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JMH 17,1

Ansoff revisited
How Ansoff interfaces with both the planning and learning schools of thought in strategy
Robert Moussetis
Department of Management and Marketing, North Central College, Naperville, Illinois, USA
Abstract
Purpose – The purpose of this paper is to revisit Igor Ansoff’s work and how it interfaces with the various schools of strategic management. Design/methodology/approach – Ansoff’s work of 40 years is reviewed and related to other schools of thought in strategic management. Findings – Ansoff’s work is much more comprehensive than the literature suggests. His later work (after 1990) is largely unnoticed by academics, nevertheless, it is the empirical findings of his theoretical postulations. Moreover, his work interfaces with virtually all schools of thought in strategic management. Research limitations/implications – It will provide a broader view of Ansoff’s work and perhaps trigger additional research as a result of his later work. Most researchers continue to associate Ansoff with his early thoughts. Practical implications – Ansoff’s work has found wide applications in a variety of industries. His work was mostly with industries that used his propositions in order to better strategies. Social implications – Ansoff’s later research and empirical findings could provide a launchpad for re-examining the method by which organizations assess their environment, strategic behaviour, and internal capability. Therefore, organizations may have an alternative method to develop strategy. Originality/value – This is the first attempt to provide a historical view of Ansoff’s work and perhaps his timeliness. The recent economic crisis only further supports Ansoff’s basic position that companies must create custom strategies to fit their environment, culture, and capabilities. Keywords Strategic management, Strategic change, Management history, Management theory, Management strategy, Business history Paper type Research paper

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Journal of Management History Vol. 17 No. 1, 2011 pp. 102-125 q Emerald Group Publishing Limited 1751-1348 DOI 10.1108/17511341111099556

Introduction A young scientist, Igor H. Ansoff, published his first article titled “The stability of linear oscillating systems with constant time lag” published in 1948 in the Journal of Applied Mechanics. If he only knew, that in 1957, he would publish the “Strategies for diversification” in the Harvard Business Review later to be followed with the seminal work on Corporate Strategy published in 1965, thus contributing to the intellectual domain for a new field in Strategic Management. In 2002, strategic management lost one of its early thinkers and writers, Igor Ansoff. Leaving a legacy as one of the founders of the field of strategic management, Ansoff created a distinctive thinking on strategic management. Surprisingly, however, only his early work continues to be referenced. He wrote the influential book Corporate Strategy in 1965 and after teaching at Carnegie and becoming the founding Dean of the Vanderbilt School of Business, Igor Ansoff spent about 15 years in Europe teaching and consulting. Subsequently, the US academia “forgot” Ansoff and, continues to cite his

early work. Although his early work was conceptually groundbreaking at the time, his later work, which included empirical evidence, went largely unnoticed in the academia. Even Ansoff (1998) suggested that his later work was more relevant than his 1965 book. Moreover, his interests were more in the consulting world, which left the academic setting with an “Ansoffian” gap. Ansoff was labelled as part of the “planning” school (Table IV) of thought in the field of strategy. However, his later work strongly suggests that his ideas are much more comprehensive (Al-Hadramy, 1992; Hatziantoniou, 1986; Jaja, 1989; Lewis, 1989; Salameh, 1987; Mitiku, 1992; van der Velten, 1997; Ansoff and Sullivan, 1993a, b). Historically, there are many competing theories in the field of strategy (Barnard, 1938; Hofer and Schendel, 1978; Lindblom, 1959; March and Simon, 1958; Burns and Stalker, 1961; Emery and Trist, 1965; Mintzberg, 1973; Quinn, 1978) leading to a diversity of strategy-making typologies (Bourgeois and Brodwin, 1984; Chaffee, 1985; Mintzberg, 1978; Nonaka, 1988). Moreover, empirical work (Miller and Cardinal, 1994; Schwenk and Schrader, 1993; Fredrickson and Mitchell, 1984; Miller and Friesen, 1977, 1983; Shrivastava and Grant, 1985; Wooldridge and Floyd, 1990) has provided a broad choice of forethoughts with competing schools of strategy. The purpose of this paper is to demonstrate that Ansoff’s work permeates into a larger domain of strategic management thought than previously suggested (Mintzberg and Lampel, 1999) and further contributes to the clarification on the debate between the “planning” and “learning” school in strategy. The planning school (Ansoff, 1991, 1994) argues that formal planning is beneficial for both stable and unstable environments while the learning school prefers logical incrementalism, particularly in unstable environments (Mintzberg, 1991, 1994a, b). Criticism of the planning school failed to consider the factor of time (Brews and Hunt, 1999). Although some research suggested a weak link between planning and performance (Boyd, 1991; Pearce et al., 1987), other research was critical of the design and methodology of early research (Thune and House, 1970; Kudla, 1980), hence, indicating a much greater link between formal planning (Ansoff, 1991, 1994) than previously argued (Mintzebrg, 1991, 1994a, b). Such studies (Pearce et al., 1987; Wood and LaForge, 1979, 1981; Fredrickson and Mitchell, 1984) utilized refined methodologies and suggested a stronger link between planning and performance. This paper will first provide a brief historical background, summary of Ansoff’s critical concepts relevant to his later research, and finally his permeation with the schools of thought as illustrated by Mintzberg and Lampel (1999). The scope and range of this paper will not permit the full development of each school of strategic thought. Although the foundation of this paper is based on the integrative work by Mintzberg and Lampel (1999), the author of this paper understands the limitations and potential difference of opinions relating to the degree and range of attributions of various schools of thought in strategy. Moreover, the author recognizes that there are many contributors to the field of strategic management who will not receive adequate examination as a result of the limited scope of the paper. Background Ansoff never fully engaged the academic establishment (Academy of Management annual meetings); hence, he never developed the intellectual domain (promote his ideas within the management field) to better illustrate and defend his theoretical and empirical postulations. Moreover, he was never convinced about “popularizing” his positions

