A Guide To Mastering Management Strategy: An Overview Of 10 Schools Of Thought
Taking a journey through all the approaches to managing strategy is essential for anyone who wants to understand the complexities of strategic management.
With Strategy Safari you’ll get an in-depth look at all of the schools of thought that influence people’s decision making – from Sun Tzu’s The Art of War, to best strategies for startups, and even which approaches combine all strategies.
This book contains everything you need to know in order to gain an understanding of these multiple perspectives on managing strategies.
It takes you on a crash course exploring each school and its distinct approach so you can have a comprehensive overview of this topic.
You’ll learn how stability and change are handled, as well as various patterns, perspectives and positions that make up these schools’ theories.
Strategy Safari puts it all together so that you can form a better idea about the various ways to manage strategy efficiently and create more success in your life.
The Design School: A Powerful Strategic Management Tool With Potential Pitfalls
The design school is the first and oldest management school of strategic thinking.
It understands strategy as a process of coming up with ideas, an inherently creative exercise.
This process is laid out clearly in the well-known SWOT model: Strengths, Weaknesses, Opportunities and Threats.
By critically evaluating your organization’s strengths and weaknesses in context of the opportunities and threats present in the external environment, you can easily gain a good understanding of your organization’s situation, without having to acquire extra assets.
Moreover, this way of thinking takes into account dynamics such as social responsibility and values management – meaning strategies are tailored to each case individually.
However, this approach is not without its faults; design school can be overly rigid or idealistic and fail to see potential real-world problems that could arise when actually implementing their theory.
To cite an example: U.S military strategy during the Vietnam War was formulated from afar but failed to take into account local conditions – leading to serious consequences.
The Planning School: A Prescriptive Approach To Strategic Thinking
The planning school of strategy is ideal for evaluating current circumstances and crafting suitable goals depending on them.
It is a prescriptive type of strategy, comprised of several neat steps that begin with analyzing the situation and the associated SWOT-model, before going on to formulating the actual strategy plan.
Whereas the design school takes into account the entire strategy, from start to end, the planning school focuses more on institutionalizing innovation.
In order to get started, you will need firstly to conduct a thorough analysis of your particular situation.
Otherwise one could not proceed with creating a consistent and effective strategy plan that meets all set goals and objectives.
This usually involves system theory, urban planning as well as socialistic models.
Nonetheless, while it provides direction in terms of how everyone involved can proceed with enacting the plan, this strategy sometimes fails to lead in the right direction since forecasts are oftentimes wrong given they are based on predictions about future circumstances which might change over time or remain uncertain.
Additionally, such plans require lots of data gathering, synthesis and analyses and this naturally adds up to extra time spent without offering any guarantee of success afterwards.
Descriptive Schools Can Bring Clarity To Strategy Development But Analysis Is Still Needed
The last prescriptive school that we’re going to talk about is the positioning school of strategy formation.
According to this school, strategy formation is an analytical process – a way for people to enter a series of clear decisions and come away with the best solution for the problem at hand.
This process isn’t new, either.
In fact, you can go all the way back in history and find military strategists from centuries ago who followed a similar process when preparing for battle.
The positioning school puts an emphasis on analysis as a part of their strategy formation – analyzing data and coming up with solutions based on it.
However, these analyses don’t actually produce strategies necessarily – they just provide guidance.
That’s why it can be helpful to combine it with another kind of school – like a descriptive school – which brings things closer to reality and accounts for other factors (like people) that play a role in creating effective strategies.
The Entrepreneurial School: Unlocking Flexible Strategies Through Visionary Leadership
The entrepreneurial school of strategy formation relies heavily on the vision of its leaders.
Rather than relying on collective work, it focuses on the personal role of a single leader to guide an organization and show the way to success.
Leaders use their emotional resources such as inspiration, judgement, experience and insight to formulate strategies for the future.
This requires looking into the past as a precedent in order to create something more flexible and dynamic.
Although there are obvious limitations with relying on a single leader, this school still brings important insights that can aid even established companies needing an innovative trend.
The focus moves away from tangible physical resources, instead emphasizing emotional resources that may otherwise be neglected.
However, overanalyzing new developments runs the risk of missing out on unexpected ones.
That said, when done properly, following this school can be hugely beneficial for start-ups and existing businesses alike.
The Cognitive School: Bridging The Objective And Subjective To Unlock A Manager’S Strategy Potential
The cognitive school of strategy emphasizes the process of actually formulating strategies.
It doesn’t just tell us who develops these strategies, but rather how they are thought out and put into action.
