Strategic Management

Prof Bharat Nadkarni

Mintzberg's 5 Ps for Strategy
Mintzberg's 5 Ps for Strategy
The word "strategy" has been used implicitly in different ways
even if it has traditionally been defined in only one. Explicit
recognition of multiple definitions can help people to
manoeuvre through this difficult field. Mintzberg provides five
definitions of strategy:
1.Plan

2.Ploy

3.Pattern

4.Position

5.Perspective.
1. Plan
Strategy is a plan - some sort of consciously intended course
of action, a guideline (or set of guidelines) to deal with a
situation. By this definition strategies have two essential
characteristics: they are made in advance of the actions to
which they apply, and they are developed consciously and
purposefully.

2. Ploy
As plan, a strategy can be a ploy too, really just a specific
manoeuvre intended to outwit an opponent or competitor.
 
3. Pattern
If strategies can be intended (whether as general plans or
specific ploys), they can also be realised. In other words,
defining strategy as plan is not sufficient; we also need a
definition that encompasses the resulting behaviour: Strategy
is a pattern - specifically, a pattern in a stream of actions.
Strategy is consistency in behaviour, whether or not intended.
The definitions of strategy as plan and pattern can be quite
independent of one another: plans may go unrealised, while
patterns may appear without preconception.
Plans are intended strategy, whereas patterns are realised
strategy; from this we can distinguish deliberate strategies,
where intentions that existed previously were realised, and
emergent strategies where patterns developed in the
absence of intentions, or despite them.
 4. Position
Strategy is a position - specifically a means of locating an
organisation in an "environment". By this definition strategy
becomes the mediating force, or "match", between
organisation and environment, that is, between the internal and
the external context.
5. Perspective
Strategy is a perspective - its content consisting not just of a
chosen position, but of an ingrained way of perceiving the
world. Strategy in this respect is to the organisation what
personality is to the individual. What is of key importance is
that strategy is a perspective shared by members of an
organisation, through their intentions and / or by their actions.
In effect, when we talk of strategy in this context, we are
entering the realm of the collective mind - individuals united by
common thinking and / or behaviour.
McKinsey’s 7 S Model
1. Strategy

2. Structure

3. System

4. Staff

5. Style

6. Skills

7. Shared Goals
The model can be applied to many situations and is valuable
tool when organisational design is at question. The most
common uses of the framework are:

• To facilitate organisational change

• To help implement new strategy

• To identify how each area may change in a future

• To facilitate merger of organisations

 McKinsey 7SFramework

McKinsey 7SFramework was developed in 1980s by

McKinsey consultants Tom Peters, Robert Waterman and
Julien Philips with help from Richard Pascale and Tony
Athos. Since the introduction, the model has been widely
used by academics and practitioners and remains one of the
most popular strategic planning tools. It sought to present and
emphasis on human resources, soft skills, rather than the
traditional mass production tangibles of capital, infrastructure
and equipment, as a key to higher organisational
performance.
Three factors: Strategy, Structure and System are known as
hard skills.
a. Strategy reflects the planned action of a firm for
responding and adopting to the external competitive
forces.
b. Structure represent co-ordination mechanisms of the firm
that encompasses the division of tasks and labour,
hierarchy and reporting relationships and accountability.
c. Systems are the mechanisms within the organisation
used to manage the organisation processes and
procedure so as to implement strategy.

The other four factors are called the soft skills. They are
d. Staff includes the individuals which work for the firm with
their backgrounds, experience and abilities.
e. Skill explains the collective competency of the
organisation. That is, the organisations capabilities to
manage systems, processes technology and consumers.
f. Style represents culture of the firms and this includes
assumptions, values and normative behaviours.
g. Shared values is the centre point of the model and thus
directs the energy of the organisation, given sense of
purpose and includes super ordinate goals of the firm.
 Strategic Management

Characteristics of Open System

1. Environment Awareness.
2. Feedback.
3. Cyclical Character – Money to Money.
4. Negative entropy.
5. Movement toward growth and expansion.
6. Balance of maintenance and adaptive activities.
7. Steady state.
8. Equifinality.
Managing Organizational Culture

Prof Bharat Nadkarni

 Organizational Theories and Structure Designs. Prof B M Nadkarni
Needs of Environment – X axis
Strategic focus - Y axis
Flexibility – Stability –X axis
Internal – External – Y axis

1. Adaptability Culture – Flexi – External

2. Mission Culture - Stability – External
3. Clan Culture – Flexi – internal
4. Bureaucratic Culture – Stability - internal
 TYPES OF CULTURES

• CLAN CULTURE(Flexibility, Freedom, Ownership)

• BUREAUCRATIC (Rules, Policies, SOP’s)

• ADAPTABILITY (Entrepreneurial)

• MISSION (Market share, Profits, Competitive)

 Organizational Theories and Structure Designs. Prof B M Nadkarni

Ten key cultural characteristics

• Individual initiative. The degree of responsibility,
freedom, and independence that individuals have.
• Risk tolerance. The degree to which employees are
encouraged to be aggressive, innovative, and risk-
seeking.
• Direction. The degree to which the organization creates
clear objectives and performance expectations.
• Integration. The degree to which units within the
organization are encouraged to operate in a co-ordinated
manner.
• Management support. The degree to which managers
provide clear communication, assistance, and support to
their subordinates.
 Organizational Theories and Structure Designs. Prof B M Nadkarni

6. Control. The number of rules and regulations, and the

amount of direct supervision that are used to oversee and
control employee behaviour.
7. Identity. The degree to which members identify with the
organization as a whole rather than with their particular
work group or field of professional expertise.
8. Reward system. The degree to which reward allocations
(i.e., salary increases, promotions) are based on employee
performance criteria in contrast to seniority, favoritism, and
so on.
9. Conflict tolerance. The degree to which employees are
encouraged to air conflicts and criticism openly.
10. Communication patterns. The degree to which
organizational communications are restricted to the formal
hierarchy of authority.
Red, Blue and Purple Ocean Concept
Red Ocean
•Compete in existing market place, overcrowded and with
limited growth shared by all.
•Beat the competition on quality and cost – two dimensional
•Exploit existing demand
•Align the whole system to make value – cost trade off

Blue Ocean
•Create uncontested market place
•Make the competition irrelevant
•Create and capture new demand
•Break the value-cost trade off / Core Competency
•Create complete paradigm shift
•Align firm’s activities in pursuit of Innovation.
Purple Ocean
•Compete in existing market but stand out in a clutter

•Differentiate from the competition / Create a Switching cost

•Exploit customer base to drive loyalty

•Break the traditional mindset & add more value

•Align the whole system of a company in pursuit of

differentiation through value added
SPACE : Strategic Position and Action Evaluation Matrix
•Financial Strength : internal

•Competitive Advantage : internal

•Industry Strength : External

•Environmental Stability : External

Action Points
Aggression
Competitive
Conservative
Defensive
Thank you