Ansoff revisited

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History of managerial challenges In his attempt to describe the historical context of the change process. 1965) and the relationship of organizational structure and environment (Burns and Stalker. his 1990 book Implanting Strategic Management often reads like an engineering book with elaborate systems analysis. Ansoff failed again to engage the academic community. p. Therefore. it is clear that his work filters throughout Hamel’s and Prahalad’s book. The following section attempts to provide a general context about Ansoff’s thought process illustrating the process between external environment changes and a firm’s capability to adjust with their internal capabilities and corresponding behaviours. b. Ansoff. which was empirically tested (Ansoff and Sullivan. Summary of Ansoff’s work[1] Ansoff’s innovations on strategic management was to provide a methodology for managers to analyze. and Andrews. Ansoff introduced the concept of balancing “external characteristics of the product-market strategy and internal fit between strategy and business resources” (Ansoff. then establish the managerial behaviour and capability needed to succeed vs the present managerial behaviour and capability. it seems that Ashby (1960). therefore.JMH 17. clearly indicates the “intellectual debt” owed to Ansoff. For someone who thoroughly understands Ansoff’s work. indicating his basic premise of thinking that strategy is complex and. changing environmental contexts for organizations (Emery and Trist. 1961). 1963. Ansoff’s (1957a. 1957a. 1993a. 1965) early research suggested the evolution of his suppositions which were culminated to the famous Corporate Strategy book. 1965). Selznick (1957) and Simon (1957). b). xix). the future and quantify qualitative information. 1993a. Ansoff describes the features of various eras starting from the Industrial Revolution to the post-industrial or post-modern era (Ansoff and McDonnell. His approach to explain . His engineering and mathematical background was clearly evident in his approach to writing and teaching.1 104 into writings that resonate better with the wider academic world. Historically. and later Burns and Stalker (1961) and Chandler (1962) influenced his thinking and his preliminary ideas and theories. 1990. 1964. hence. Thus. Chandler. His work on strategic diagnosis facilitated the development of an optimal profile for firms to succeed (Table III). one may suggest that Ansoff failed to disseminate his ideas and empirical findings into a wider academic audience. 1962). by his own “strategic success” generating the intellectual gap within academia. b). Tables I-III illustrate his contribution and innovation to the strategic management field. Nevertheless. Ansoff’s work is based on developing an instrument to facilitate top manager’s aspirations to explore and exploit “future profit potential” hence competing for the future. hence. p. it was during this time where Ansoff enjoyed consulting much more than publishing and spreading his theories and empirical findings. For example. Based on his writings and postulations. Ansoff’s intensity about applicable research generated a few followers that entered the business world instead of pursuing academic careers. requires analogous respect and approach. systematically. thus paving for the relationship of strategy and structure (Chandler. Although Ansoff has published empirical findings (Ansoff and Sullivan. the work by Hamel and Prahalad (1996. his propositions are infused throughout literature and popular works on key turning points of the strategy that has given credit to his work. 413).

Production Turbulence scale Environmental turbulence 1 Repetitive 2 Expanding slow incremental Reactive Incremental based on experience Production adapts to change Marketing 3 Changing fast incremental Anticipatory Incremental based on extrapolation Marketing pursues familiar change Entrepreneurship Creativity 4 Discontinuous predictable Entrepreneurial Discontinuous based on expected futures Strategic seeks new change 5 Surprising unpredictable Creative Discontinuous based on creativity Flexible seeks novel change Ansoff revisited Strategic Stable aggressiveness Based on previous cases Responsiveness Custodial of capability suppresses changes 105 Table I. reused with permission of the Ansoff Family Trust Production Turbulence scale Environmental turbulence 1 Repetitive 2 Expanding slow incremental Reactive Incremental based on experience Production adapts to change Marketing 3 Changing fast incremental Anticipatory Incremental based on extrapolation Marketing pursues familiar change Entrepreneurship Creativity 4 Discontinuous predictable Entrepreneurial Discontinuous based on expected futures Strategic seeks new change 5 Surprising unpredictable Creative Discontinuous based on creativity Flexible seeks novel change Strategic Stable aggressiveness Based on previous cases Responsiveness Custodial of capability suppresses changes Table II. Optimal scenario . Suboptimal scenario Production Turbulence scale Environmental turbulence 1 Repetitive 2 Expanding slow incremental Reactive Incremental based on experience Production adapts to change Marketing 3 Changing fast incremental Anticipatory Incremental based on extrapolation Marketing pursues familiar change Entrepreneurship Creativity 4 Discontinuous predictable Entrepreneurial Discontinuous based on expected futures Strategic seeks new change 5 Surprising unpredictable Creative Discontinuous based on creativity Flexible seeks novel change Strategic Stable aggressiveness Based on previous cases Responsiveness Custodial of capability suppresses changes Table III. Matching strategic aggressiveness and responsiveness of capability with turbulence Source: Ansoff and McDonnell (1990).

