Strategy Development Processes

Strategy in Action

Strategy development processes

Learning outcomes

• What is meant by intended and emergent strategy development

• Identify intended processes of strategy development ,including the role of vision and command ,planning systems imposed strategy

• Identify emergent processes such as logical incremental, resource allocation processes, cultural processes and organisational politics

Learning outcomes

• Consider how different forms of strategy development may be found in multiple forms and in different context

• Explain some of the issues managers face in strategy development including development in uncertain and complex conditions

Intended Strategy Development

• Careful deliberation by top management

Through strategic leadershipThrough strategic planning systemsExternally imposed strategy

• Design view of strategy development

Intended Strategy Development

• Strategy development through leadership:

• The vision and command• Persons who are seen as central to strategy

Leaders and their company

• Charles Dunstone @ Carphonewarehouse

• Rupert Murdoch @ NewsCorp

• Steve Jobs @ Apple

• Michael O Leary @ Ryanair

How leaders build strategy

• Strategy by design : used analytical tools to address issues the organisation faces

• Strategy by vision: linked with an overall vision and helps create beliefs systems

• Strategy by command: dictated by an individual ,often an owner

Strategic planning systems


• Initial planning stage • Business level planning • Corporate level planning • Financial and strategic targets

• From research by Rob Grant into the oil industry 2003


• Some companies plan may be more formal than others:

• Planning systems may help: • Structure analysis for complex problems

• Encourage questioning and challenging behaviour


• Encourage the long term view


• Enhance coordination of business level strategies within overall corporate strategy

• Converting an intended strategy in an organisational action by ;

• Communicating out • Providing agreed objectives and milestones to review progress


• Coordinating resources required to put strategy into effect

• Involving people may help create ownership and buy in

• Provide security and a sense of control over future of the company


• Criticisms of and dangers of formal planning systems.

• Confusing strategy with the plan • Detachment from reality (planning becomes an intellectual exercise removed from day to day operations)

• Information overload with little clarity about the importance of that information


• Lack of ownership :plans designed and kept in a drawer ,not fully understood

• Dampening of innovation : rigid systems with control can result in stifling of ideas


• Some conclusions on strategic planning systems :

• Evidence uncertain as to the benefits of formal strategic planning systems

• Benefits based on type of organisation and the context in which they operate

• Shift towards project based teams and greater flexibility

Externally imposed strategy

• Some strategies can be imposed by powerful external stakeholders

• Governments can change rules of business

• These can be seen as intended strategies

Henry Mintzberg

• http://www.youtube.com/watch?v=_NRWtd_SiU8

http://www.youtube.com/watch?v=_NRWtd_SiU8



Emergent strategy development

Decisions on : Evolving strategic direction

Acquisition Based on past experience

Divestment Moves informed by a developing pattern

Overseas expansion Patterns of decision making based on where we have come from rather than where are we going

Emergent strategy development

• Organisational processes which may account for an emergent strategy development

Logical instrumentalismResource allocation process (RAP)Organisational politicsCultural processes

Logical incrementalism

• Study by James Quinn into major multinational businesses described strategy development as logical incrementalism

• It is the deliberate development of strategy by experimentation and learning from partial commitments rather than by global formal strategies


Reasons why this may be valid includeEnvironmental uncertainty :Managers cannot rely on historical data and must scan constantly Generalised views of strategy: Managers have a rough view of where they are going and therefore develop it over time. Objectives may be general in nature


• Experimentation : can emerge in a number of parts of an organisation such as subcultures such as in product development ,positioning external relations

• Coordinating emergent strategies :Managers may draw together formal and informal processes to create statements of strategy for the benefit of stakeholders


• Quinn argues that logical incrementalism may be emergent by is still purposeful and proactive

• They bridge intended and emergence strategies as they are deliberate yet draw from the social and the subculture of organisations

• There is a continual and gradual

Resource allocation processes

• “The resource allocation processes explanation of strategy development is that realised strategies emerge as a result of the way resources are allocated in an organisation”

• Bower-Burgelman • Strategy is better explained by the outcome of problems being addressed

Resource allocation processes

• Negotiations across organisational levels : choice on solving problems may lie at all levels of an organisation

• Influence of RAP : what criteria are used when looking at problems ,new ventures and issues.

• Are solutions in line with RAP

Organisational politics

• Negotiations illustrate the importance of politics within organisations

• This view is that strategies emerge as a result of bargaining and negotiations among groups

• JR and Bobby ?

Organisational politics

• People can be influenced byPersonal experience Competition for resourcesInfluence of various stakeholdersDifferent access to information• Emergent strategy is likely, as process are put in place as bargaining continues

Cultural processes

• A Cultural explanation of strategy development is that it occurs as the result values and behaviours in organisations

• The taken for granted nature of culture works to guide how people view the organisation and in turn develop decision making

Patterns of strategy development

• Within strategy development there are multiple processes which may all be at work inside organisations

• No one is the right way• Contextual influences: development differs over time and place

Challenges for Managers

Challenges for Managers S-D

Managing intended and realised strategies

The learning organisationStrategy development in uncertain and complex situations

Problems include an intended strategy has been described yet not followed in practice Realised and unrealised


• Implications for strategists include:• Awareness :are the intended and realised strategies different

• The role of strategic planning: planning may not form strategies as much as coordinate what emerges in organisations, a form of cut and paste


• The challenge of strategic drift: • Incremental development can lead to drift and could see inertia as a result

• Stems often from a culture or values

• Challenging the norm and developing a learning organisation may help to develop competitive advantage


• Managing emergent strategy is the role of key personnel and is rooted in routines and culture

• Here is the management role of creating a clear vision directing future strategy

The learning organisation

• Traditional organisation have been seen as stable structures set up to achieve order and control

• Built for stability rather that change.

• A learning organisation one capable of continual regeneration from the knowledge, skills and experience of individuals in that organisation


• Collective knowledge of those in an organisation exceeds that of the organisation itself

• Formal structures can stifle creativity

• Role of managers here is to facilitate

• Organisations seen as social networks


• Keys tenets of organisational learning:

• Managers facilitate rather than direct

• Information flows• Relationships are lateral as well as vertical

• Organisations are pluralist, conflicts are allowed

• Expermentation is the norm


• Gary Hamel


• Resilient organisations continually reinvent themselves , don’t take things for granted and are always looking to image new business models


• http://www.youtube.com/watch?v=3yfqGIDZIJw

http://www.youtube.com/watch?v=3yfqGIDZIJw




S.D in uncertain and complex situations

• Simple and static conditions • Dynamic conditions : uncertainty increases

• Complex situations : face an environment that is difficult to understand

Strategy Development Processes

Documents