Strategy Processes:

How is Strategy formed?

Intended, Deliberate to
Realised Strategy

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© DR ADRIAN KUAH 2008
INTENDED, DELIBERATE
TO
REALISED STRATEGY
Intended strategy is strategy as conceived of by the
top management team. The intended strategy is the
result of a process of negotiation, bargaining, and
compromise, involving many individuals and groups
within the organization.
Deliberate strategies provide the organization with a
sense of purposeful direction.
Finally, Realized strategy is a blend of intentions and
emergence which can be interpreted by reference to
the strength of pressure from the external
environment—a kind of environmental determinism.
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EVOLUTION OF
STRATEGIC
MANAGEMENT
1970s 1980s 1990s
Dominant Corporate Corporate Quest for
planning strategy competitive
theme Market led Market led advantage
Resource led

Main Forecasting Analysis of Resource analysis

Investment industry and Competence
techniques appraisal competitors analysis
Cost cutting

Outcomes Corporate plan Acquisition and Corporate

divestment restructuring.
Business Building capabilities
process and innovation
engineering

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STRATEGY PROCESSES:
SCHOOLS OF THOUGHT
Prescriptive Schools
- Analyses how strategy should be formed
Descriptive Schools
- Really, how strategies are ‘really’ formed
Configuration School
- Integrative, combination of schools

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 Strategy Formulation:
10 Schools of Thoughts

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THE STRATEGY
ELEPHANT

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THE DESIGN
SCHOOL

A deliberate process of conscious thought by senior

management/ SP analysts.
To achieve an essential fit between the internal
environment and external forces.
Oldest School since the early 1960s
Alfred Chandler (1962) Strategy and Structure

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THE PLANNING SCHOOL

Grew almost in parallel with the Design School, predominated in the

1970s but faltered in the 1980s.
Significant difference: the strategy formulation process is not celebral
but formal and can be decomposible into distinct steps, delineated by
checklists
Planners replace senior managers
Igor Ansoff (1965) Corporate Strategy
Management Science

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 THE POSITIONING
SCHOOL
Dominant view in the 1980s, all preceded to
military positioning (Sun Tzu 500BC)
Strategy reduces to generic positioning
selected through formalised analysis of
industry situation.
Planners become analysts
Michael Porter (1980) Competitive Strategy
Economics

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THE ENTREPRENEUR
SCHOOL
Centred on the intuition of senior decision
makers (like informal design school and in
contrast to planning school)
Strategies shift from precise plans, designs, or
positions….to visions and perspectives.

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THE COGNITIVE SCHOOL
Strategies can be developed as frames, models or
maps…and adopting a subjective and
interpretative view of its process.
Cognition is used to construct strategies as
creative interpretation.
There was interest by academics in the origins of
these strategies.
Psychology

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THE LEARNING SCHOOL
Relates to incrementalism or emerging strategy.
Formulation and implementation processes
intertwine and therefore challenges the planning
premise, and breakdown the argument of the
Planning School.

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THE POWER SCHOOL
Strategy making process is rooted in fragment self
interest of certain individuals
2 types of power:
Micro power: a process involving bargaining,
persuasion and confrontation internally
Macro power: how an organisation uses it power over
others in JV..etc
Politics

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THE CULTURAL SCHOOL
Opposite to Power School
Focus on common interest and integration
Strategy formulation is a social process, only
possible with strong unifying culture.
However, strong culture may have a fallacy in
group think and discouraging significant strategic
change.

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THE ENVIRONMENTAL
SCHOOL
How organisation properly plan to react to
contingencies.
Organisation uses their degree(s) of freedom to
create strategy
Simplistic: Contingency Planning
Multiple: Scenario Planning
Sociology and Biology

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THE CONFIGURATION
SCHOOL
Organisation can be described as stable at a given
point in time, with particular configuration or
structure
From time to time undergoes a process of
transformation to other schools….each its own time
and context.
So sometimes a political organisation due to
conflicts, sometimes a missionary organisation,
sometimes a machinistic organisation and sometimes
a entrepreneur organisation!
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 STRATEGIC
PROCESSES
Mintzberg’s Strategy Safari (1998) consolidated ten
facets of strategic management.

Prescriptive
 The Design School - a process of conception;
 The Planning School - a formal process;
 The Positioning School - an analytical process (econ);
 The Entrepreneurial School - a visionary process;

Descriptive
 The Cognitive School - a mental process (psy);
 The Learning School - an emergent process;
 The Power School - a process of negotiation (polit);
 The Cultural School - a collective process;
 The Environmental School - a reactive process (bio, polit socio);
 The Configuration School - a transformation process (his).

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