Chapter 14: Strategy development process

Question 1

What are the two views of how strategies develop?

Answer 1

Two views: strategy as deliberate or emergent.

Question 2

What is strategy as a deliberate?

Answer 2

Deliberate strategy involves intentional formulation or planning.

Consists of the parts:
Strategic leadership
Strategic planning
Externally imposed strategies

Question 3

What is strategic leadership (deliberate)?

Answer 3

Strategic leader

• a strategic leader is someone or a team of people whose personalities, positions or reputations make them central to the strategy development process. Research has shown that Founder CEOs compared to other CEOs typically make different contributions to strategic success in terms of market expansion. They have spent more time learning. Strategy in this view may be seen to be the deliberate intention of a strategic leader. This manifests in different ways
  
  • Strategic leadership as command; when its dictated by an individual. Benefits is that it can mean speed of strategy adaption and sharp, innovative strategies that are difficult for other companies to imitate. Downside: excessive risk taking or irrelevant strategies.
  • Strategic leadership as vision: a strategic leader determines or is associated with an overall vision, mission or strategic intent that motivates others, helps create shared beliefs within which people can work together effectively and guides the more detailed strategy developed by others in an organization. Ex Ingvar Kamprad and his vision to create a better life for the many people has motivated and guided generations of IKEA employees.
  • Strategic leadership as decision making: a leader who weighs different alternatives and has the confidence to take timely decisions ti get other to buy into those decisions.
  • Strategic leadership as the embodiment of strategy: A founder or CEO may represent its strategy. May be unintentional.

Question 4

What is strategic planning? (deliberate)?

Answer 4

Strategic planning is a second way of how deliberate (intended) strategies can develop. Strategic planning is a systematic analysis and exploration to develop an organisations strategy.

There are 4 stages in the planning cycle:
1. Initial guidelines
2. Business-level planning
3. Corporate-level planning
4. Financial and strategic targets

Strategic planning may have several roles. 4 are emphasised:
1. formulating strategy
2. learning
3. integration
4. communicating

Question 5

Strategic planning may play several roles, four are emphasised. Which?

Answer 5

1. Formulating strategy
by providing means by which managers can understand strategic issues, like competitive positions and distinctive capabilities. Formulation is beneficial since its establishes an overall purpose.

2. Learning
Managers can benefit from planning if its seen as a means of learning rather than a means of ‘getting the right answers’.

3. Integration
Strategic planning systems may have the purpose of coordinating business-level strategies within an overall corporate strategy.

4. Communicating
Communicating the intended strategy provides clarity on the purpose and objectives of a strategy against which performance and progress can be reviewed.

Question 6

What are the roles (pros) of strategic planning systems?

Answer 6

1. formulating strategy
2. learning
3. integration
4. communication

Question 7

What are the five dangers of strategic planning systems? (Henry Mintzberg)

Answer 7

1. Confusing planning with managing strategy

2. Detachment from reality
The managers responsible for the implememtation of strategies may be so busy that they cede responsibility to specialists or consultants, which can cause a detachment.

3. Over-complex planning processes
Bureacracy

4. Dampening of innovation
Highly formalized systems of planning can contribute to an inflexible and hierarchical organisation

Question 8

What is externally imposed strategy? (deliberate)?

Answer 8

The third piece of the deliberate strategy.

Strategy may be imposed by powerful external stakeholders. Ex: Government can determine strategy in public sector organizations.

Business units may have their strategy imposed by head office

Activist investors and venture capital firms may impose strategy on companies they buy into

Question 9

What is an emergent strategy?

Answer 9

strategies do not develop on the basis of a grand plan, but tend to emerge in organisations over time experience and variety lenses relates to this view

exists of the parts:
1. logical incrementalism
2. political processes
3. organizational structures and systems

Question 10

What is logical incrementalism? (emergent) (James Quinn)

Answer 10

Coined by James Quinn. The development of strategy by experimentation and learning rather than through global formulations of total strategies. Logical incrementalism bridges deliberate and emergent processes as it explains how management may deliberately cultivate a bottom-up, experimental basis for strategies to emerge.

Logical incrementalism is an approach to strategy development where change happens gradually through small, intentional steps rather than drastic, sweeping changes. It falls under emergent strategy because instead of following a rigid plan, managers adjust their strategy based on changing circumstances and insights gained along the way.

Logical incrementalism involves a blend of planning and adaptability, making it useful for dynamic environments where change is constant.

Question 11

Which are the three main characteristics of logical incrementalism? (emergent strategy)

Answer 11

There are three main characteristics of logical incrementalism:

1. Environmental uncertainty (constant environment scanning and change)
2. General goals (avoiding too early commitment to specific goals as it might prevent innovation and experimentation)
3. Experimentation (building a strong but flexible core business

Question 12

How does logical incrementalism connect to the ‘learning organisation’?

Answer 12

Logical incrementalism has a emphasis on learning, it is a view of strategy development which corresponds to the learning organisation term. That is, an organisation that is capable of continual regeneration from the variety of knowledge, experience and skills within a culture that encourages questioning and challenge.

Question 13

What does the supporters of learning organisations argue?

Answer 13

1. Formal systems stifle creativity
2. Top managers should faciliate rather than direct strategy, encouraging new ideas from below
3. Experimentation is the norm

Question 14

What is strategy as the outcome of political processes? (emergent)

Answer 14

A second explanation of how strategies can develop through an emergent strategy development. It is that they are the outcome of the bargaining and power politics that go on between executives or between coalitions within an organisation and its major stakeholders.

Question 15

What is strategy as the result of organisational structures and systems? (emergent)

Answer 15

A third view of how strategies may emerge is on the basis of an organisations structure and systems.

Prior strategic decisions may guide later strategies and culture may influence strategy.
Strategy can be seen as the outcome of managers, making sense of and dealing with problems and opportunities by applying established ways of doing things.
Strategy development can also be influenced by the systems and routines with which managers are familiar in their particular context.

Question 16

What are the implications for managing strategy development?

Answer 16

Multiple strategy development processes most organisations develop strategy through several different processes, having both emergent and deliberate influences.
– There is no one right way to develop strategy but the context can be important.

Question 17

Which contexts can strategy development occur in?

Answer 17

1. In simple and static conditions
2. In dynamic conditions
3. Complex situations

Question 18

What did Iveroth and Hallencreutz 2015 say about leading through sensemaking?

Answer 18

The two major views is the planned perspective (stems from the work of Kurt Lewin) and emergent perspective (bottom up).

But, Iveroth and Hallencreutz argue that if you examine change in practice you will notice that in most cases there are no planned change that is also no emergent. Often, both are included.

To be able to include both, leaders have to be receptive to the sensemaking at the front line where change managers are dealing with behavioral and organizational change