the managerial approach moved to a more marketing function. The concepts selected represent a core basis on Ansoff’s work and were fundamental in his later research (empirical work using strategic diagnosis). global competition. The early management periods were dominated by production first and marketing later where the change process was rather slow and mostly organic. The attempt of this research effort is to utilize only the concepts of environment. his vivid illustration of the Ford Motor Company being dominated by the production function was the appropriate managerial function between the years 1900 and 1930 when the Industrial Revolution was consolidated into mass production. he established a model to help managers quantify qualitative observations about environmental shifts and provide a change management tool sensitive to the complexity. allowing the managers to better understand and manage the change process as a function of environmental variability. Phillips. novelty and predictability of change. its failure to change in a timely manner allowed the more marketing-oriented General Motors to ascend to the top of the industry in the late 1930s. Hence. frequent industry changes. Ansoff’s deep understanding of the holistic approach to strategy led him through a lifetime of improving his basic theoretical propositions established back in 1965. environmental turbulence. This is the historical moment where Ansoff expands his thinking beyond the formal planning to include a wider set of contingencies. thus. His work on environmental variability as a determinant of strategy was instrumental in leading effective changes in companies around the world. strategic behaviour (Ansoff.e. thus a new managerial approach capable of capturing change in a timely fashion was suggested. 1987). Although Ford Motor Company dominated the production era. increased government regulations. once the need of basic consumer goods was satisfied (i. The next section provides a brief overview of the major concepts and approaches he had developed that facilitate effective change. change is often corollary to systemic and/or behavioural resistance to change). Bayer. and strategic diagnosis since they represent the foundational concepts required to bridge Ansoff’s wider . strategic orientation. The post-industrial period though was characterized by an affluent society with novel demands in a technologically fast-changing environment. Ansoff’s industry experience with strategic planning resulted in his basic postulation that includes three primary dimensions: strategy formulation. Lastly. Moreover.JMH 17. His historical reference continues with his observation of the general accelerated change. This new context of managerial setting necessitated the change towards the long-range planning approach. management capability and design.e. For example. companies that utilized his services such as IBM. he observed that firms increasingly faced rapid market saturation.1 106 the managerial characteristics defining firms of the respective time periods formulates the context to establish a domain for the change process. This led to the strategic success hypothesis (which has been empirically validated) with the development of turbulence scales and the need for a corresponding managerial capability and strategic orientation according to the changeability and predictability of the firm’s environment. He developed a plethora of mechanisms and approaches that organizations found relevant and applicable in real time. political upheavals. novel technologies and continuous threat of substitute industries. the concepts serve as a foundation of Ansoff’s work on strategy and change. and the US Navy were among some of the better know organizations. Banamex. However. Ford Motor Company and the T-model). and management of transformational change. Northern Telecom. rate. managerial capability and behavioural characteristics (i.

Ansoff postulated the term environment serving organizations (ESO) as any organization that provided goods and/or services to the environment and consumes resources in the process. 1965. Woodward. 1978. hence. The most important contingent force. they also serve as a launch base for future research. In discontinuous environments. sociological. 1965. b.e. strategy is often determined as a result of environmental turbulence (Buchholz and Rosenthal. Lawrence and Lorsch. Scholars have postulated the dependence upon the environment (Aldrich and Pfeffer. 1961). b. Donaldson. Thompson. Peery. Furthermore. 1967). Environmental turbulence is the combined measure of changeability and predictability of the organization’s environment (complexity. Lawrence and Lorsch. etc. primarily into two large categories: historic and discontinuous. complex. However. etc. 1967a. 1995. 1961. the future could be completely unpredictable and invisible. Sine et al. conversely. dynamic. Ansoff was associated with the change process of mechanistic organizations (Burns and Stalker. b. 1965.) hence. Ansoff divided the environment. 1972. Carroll. Post. rendering his postulations to fit a wider range of strategic thought. 1967a. which defines the required responses to the environment that determine the success of an ESO. Vernon-Wortzel. the future is partially visible and predictable. psychological.integration to a broader range of schools of thought. 2006). However.. decisions about the future are based on past and present events that can be extrapolated into the future. Environment The use of this term was all inclusive and it was meant to examine economic. forces in the area(s) that an organization chooses to operate. and turbulent (Emery and Trist. 1978. 1995a) that indicates a “fit” between the external vs internal changes as they relate to organizational performance. Ansoff’s later postulations suggested that he was considering a wider set of variables (i. discontinuous. Furthermore. 1994). 1993. In addition. there are several authors that have utilized the concept of environmental turbulence. Hannan and Freeman. Drucker. novelty. is the environmental turbulence. Pfeffer and Salancik. geopolitical. Post. 1994. what type of strategic behaviour produces optimal performance? Ansoff revisited 107 . 1978) and the variability is known as environmental turbulence. changes are based on building scenarios utilizing weak environmental signals. political. change is possible by using weak signals from the environment. 1995. 1972. thus resisting to subscribe to the organic evolution in turbulents environments since often there is not time for an “organic adjustment” and also often new organizations in turbulent settings require formal planning (Stichcombe. 1967a. In historic environments. 1976. the research typology has portrayed environments primarily as stable. 1992). 1989. Child. predictable. uncertain. moreover. technological. therefore. 1980. static. Strategic orientation behaviour Strategic behaviour leads to different levels of performance (Morrison and Kendall. Ansoff’s later postulations argued that organizations should apply a change process that is appropriate to their environment and internal behaviour and dynamics. and visible. Duncan. and visibility). rapidity of change. Change is incremental. cultural. behavioural. Lawrence and Lorsch. Ansoff’s later work suggested some degree of consistency with the contingency approach (Burns and Stalker. Lastly. Marcus.

