Strategy schools academic literature essay -

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Introduction

The ideas of various scholars who have addressed the issues of strategic management by

developing models or “Schools” of thought have been extensively researched and justified in

(Steven French 2009a), but all these schools have been developed in a Modernist/Functionalist

epistemology. The theory underlies the ideas of these Classical Schools of strategic thinking in

the business environment can be traced back to classical and neo-classical economic thinking,

which depends on the body of theory that is described by concepts of linearity, stability, and

predictability. These macroeconomic concepts fit within a microeconomic view of a firm as a

cybernetic system (Masuch, 1985; Morgan, 1986; Dixon et al., 2004) Classical and

contemporary schools are two out of the four of schools of strategic management. They are the

opposing schools based on the criteria of historical and future trends in strategic management.

The classical school of strategic management gathers premises of the founders of strategic

management as a scientific field. Although the premises are shaped about eighty years ago, they

represent the cornerstone of the field still valid today. The premises have been developed though

out the years and almost each of contemporary premises can be traced back to those years or is

formed as the opposing premise of the one dating in the past (Steven French 2009d). Let’s

discuss these schools of thoughts with relevance to critical analysis.

The Design School

“Look before you leap”

Strategy Systems as Processes of Conception

Among the schools of strategic thinking, this one explains all prescriptions in the field. The

design school suggests a very simple model that shows an essential fit between external threat

and opportunity and internal distinctive competence. Strategy formation is a premeditated course

of action of conception designed by the CEO, who decides the scale or guidelines of the

company, perhaps in terms of a mission vision statement company cultures and its core values,

The CEO look at the external environment with respect to company’s position and try to bring

maximum value to shareholders by using company strengths and available opportunities to take

corrective action against the company weakness and external threats. He sets objectives for

others to achieve and implement. The firm is a cybernetic system. However this is a theoretical

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concept, it is not essentially formalized, and the responsibility of management is to effectively

and efficiently plan. The model of strategy is not formalized so it is important that it remains

relatively simple. No theory of strategy creation is impending from the Design School. The

repercussion is that a “think-tank” approach to the directions given by the chief executive, will

articulate strategy. The base line for this school is architecture as a metaphor. It is more useful in

relatively stable environment. This model is to be kept simple and informal and hence the

strategies produced should be unique, simple and explicit (Richard A. Swanson et al. 2001).

Further, these strategies should be fully formulated before they are implemented. The chief

executive is the main strategist. The school suggests that strategy systems are processes of

conception. The strategies formulated are clear and unique. Thus the strategy of the organization

is designed to represent the best possible fit. It falls in Prescriptive school category.

The Planning School “A stitch in time saves nine”

Strategy Systems as Formal Processes

The philosophy of the Planning School emerged directly as an extension of the thoughts of the

Design School. The basic difference is the move away from simple, conceptual, informal plans

to more sophisticated, state of art, deliberate, highly formalized plans, developed by a team of

specialized planners whose job is to bring the scattered ideas in to refined course of action . The

“era” of the specialist strategic planner happened together with the market favoring the planning

model of strategy formulation (Steven French 2009b). Its main roots underlay in systems

thinking and cybernetics. The strategy is broken into set of steps, which comprises from the

analysis of the situation to the execution of strategy. These processes give clear direction and

enable firm resource allocation. Chief executive has the core responsibility for the complete

process and the execution responsibility rests with staff planners. Strategies are made explicit so

that they can be implemented through detailed attention to objectives, budgets, programs and

operating plans of various kinds. The base disciplines are some links to urban planning,

cybernetics and system theory. The strategy may become too static as the predicting is difficult. Top Grade Papers



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The Positioning School “Nothing but the facts, ma’am”

Strategy Systems as Analytical Processes

Advocator to the ideas of the Positioning School, also accept most of the building blocks of the

Design School and the Planning School but add two cautions of their own. First, more stress is

given to the importance of the strategic ideas, not just to the process & procedures by which they

are formulated, and, second, by focal pointing and focusing on the content of strategies, the

prescriptive side of the field is opened up to substantial investigation. Its roots lie in economics

and military history. The strategy systems focus on strategies that are generic, especially

common and identifiable. So the market is to be economic and competitive. (Steven French

2009c). It places the business within the context of industry and looks for the ways enterprise

can improve its strategic positioning within that industry. This school made Strategic

Management into a science, enabling future progress. In the early 1980s, with Modernist ideas of

the Planning School firmly deep-rooted, and “management” theorists generally influencing ideas,

business strategy was suddenly re-directed by the influence of Industrial Organization (IO)

economists

fettered to the equilibrium assumption. IO is a branch of economics that study the behavior of

firms within industry groups, upholding that a firm’s performance depends on the interactive

relationship between the number and distribution of firms in a market and the behavior they

exhibit (Shivasharan and Shashidhar, 2005). It focuses on hard economic facts and it is more

useful in early stage of strategy development. The strategy formation process places the business

within the context of the industry and finds out ways how organization can improve its

competitiveness in the industry. This school neglects power, politics, culture and social elements.

