Strategic Orientation

Strategic  It refers to a set of business units or firms that pursue similar strategies with
Group similar resources.
Strategic  It refers to the category of firms based on common strategic orientation and a
Type combination of structure, culture, and processes consistent with that strategy.

 Raymond Miles and Charles Snow stated that managers must set strategies congruent
with the external environment, where there must be a fit among internal organization
characteristics, strategy, and the external environment. They classified companies into the
following 4 types:
 Companies with fairly broad product lines, focus on product innovation and market
opportunities.
Prospector  Its strategy involves innovation and creativity, taking risks, seeking out new
opportunities and growth, learning orientation, decentralized structure, flexibility, and
strong capability in research.
 Companies which try to minimize risks, where they operate in at least 2 different
product-market areas, one stable and one variable.
 Its strategy lies between the prospector and defender by efficiently (1)maintaining a
Analyzer stable business for current product lines, while at the same time (2)innovating to develop
new product lines.
 It balances efficiency and learning, tight cost control with flexibility and adaptability.
 It emphasizes creativity, research and risk-taking.
 Companies which prefer to minimize risks by having stable working conditions in a
relatively predictable environment conditions. They have a limited product line, focus on
improving efficiency of the current operations. (They don’t innovate).
Defender  Its strategy involves retrenchment, beyond just stability, by seeking to keep current
customers without innovation or growth.
 It is characterized by efficiency orientation, centralized authority, tight cost control,
low overhead, close supervision and little employee empowerment.
 Companies that lack a consistent strategy-structure-culture relationship.
 Its approach is to respond in an ad-hoc manner to the environmental threats and
Reactor opportunities without a long-range plan.
 It has no clear organizational approach, where its design characteristics may shift
anytime depending on the current needs.