1980. structure. Strategic diagnosis This is perhaps the most innovative tool Ansoff created both conceptually and practically. in benchmarking. however. Performance is optimal if strategy and capability match the environmental turbulence (Ansoff and Sullivan. which are still in a pre-infancy stage or have yet to form.. 1993a.1 108 The typology developed by Miles and Snow (1978) provided a foundation for other scholars of organizational behaviour interested in the relationships between strategy. creative. The validity and reliability have also been affirmed as usable to explore organizations and their strategies (Shortel and Zarac. Moreover.JMH 17. Beam. As a result. 1994. In short. in highly concentrated industries (Porter. and strengths (Ansoff and McDonnell. and process. and innovative settings. weaknesses. and other companies receiving accolades for their exceptional performance or the Thai Government model of success prior to 1995-1996). . which is a systematic approach to determining the changes that have to be made to a firm’s strategy and its internal capability in order to assure the organization’s success in its future environment. 1989. threats. 1993a. which facilitates the goal of this research to associate environmental turbulence and strategic behaviour orientation to performance. reengineering did not provide a process beyond the reengineered organizations. 2001). b. they offered little guidance for industries in highly entrepreneurial. The context of this analysis lays with the rapid technological changes and sudden industry shifts that generate a challenging strategic setting for most post-modern organizations. D’Aveni. Ansoff and Sullivan. firms were told that following the best practices of the industry will likely make you successful as well (imagine benchmarking WorldCom. Ansoff suggests that there are two key problems: (1) Each firm must develop the capability to diagnose future challenges. Segev. Hambrick. The suggestion is that organizations employ a different organizational response (endogenous-driven behaviour) depending on the environmental (exogenous-driven process) conditions (contingency). 1994). Ramaswamy et al. 1999). For example. opportunities. The typology is also consistent with theoretical and empirical studies (Ansoff. McDaniel and Kolari. Ansoff’s contribution is a tool to facilitate the “translation” of qualitative data into quantitative numbers that assist managers in developing a direction. the strategic behaviours focusing on low costs and product differentiation are excellent tools. Pelham. 1990). The purpose is for managers to have tools to effectively encounter the relentless changes and turbulence of their environment (Ansoff and McDonnell. (2) Each firm must consider developing an in-house response mechanism to fit their needs. This diagnostic procedure is derived from the strategic success hypothesis and empirical studies. It allows companies to essentially diagnose their optimal future profit potential. There is a continuous evolution of the “change agenda” with strategic “fads” intending to provide universal prescriptions to an organization’s future success with a generally low success rate. 1990). This tool is the strategic diagnosis (Ansoff and McDonnell. 1990. total quality of management was highly successful in Japan but other cultures showed mixed results. there are no universal prescriptions for future challenges. b. 1979. 1983. Tan and Litschert. 1990). Enron few years back. 1987. 1994).

1984. (2) responsiveness of the organization’s capability matches the aggressiveness of its strategy. hyper competition (D’Aveni. 1980). 1995). 1978). 1989. 1994. 1980) or to the development of effective managers (Drucker. 1958.Strategic success hypothesis states that an organization’s performance potential is optimum when the following three conditions are met: (1) aggressiveness of the organization’s strategic behaviour matches the turbulence of its environment. etc. Table II indicates a sub-optimal scenario and Table III indicates an optimal scenario for an organization (see tables for better clarity): . there is the great debate among various thinkers on the strategy-making process with a variety of strategy-making classifications (Barnard. Tables II and III indicate two different scenarios of what potentially may happen in the market. Mintzberg. 1954. marketing. logical incremenatalism (Quinn. Bourgeois and Brodwin. Salameh. strategic. This tool has been used successfully to determine strategic success and failures in largely unpublished (Al-Hadramy. 1985. Lewis. Lastly. Chaffee. Nonaka. 1989. In addition. Quinn. 1987. 1978. 1973. the field of strategy and surrounding disciplines have populated the literature with an array of theories and prescriptions. entrepreneurial. Argyris and Schon. 1962) or the concept of strategy as a policy generator (Andrews. which will correlate with suboptimal performance. Hatziantoniou. 1992. 1988. 1992. and (3) the components of the organization’s capability must be supportive of each other. 1965. 1985. 1993a. we had research on competitive advantage within a given industry (Porter. 1980). Those are the empirical studies post-1990 that define Ansoff in a broader scope and suggest his interface with other schools of thought (Table IV). 1978. From developing individual potential within an organization (Argyris. Table I summarizes the diagnostic instrument. 1996). Jaja.. proactive. . Ansoff argues that such a firm will display a strategic gap. Table II illustrates a scenario in which the firm’s environment is discontinuous but the company maintains a strategic orientation that is based on past information. and competing for the future (Hamel and Prahalad. 1938. 1959.). March and Simon.). 1969. Lindblom. etc. as indicated earlier. Hofer and Schendel. For example. 1999. 1948) to the pioneering work on strategy and structures (Chandler. D’Aveni et al. 1986. Strategic aggressiveness is the strategic orientation of the general management (reactive. Hence. entrepreneurial. Mitiku. 1938. 1975. Table I illustrates the basic premise as proposed by Ansoff and McDonnell (1990). 1999). van der Velten. Ansoff’s interface with others schools of thought in strategic management The background on strategic management has a plethora of work that will be virtually impossible to adequately develop within the pages of this paper. Ansoff revisited 109 . 1964. 1974). 1978) to managing values (Barnard. b). The broad divisions of strategic management thinking are the prescriptive school of thought (or “ought to be”) and the descriptive (or “is”) (Mintzberg and Lampel. 1997) and published works (Ansoff and Sullivan. creative. Responsiveness refers to the functional orientation of the general management (production.