It is also a Prescriptive school.

The Entrepreneurial School

“Take us to your leader”

Strategy Systems as Visionary Processes



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According to this school, the strategy systems are semiconscious and are rooted in the experience

and intuition of the leader. Leader has being through such situation and he uses his intuition and

come up with new ideas. The strategy systems are processes existing mainly in the mind of

leader. Strategies are relating to a sense of long term direction mission, vision, culture and core

values of the organization (Steven French 2009b). The school focuses on the intrinsic and

inherent mental states and processes such as intuition, judgment, wisdom and experience

(Ahlstrand, B 1998). The leader is responsible to promote the vision on his own and also

responsible for maintaining control of implementation processes. So, entrepreneurial systems

tend to be both Deliberate and Emergent. A sound vision and a visionary leader can cohesively

sail organization through muddy waters when organization is going through its difficult years

(Mintzberg, Lampel, 1998). These strategies best work out where the companies are owned and

managed by a single individual. Entrepreneurial strategy systems are argued to tend to take the

form of niche strategy, one or more patches of a market position protected from the forces of

outright competition. But the question still exits how can you find the right leader with all the

needy qualities?

The Cognitive School

“I will see it when I believe it”

Strategy Systems as Mental Processes

Its main roots lye in psychology (cognitive) and strategy systems are prescribed to be cognitive

processes that come in strategist’s mind. Strategies emerge in the form of concepts, maps,

schemes and frames. These inputs flow through all sorts of distorting filters before they are

decoded by the cognitive maps (Chaffee, 1985). Its main focus is on how people perceive pattern

and process information. It purely focuses on what is happening in the mind of strategist and

how that happening is being processed. It stresses the creative side of the strategy process. This

is very useful to explain why our minds are imperfect (Mintzberg, H. 1990). As concepts,

strategies are difficult to attain in the first place, considerably less than optimal when actually

attained and subsequently difficult to change when no longer viable (Richard A. Swanson 2001).

In this regard various forms of cognition have an influence on how strategy systems are said to

function, such cognition as confusion, cognition as information processing, cognition as



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mapping, and cognition as concept attainment. This approach, based upon the science of brain

functioning, regards strategy formation as a mental process, and analyzes how people perceive

patterns and process information. It is not very practical beyond the conceptual stage and

currently not very useful to guide collective strategy process. School category is Descriptive.

The Learning School

“If at first you don’t succeed, try, try again”

Strategy Systems as Emergent Processes

Its main roots are also in psychology, strategy systems are processes of learning over time in

which formulation and implementation activities are intertwined and indistinguishable in nature.

Many firms have learnt and are now discovering that strategy is about redefining and re-shaping

the industry in which they will compete according to the environment. They suggest that a

strategy is as much a state of mind within an organization – a Post-modern concept – as it is a set

of actions in the market place – a Modernist concept. Product advantages are surprisingly

fleeting. Intellectual capital such as patent, copy writes are the eventual leverage point and it is

extremely difficult to imitate strategy analysis, irrespective of the tools, techniques and method

employed. Strategy must be focused upon understanding and challenging how managers think.

The intellectual ability of the managerial resources of a firm is the key to competitive advantage.

The environment of the enterprises is complex and of unpredictable nature (Steven French

2009b). As world does not allow strategies to be developed all at once hence, strategies emerge

in small steps throughout the journey of enterprise (Jelenc 2009). It offers solution to complexity

and unpredictability in strategy formation. It produces strong strategies in complex situations

with continuous change. The learner may be the collective system of the enterprise or leader

may be the main leader. This implies that there are many potential strategies in most enterprises

(Lampel, 1998). The learning is a process proceeding in emergent fashion, through behaviour

that stimulates thinking retrospectively, so that sense can be made of action. Thereby, the role of

leadership becomes not to preconceive deliberate strategies, but to manage the process of

strategic learning, from which novel strategies can emerge. The base discipline perhaps links to

learning theory in psychology and education; chaos theory. The champions to this school are

people inclined to experimentation, ambiguity and adaptability. This strategy is not useful at all



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in crises. Also there are costs associated with learning. You should not cross a chasm by taking

small steps. The school category is Descriptive.

