of this as subjective: strategy is some kind of interpretation of the world. 6. Learning School: strategy formation as an emergent process For the learning school. opportunities in markets. e. on technical competencies or product innovation inside the company. a small but important cognitive school has also developed that seeks to use the messages of cognitive psychology to enter the strategist¶s mind. strategies emerge as people come to learn about situation as well as their organization¶s capability of dealing with it. wisdom. The most central concept of this school is vision: a mental representation of strategy created or at least expressed in the head of the leader. strategies can be traced back to a variety of little . judgement.School stresses the most innate of mental states and processes ± intuition. or ³learns´. treats the processing and structuring of knowledge as an effort to produce some kind of objective motion picture of the world. Eventually they converge on patterns of behaviour that work. Thus. or on service innovations derived from customer feedback. Hence strategies must emerge in small steps. As cognitive school concentrates more on what is happening in strategist¶s mind and how it processes the information.

but some conclusions can be drawn. y y What could be called micro power deals with the play of politics inside an organization. Culture is what is unique about the way we do all things. and thus information needs could be described to be similar as in design school. with other organizations. It seems that in micro power branch internal information is highlighted. usually out of selfinterest. situation in external environment and internal capabilities are highlighted. instead. which treats strategy formation as a process of negotiation. Information needs of learning school are not clear. Strategy takes the form of perspective above all. but with different twist. In previous schools. informed individuals anywhere in an organization can contribute to the strategy process. In cultural school. Information needs can be quantitative. There exist two branches also in this school. both as a source and subject of information. strategy formation is a process of social interaction. 7. like values. and volumes. in conflict.actions and decisions made by all sorts of different people. proportions. One focuses on internal actors conflicting with their colleagues. It is about what differentiates one organization from another. or cooperation. chief strategist or group of strategists used this information. based on the beliefs and understandings shared by the members of an organization. in macro power branch external information is highlighted. all employees of an organization can contribute to strategy creation. is the power school. Biggest difference is the user of this information. both as a source and subject of information. In learning school. Power School: strategy formation as a process of negotiation Similar to learning school. Power relations surround organizations. Macro power concerns the use of power by the organization. Hence the process is viewed as fundamentally collective and cooperative. but could include anything. or qualitative. 8. rooted in collective intensions. . they can also infuse them. the other sees the organization acting out of its own self-interest. like budgets. Cultural School: strategy formation as a collective process In contrast to the power school is the cultural school that considers strategy formation to be rooted in the culture of the organization. perceptions. and views. whether by conflicting groups within an organization or by organizations themselves as they confront their external environments. In other word. At the same time. However. Information needs of political school are not clear.

Accordingly. e. Limitations of this analysis include at least two things: y y Classification of school of thoughts has been made using quite different criteria. And so. But if organizations settle into stable states. of entrepreneurial growth or stable maturity. organization theorists believe strategy formation is a reactive process in which the initiative lies not inside the organization. then strategy making has to describe the leap from one state to another. in seeking to be integrative. Environmental School: strategy formation as a reactive process Proponents of environmental school. Configuration School: strategy formation as a process of transformation People in this school. it is impossible to evaluate. but with its external context. they seek to understand the pressures imposed on organizations.Information that plays most significant role in this school is thus information concerning beliefs and values of members of an organization. information concerning it is also most important for this school. THE INTEGRATIVE SCHOOL: 10. cluster the various elements of the strategy-making process. and thus these alternatives are altogether missing from results of our evaluation. As the environment is the actor in strategic management. organizational structures and their contexts. . the environmental school sees it as an actor ± indeed the actor.g. which incorporates much of the huge prescriptive literature and practice on ³strategic change´. Information needs in this school are depending which school or which stage is currently applied. for example. the content of strategies. another side of this school describes the process as one of transformation. the value of internal information about external conditions and external information about internal conditions. into distinct stages or episodes. sometimes sequenced over time to describe the life cycle of organizations. Because information needs of different schools has not been in the focus in classification.. 9. and thus classification doesn¶t fill all possibilities of the business information cube. This information can include both qualitative and quantitative information. with small exception in entrepreneurial and cognitive schools. Other schools sees environment as a factor.

Sign up to vote on this title
UsefulNot useful