pessimists in one wing.E. March Psychology (cognitive) Entrepreneurial J.1 Sources Base discipline Champions Intended message Ansoff’s turbulence scale as it applies to each school of thought Realized message Prescriptive “A stitch in time saves time” School category Associated homily Table IV. Simon and J. Economics (industrial systems theory. Cole None (although early writings come from economists) Popular business press and individualists Envision 4-5 Environments are discontinuous and surprising.I. and organization) an cybernetics military history Professional managers. Schumpeter and A.A. Ansoff Cognitive H. Ansoff with all the schools of thought as described by Mintzberg and Lampel (1999) Planning H. entrepreneurial approach is needed Centralize (then hope) Calculate (rather than create or commit) Prescriptive “Nothin’ but the facts ma’am” Positioning D. Selznick None (architecture as a metaphor) Case studies Fit 1-3 Organizations can study past problems and prescribe action Think (strategy making as Program (rather than a case study) formulate) Prescriptive “Look Before you Leap” . and staff “boutiques” experts Formalize 1-3 Speed of change allows time to plan and respond Analyze 1-3 Speed of change is fast but still with adequate time to respond Those with psychological bent.A.H.G.110 JMH 17. Porter Some links to planning. Schendel and M. and optimists on the other Cope or create 1-5 All levels are possibilities Worry (being unable to cope in either case) Descriptive “I’ll see it when I believe it” (continued) Descriptive (some prescriptive) “Take us to your leader” Design P.E. and consulting MBAs. Analytical staff.

Chaos theory and mathematics People who like power.C.]” Source: Mintzberg and Lampel (1999) with Ansoff inserted Ansoff revisited 111 Table IV. .M. adapt) Descriptive and prescriptive “To everything there is a reason [.Sources Anthropology Base discipline Power G. J. try. Mintzberg. and conspiracy Population ecologists React Levels 1-3 Organic adaptation is subject to adequate time Population People who like the social.E. K. Snow History Champions Learning C.G. Freeman (contingency theorists) Biology Configuration A. Chandler. politics. the spiritual. March.R. and ecologists and some organization the collective theorists Intended message Learn Promote Coalesce Levels 1-3 Levels 1-3 Ansoff’s turbulence Levels 1-3 Reaching scale Those are the levels where Those are the levels where power could be consensus requires power could experiment ample time used to advance a with new strategic areas change agenda and develop new innovative ideas Realized message Play (rather than pursue) Hoard (rather than Perpetuate (rather change) than change) School category Descriptive Descriptive Descriptive Capitulate (rather than confront) Descriptive “It all depends” “An apple never falls far from the tree” Associated homily “If you first don’t succeed. “Look out for number try. Rhenman and R. Pfeffer. again” one” Lumbers and integrators in general. Lindblom. .T. . R.E. Astley Political science Cultural E. and C.K. change agents. C. G. Configuration (Holland) vs transformers (USA) Integrate and transform Levels 1-5 Depending on the environmental demands. Miles.E. Prahald and G Hamel None (perhaps some peripheral links to learning theory and psychology and education). H.Normann Environmental M.D. Salancik and W. Allison.T. R. Hannan and J. the organization formulates a “contingency” plan Lump (rather than split. Weick.

For levels 1-3. Ansoff’s connection Ansoff suggested precisely the basic premise of the design school since his basic argument is that external turbulence must be matched by corresponding internal capability and behaviour to respond. became an oddity within his own company in the mid-1980s when the computer industry moved to a marketing-oriented setting. Ansoff has labelled levels 1 through 3 as the incremental environment. For example. the value of understanding how Ansoff interfaces with other schools of thought rests with the premise that Ansoff is much more dynamic and comprehensive than previously labelled. Case studies were the primary tool to develop policy and strategy. The principle of “fit” is suggested when using Table I.JMH 17. Hence. . Design school This is one of the original perspectives. Generally. the premise of levels 1-3 is the time availability for change. Apple Computers hired the former Chief Executive Officer (CEO) of Pepsi (a marketing expert). hence. the fit of Steve Jobs’s strategic aggressiveness and responsiveness matched the new environmental conditions (i products). the organization must have the necessary managerial capability to respond (Dobni and Luffman. and threats (SWOT) analysis. Moreover. 1957). the suggestion is that the optimal scenario is that strategic orientation and managerial responsiveness are also at level 3. In Table III. 1962. the environment of Apple Computers had moved to level 3 (dominated by marketing – price sensitive) while the strategic orientation of Steve Jobs remain at level 5 (creativity). and incremental changes to the product/service) as well as competing on price/marketing appeal. which views strategy as a “fit” between internal strengths and weaknesses and external threats and opportunities (Chandler. if the environment (external opportunity) is dominated by marketing. 2003). At the time. which made perfect sense since the personal computer market had moved into a marketing-oriented setting. it is not accidental that Steve Jobs returned to Apple when the company developed a need to move into the cutting edge of technology again.1 112 The Ansoff school of thought is environment driven. hence. which clearly provides a tool to establish the fit between external changes and internal capabilities. Ansoff believed in “what is” since the environment directs your response. weaknesses. His strategic diagnosis instrument provides a launch base to accommodate much wider external and internal settings. but he also proposed a response mechanism (what ought to be) based on the environment the organization is operating under. Mr Jobs wanted to continue with cutting-edge technologies. creating the gap. Ansoff suggests that a SWOT approach is appropriate considering that the environmental conditions are changing at a speed with which the firm can cope adequately. productivity. from stable to highly turbulent. opportunities. Moreover. It is commonly known in literature as the strengths. Selznick. the SWOT analysis is an excellent tool for low-level turbulence. Steve Jobs. 2000. Ansoff dynamism. hence. internally. levels 1-3 are dominated with organizations attempting to achieve economies of scale (repetition. The founder of Apple Computers. hence. Thus. The next section will provide a brief overview of each school of strategy as described by Mintzberg and Lampel (1999) and integrate how Ansoff’s work interfaces with each school of thought. then. On Ansoff’s scale.