The Power School

“Look out for number one”

Strategy Systems as Processes of Negotiation

Its roots are in politico-logy (the study of politics), and strategy systems are described to be

shaped by politics and power. Strategies formulated under this are tend to be emergent in nature

and takes the forms of positions and ploys. It can be divided into Micro Power and Macro Power

(Mintzberg, Lampel, 1998). In micro power, strategies are made through interplay, persuasion,

bargaining, direct confrontation and shifting coalitions. On other hand, Macro power sees the

enterprise as promoting its own welfare by making corporations with other enterprises. Strategies

are developed as a process of negotiation between power holders within the company and its

external stakeholders (Whittington, 1993). It can help the strongest people to survive in the

corporate jungle. It also ensures that all aspects of an issue are fully debated. It also can help to

reduce resistance after a decision is made. Its base line is political science. But it uses a lot of

energy, causes wastage and is costly. Further, more badly, it can lead to having no strategy or

just doing some tactical maneuvering (Steven French 2009e). It overstates the role of power in

strategy formation. The school category is Descriptive.

The Cultural School

“An apple never falls far from the tree”

Strategy Systems as Collective Processes

Its roots in anthropology describes the strategy systems as processes of social interaction, that

base on beliefs and understandings shared by members of enterprise (Henry Mintzberg 1990).

These beliefs are acquired by acculturation and socialization which are largely nonverbal. Hence

the members describe only those beliefs that underpin their culture; while the origin and

explanations may remain obscure (H. Igor Ansoff 1991). It views the strategy formation process

as a collective and cooperative process. The strategy formulated is a reflection of corporate



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culture of organization. Its emphasis is on crucial role that social processes beliefs and values are

playing in decision making and in strategy formation. The champions include the people who

like the social, the spiritual and the collective environment (Steven French 2009g). It has the

limitation of resistance to change and gives few clues on how things should unfold. The school

category is Descriptive.

The Environmental School “It all depends”

Strategy Systems as Reactive Processes

This school has its roots in biology, strategy systems are described to react in natural manner

with the corporate external environment. The external context is the central factor in strategy

making processes. The strategy formulated is a response to the challenges that were imposed by

external environment. If the enterprise does not respond to external forces, that enterprise will

not be selected out (Steiner, George Albert1979). In the long run, enterprises end up clustering

together in distinct ecological-type niches, positions where they remain until resources become

scarce or conditions too hostile (Mintzberg et al. 1998). The champions include population

ecologists, some organization theorists and positivists in general. In the long run, it gives the

central role in strategy formation to the environment. As the dimensions of the environment are

vague and aggregated, it becomes less useful for strategy formation. It is unrealistic that it denies

real strategic choice that an organization may have. The school category is Descriptive.

The Configuration School “To everything there is a season”

The base line of this school is History. This school underlay that strategy formation is a process

of changing organization from one type of decision making structure to another. It says that with

the time organization need to adopt the change and it has to move its direction towards the

competitive position (Steven French 2009b). It matches the organizational shape with strategy as

they are closely integrated. Organizations have some stable configurations in its characteristics,

which cause to create particular strategies (Kippenberger, T. 1998). But these stability periods



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are interrupted by some processes of transformation. So these strategies do not work for

organizations in long run (Lampel, 1998). Key to success in strategic management is to sustain

stability or adapting to strategic changes. Therefore, strategy formation itself has configurations.

The champions include lumbers and integrators in general and as well as change agents. In

reality organizations do not have a limited number of valid configurations; also patterns in the

eye of beholder are not limited. If reality is prescribes by using configuration, it will distort the

reality in order to explain it.

CONCLUSION:

In each of these schools, the strategy formation process is something like “black box”

because no one of these schools is able to outline that how an individual or organization will leap

from the collection of information to the conceptualization of alternative courses of action.

In the final analysis, just as none of the blind men's descriptions of the elephant was completely

adequate, yet each contained elements of truth, none of these 10 approaches is complete in and of

itself, either. Each offers some useful concepts, and some strong points to aid understanding, but

has its disadvantages or limitations as well, likely: as there is still room for more classifications

of strategy formation and the complexity of these schools, at a glance, may scare the strategist.

But at the same point it can’t be denied that these approaches have also helped the strategists in

like Illumination of origins and characteristics of the different schools of thoughts in strategy

formation and understanding and appreciating differences between strategy formations.



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Strategy schools academic literature essay -

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