the scale created by Ansoff has clearly indicated that the environment at turbulence levels 4 and 5 indicates high complexity. thus. he predicted that companies such as AT&T or IBM would not survive as they were unless they developed levels 4 and 5 strategic behaviour and organizational responsiveness. 1992) was an attempt to establish some parameters for the top management in discontinuous environments. and unpredictability (Table I). high speed of change. hence. the failure of communication companies to move into wireless technology. hence. and create as a derivative of the environmental turbulence. he had created other tools to facilitate sudden changes in the environment. and. If there is a plenty of time to change (low turbulence 1-2). the premise that Ansoff is only part of the planning school of thought is incomplete. which were unpredictable. hence. Lastly. thus. The assumptions were that the external settings were changing rather slowly. he talked about the discovery of transistors at the time of vacuum tubes and more recently. Ansoff suggested that the SWOT analysis is contained within an industry and cannot be used as a tool to anticipate changes that are external to the industry. Therefore. Ansoff realized that the speed of change will not allow the planning process to take place in the traditional sense. he realized that management must be capable to analyze. Ansoff spent his latter years concerned with the environments. allowing time for the strategic process to be decomposed into small formal steps. 1990). differentiation. Similarly. Porter’s view still dominates the strategy texts with the three basic approaches: standardization. with corresponding power structures. cope. develop the appropriate managerial capability and strategic orientation. Ansoff’s connection This is the attribution given of most authors regarding Ansoff’s work. then. the process is more formal than rational (Chandler. 1965). and focused strategies along with the five forces model. However. a different set of strategic orientation and managerial responsiveness. maintaining a level 4 or 5 behaviours and capability. and discontinuous. D’Aveni et al. 1995). Positioning school In this view. For example.. Ansoff referred to the ever-increasing market share and production efficiency of companies in the horse carriage industry at the time of the discovery of the combustion engine. the issue management approach and crisis mode are a couple of Ansoffian tools used in discontinuous settings (Ansoff and McDonnell. 1962. However. Moreover. competence and capacity. Classically. complex. Ansoff revisited 113 . Deservedly so. a formal approach is suggested. Ansoff. Moreover. how managers fail to see the emergence of a new technology. managerial climate. Planning school This is the school of thought that evolved from the early diversification thinking that was entering the industries in the 1950s. hence. he had indicated the translation of emerging weak signals in the firm’s environment into progressive action. His prediction of AT&T (break up) and IBM (Microsoft and Lenovo) is strategically consistent with his forecasts. His unpublished book-paper on strategic leadership (Ansoff and Sullivan.hence the indication of the case approach to strategy in extrapolative environments (levels 1-3). formalized analysis of industries provides generic positions (Porter. 1980.

). learning curves. Thus. This does not diminish the importance of a CEO in levels 1-3. 1959). differentiation. and focus). March. the incremental nature of levels 1 through 3 requires a less entrepreneurial approach. flexibility. Porter’s approach leaves little room for strategy when industries are at an infancy or incubation period (biotech industry 15-20 years ago). 1965. Considering that an entrepreneur is working in environments ranging from partially predictable to surprising and unpredictable. and leadership are the characteristics of a CEO to navigate the turbulent settings. The premise of Porter’s approach is based on an existing industry (hence. 1957. price. When the environment shifts. this school of thought relied on the leader to have the vision and the capability to implement it. though. The method used by top management within an organization to filter the external elements establishes the capability of top management to accurately . however. and concept attainment facilitate the strategy formation (March and Simon. This shifted the process from steps and design to envisioning (Cole. The changes are generally predictable based on industry analysis. Entrepreneurial This school of thought centered the process on the chief executive. the standardization approach is based on an incrementally expanding environment. Hence. etc. 1997). Unlike the planning school. Simon. Ansoff’s connection The managerial perception of environmental turbulence determines the establishment of the turbulence intensity. Although every organization has a vision. For example. the differentiation strategy is a marketing-based approach (got to let the customer know about our differentiated product. it relied on the leader’s intuition. 1958. Ansoff’s scale also provides a process for partially predictable and surprising situations as is the case of the entrepreneurial environment. Ansoff’s instrument addresses the cost-based environment (usually levels 1 and/or 2) and the differentiated environment (level 3).. 1988). Predictable. Ansoff indicated that the entrepreneurial and/or creative behaviours are the critical elements in levels of high turbulence (Calantone et al. Porter’s approach is limited to searching for focused differentiation. Cognitive school Strategies are developed in people’s minds. levels 1-3) while Ansoff provides additionally a tool for emerging and novel industries (levels 4 and 5) accommodating highly dynamic and volatile settings (Chakravarthy. hence the establishment of Porter’s primary three strategies (low cost. cognition as information processing. Correspondingly.1 114 Ansoff’s connection The turbulence scale matches up nicely with Porter’s positioning school for levels 1-3. and the managerial capability is dominated by the capability of managers to generate “better” standardization. Vision. to highly turbulent (Ansoff’s scales 4 and 5). Ansoff’s connection Levels 4 and 5 on the turbulence scale are clearly indicative of Ansoff’s fit to the Entrepreneurial school of thought. hence the dominant strategic behaviour of managers needed for this setting is incremental experience (diminishing costs. and reduction of cost). 2003). knowledge structure mapping. service.JMH 17.

they just decided to dress differently. strategies are emergent. hence. 1971. and develop a knowledge base (learning) while the issue management (Ansoff and McDonnell. Ansoff’s connection Highly turbulent environments cannot afford the luxury of politics and posturing within the organization. this school of thought is subject to time available. consequently.measure the intensity of the turbulence. thus the learning school’s basic premise can only find applications in incremental environments (1-3). 1993b). For example. the weather was the same. Hamel and Prahalad. Ansoff has indicated that incremental Ansoff revisited 115 . However. 1993a. The weak signal (Ansoff and McDonnell. Learning school Here. and confrontation among stakeholders/actors who possess power within the organization. Metaphorically. power over partners and stakeholders is used to negotiate favourable strategies (Allison. generating different strategic directions. and power filters as elements that top management must be aware of when gathering information (Ansoff and Sullivan. 1984). 1959. allowing top management to generate an effective strategy-response (learn) in a timely manner. b. generating different directions. 1990) approach provides a mechanism to classify emerging issues according to their urgency and priority. Ansoff identified the surveillance. thus. identify potential emerging threats. Weick. His approach also cautioned top management about filtered information rising through the ranks when attempting to develop accurate perceptions (cognition) of the environmental turbulence. Power school Strategy is a process that involves bargaining. 1990) tool offers a graduated response mechanism where the firm will scan the environment. therefore. 1996). It is highly likely for two executives to view the same environment and arrive at different conclusions. This descriptive school of thought challenged earlier versions of the planning school and within this school of thought people were inclined to experiment with ambiguity and adaptability. The environment was the same for both companies but strategic decisions/perceptions were different (Ansoff and Sullivan. very differently the evolution of computer software. providing an environment conducive to learning. Ansoff indicates that top managers routinely generate their own cognition since they interpret environmental signals differently (knowledge structure mapping). learning requires time and environments characterized with high turbulence require immediate response. Externally. formulation and implementation of strategy intermingle (Lindblom. Ansoff has strongly indicated that the scales he developed rely largely on the capability of the top management in an organization to accurately perceive the turbulence in order to develop the appropriate strategy and capability. Burgelman and Grove. 1978. thus. High turbulence indicates a rapidly changing environment characterized by entrepreneurship and creativity. persuasion. strategists are found throughout the organization. IBM and Microsoft in the early 1980s perceived. Astley. Ansoff’s connection The learning school is appropriate for levels 1-3 considering that time is the critical element to mount an effective response. Pfeffer and Salancik. 1996). 1979. mentality.

1995. In his unpublished work (1992). Lawrence and Lorsch. Drucker. he pointed to the impact of the rules of the game (regulations and legislation) and the need of organizations to build legitimate strategies as tools to influence the rules of the game (hence. 1980. Moreover. Such organizations are institutions of higher education where dispersed power. Change is slow and laborious. Strategy is a social process rooted in culture (Rhenman. he analyzed the aspirations and possible coalitions between external and internal stakeholders. Environmental school This school of thought suggests. 1978. Pfeffer and Salancik. he has identified the power sources. Marcus. bargaining. a highly decentralized company (multinationals) requires a consensual approach to strategic response. and process become a critical strategic characteristic as a tool to establish persuasion avenues among stakeholders (both external and internal) to negotiate the favourable strategies. 1967). If politics are dominant. 1977). In this case. 1994. Child. As indicated earlier. Such organizations can compete effectively only in levels of turbulence 1 and/or 2 and perhaps 3. 1978. that an organization maneuvers accordingly in order to respond effectively (Hannan and Freeman. the bargaining process dominates persuasion and development of consensus. Normann. the importance of power and the political process). 1972. structure. management response to surprising changes. Thompson. Peery. but also serves as a change agent. managers must have the corresponding capability and behaviour to cope. he suggested modes of managing resistance to change and clearly delineated the difference between systemic and behavioural resistance. if a firm is in a highly turbulent regulatory and/or legislative setting.JMH 17. Strategy is often determined as a result of environmental turbulence (Buchholz and Rosenthal. The underlying assumption in his unpublished work along with all of his early 1990s work is that managerial capability and behaviour must accommodate the demands of the environment. 1977). Moreover. Cultural school This school of thought focuses on common interests and integration. This school suggests the dual role of culture. political power. 1993. though. . 1989. and weak signals are some of the tools employed by Ansoff to counter an effective response to the variation of power. structure. environmental variation has an impact on the strategy formulation (Aldrich and Pfeffer. 1995. it is notably a strategic change deterrent. Furthermore. where power is decentralized. Ansoff dedicated a considerable portion of his work to illustrate the power domains internally and externally within an organization. 1967a. the power structure and process are the critical elements in mounting effective responses. and consensus are dominant features. It became central to strategic thinking as a result of the cultural impact derived from Japanese style management. Ansoff’s connection Ansoff indicated that some organizations. Vernon-Wortzel. The elements of resistance to change as a function of time. given the environmental conditions. strategic issue management. Hannan and Freeman. In this instance.1 116 levels where change is slower could be dominated by politics. A crisis. 1994). provides leadership an opportunity to bypass the bargaining approach and the consensus culture to take action to “save” the organization (usually). 1976. For example. b. 1973. and processes in developing effective tools for managing organizations. Post. Carroll.

Figure 1 shows the basic premise (Mintzberg and Lampel. an entrepreneurial setting suggests a transformative approach. For example. the most critical element in strategic design. 1984). hence. Furthermore. Ansoff is routinely quoted for his 1965 work only. this school of thought is broader and integrative since it considers on one hand organizations as a collection of attributes and behaviours but also integrates the suggestions of other schools. In addition. thus confirming his basic premise illustrated in his definition of the strategic diagnosis that each firm must consider developing an in-house response mechanism to fit their needs. It is very surprising not to see Ansoff associated with this school of thought. Figure 1 shows that when Ansoff revisited 117 . 1978. In addition. this represents one configuration. and degree of future visibility (Ansoff’s basic elements constructing the turbulence scale). Mintzebrg.Ansoff’s connection Clearly. 1979. Metaphorically. you have to dress for the occasion and the weather. the configuration school provides the more integrative approach (Chandler. however. Miller and Friesen. Table IV indicates how Ansoff’s turbulence scale will match each school of thought. Table IV has summarized all the main authors in each school. The turbulence scale is an instrument that facilitates top managers to analyze external conditions and maneuver accordingly. as indicated at the beginning of this paper. tools used (champions). Consequently. Hence. This research was also published in 1993 (Ansoff and Sullivan). base disciplines (from where each approach derived). this does not account for a critical factor: time. 1999) of the strategy used in relation to external world vs the internal process. This is an important distinction in Ansoff’s work that research has not explored adequately. again. thus. Identifying the respective turbulence levels suggests (based on Ansoff) the corresponding strategic orientation and organizational responsiveness. However. and therefore. On the other hand. rapidity of change. and the intended messages. Ansoff’s premise has maintained that given the environmental conditions. is the capability of top management to have an acute knowledge of the complexity of an organization’s environment. Therefore. the overriding theme in the strategy debate is the whether the “planning” or “learning” approach is more effective. the firm must establish the appropriate strategic aggressiveness and managerial responsiveness. Summary Table IV summarizing the various schools of thought that represent the main stream in “strategic thinking”. based on the intensity of the external setting and whether the firm has the corresponding managerial capability and strategic orientation. Configuration school Lastly. Ansoff’s connection The strategic diagnosis is precisely a tool that allows firms to configure their strategy based on their specific external demands (stable to highly turbulent). Tables I-III clearly indicate the options for firms not only to configure their strategy but also to develop an optimal posture. Miles and Snow. For example. Ansoff’s approach is about configuring continuously. perhaps. novelty of the challenges. this is consistent with Ansoff’s work. changes are incremental. the positioning school explores the changes within an industry. a different configuration. 1962.

1974).Unpredictable.. he spent his last 30-35 years refining his basic premise as it was developed in 1965 with concepts such as the diagnostic procedure (Ansoff et al. a much wider range of schools of thought in strategy. Discussion Table IV is an indication of Ansoff’s comprehensive approach to strategy accommodating. however. In his book Corporate Strategy (1965). Ansoff et al. (2003). The limitations of pages are restricting this paper to write only selective contributions of Ansoff. and possess minimal or no time available. strategic myopia (1984). and real-time response (Ansoff and McDonnell. A similar argument could be made for the cognitive and power school of thought. then there is no time for the company to “learn” or engage in lengthy political posturing and then engage in effective change. 1999) Source: Mintzberg et al. His holistic approach to strategy can only be characterized by ubiquity. controllable Power (macro) Positioning Planning Rational Internal process as … Design Entrepreneurial Natural Figure 1. the time factor will determine the degree of unpredictability and confusion (according to Mintzberg and Lampel) and establish the required response. Upper Saddle River. confusing JMH 17.J the external world is unpredictable and confusing. while levels 4-5 are characterized as fast paced. then the learning school is an appropriate approach.. unpredictable environments require a corresponding managerial aggressiveness and capability (Table II). Ansoff developed the prescriptions. potentially. 1978). Inc.. his later work and book on Implanting Strategic Management (1990) was instrumental in providing organizations research-based methods to achieve the needed change. Hence. N. applied theory of strategic behavior (1979). However. Printed and electronically reproduced by permission of Pearson Education. organizational capability (Ansoff. Figure 2 shows an alternative approach when considering that levels 1-3 are incremental and with the implication that there is time to change. Again. however. . 1990. when the environment is fast changing (function of t). 1980) are among the plethora of tools to facilitate strategy. Strategy formation as many processes (from Mintzberg and Lampel.1 External world as… Environmental Cognitive Learning Power (micro) Cultural Configuration 118 Comprehensible. unpredictable.

unpublished empirical results in banking predicted which banks were underperforming because of the gaps between environmental demands and internal capability and strategic aggressiveness. It is a fairly large puzzle and any attempt to provide an assessment of the holistic picture of strategic transformation without all the pieces is simply an incomplete attempt and unjust to Ansoff’s approach and work. 1989). operational. His last major contribution was his 1990 book where he not only provided the intellectual area but also unpublished empirical results point to a more holistic and comprehensive work. different success behaviours are required at different levels of turbulence.Ansoff revisited Discontinuous Environmental Entrepreneurial Configuration Cognitive Environmental Entrepreneurial Configuration Cognitive External world as… 119 Environmental Configuration Learning Power Cultural Positioning Planning Levels 1-3 Stable Internal process as … Incremental Environmental Entrepreneurial Configuration Cognitive Levels 4-5 Creative Figure 2. There is no universal prescription for success (Ansoff and Sullivan. Undeniably. Future research should continue on utilizing the strategic diagnosis not only to further validation but also as a tool that facilitates the development of an optimal strategic posture for future profitability. hence. his approach to strategy from a holistic point of view and the multiple tools provide a contingency approach to strategic solutions for everyone. His contributions to the field of strategy provide the intellectual domain for many strategy thinkers to follow and espouse some of his basic premises to create not only an academic discipline but a critical function in the corporate setting. Lastly. those banks were forced to merge or close down (Lewis. Moreover. organizations today have incorporated his original thinking of strategic. For example. Ansoff’s lack of any desire to popularize his writings and provide a foundation to invite researchers and a wider body of the academia to engage his thinking pushed his writings on the periphery of core research agenda. In addition. Nevertheless. and administrative work. research on managerial perception of environmental turbulence as a guiding post for strategic orientation will shed light . b). when studying Ansoff’s work. it is evident after a while that it is a giant puzzle that requires assembly to see the entire picture and how all the pieces work together. Strategy formation as many processes (Ansoff interface) The Economist (2008) praises Ansoff as one of the management gurus in a historical series of strategic experts from Sun Tze and Machiavelli to the modern era. 1993a.

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