This school is about the mental processes that managers take when creating strategies – gathering information, organizing it, interpreting situations and mapping out ideas in their heads.
These maps and interpretations are important for creating successful strategies.
The cognitive school divides itself between those who believe mental processes to be more objective or subjective in nature.
Ultimately, though, both sides agree that voluntary mental processes play a role in strategy formation.
By connecting the prescriptive schools which essentially analyze an organization from afar with more personal schools like the entrepreneurial school, which takes credit for one single individual’s ideas and vision, one can truly say that the cognitive school is essential in strategy-making.
Even still, this school carries limits – it narrows its focus on certain types of strategies while ignoring the bigger picture which emerges as a result.
Similarly to how we are able to locate ‘the big dipper’ by excluding some stars from our visual scope; so too do managers use filtering mechanisms when organizing their own thought process, yet leaving out significant reasons why they think a certain way in the first place.
Despite all its caveats, the potential of this discipline appears promising given what it could contribute to strategy formation.
The Learning School: A Useful Concept For Developing Strategies In An Ever-Changing World
The learning school stresses that strategy formation and implementation should not be viewed as separate elements, but rather as a continuous process.
This means that there can be and should be contributions to strategy from all levels of the organization — not just those at the top.
In this way, great ideas can come from anywhere within the organization, and then be authorized by management for further development.
This decentralized approach has been successfully implemented in industries like the tobacco industry, which responded to governmental restrictions by diversifying their portfolio to include products like e-cigarettes and branching out into unrelated markets.
The learning school also highlights the importance of learning in order to keep strategies up-to-date – mistakes made during planning and execution can lead to improved strategies.
However, this is not without risks, as too much emphasis may be placed on optimization and learning rather than actual implementation — something which is costly when experiments don’t yield good results.
At times of crisis when quick solutions are needed, the learning school is ill-equipped since it requires time consuming testing before new ideas can be put into practice.
Overall, the learning school stresses that strategy should be seen as an ongoing process where ideas flow freely throughout all levels of the organization — enabling better, more creative solutions while avoiding pitfalls along the way.
The Power School: Negotiating Between Individuals, Groups And The Larger Environment
When it comes to strategy formation in an organization, the power school takes a holistic approach by seeing it as a process of negotiation.
This is because it looks at strategic decisions through both the lens of micro power (where individuals and groups in the organization influence decisions) and macro power (where an organization’s environment plays a role).
The idea behind this is that different people or organizations within the company may prefer different strategies, so finding a way to negotiate between them is essential.
This process can take different forms, like Darwinian competition or cooperation between groups.
A good example of this in action is how banks cooperate when managing shared ATMs.
On paper, this seems like a great way to ensure that strategies are implemented effectively.
But there are some drawbacks to this approach as well – if the focus on power becomes too extreme, it could divide an organization and lead to tactical adjustments instead of developing long-term strategy plans.
The Cultural School Of Strategic Thinking: Understanding The Influence Of Culture On Strategy Formation And Implementation
The cultural school of strategy matters because it recognizes the influence collective processes have on creating a company’s strategy.
It views strategy formation from all different parts of the business and acknowledges their contributions as part of an overall culture.
These individual parts can consist of values, social behavior, preferences, and everything in between.
It’s not just the executives that are important but also the employees whose ideas are utilized in the process.
This approach becomes particularly relevant when evaluating a large scale merger or acquisition.
When two companies come together, employees often have difficulty adapting to new processes and methods which may have been less formal at their old organization.
Furthermore, culture serves an important role when it comes to transformations over time such as reinventing products to fit a specific location like what happened with cars being redesigned for mass production in the United States rather than their original purpose as luxury products in Europe.
Unfortunately, there are certain drawbacks that go with this school such as creating vague strategies due to its seemingly abstract nature or implementing them can be difficult since people often reject changes even when it comes to their culture.
The Need To Balance Prescriptive And Descriptive Strategies In Management Decisions
The environmental school takes an expansive view when it comes to the formation of strategy.
Instead of focusing on a single element of strategy, such as culture or managerial vision, they take a step back and analyze the external environment surrounding the organization.
External forces have been identified by the environmental school as being an important factor when it comes to formulating a successful strategy.
Environmental concerns such as market stability, complexity, diversity and hostility play a major role in shaping the strategy that is created.
What’s more, this school does not consider choices or agency to be relevant for forming successful strategies.
Companies are seen by them to be mostly at the mercy of their respective environments and so strategies are formed simply by accommodating the circumstances around them.
Ultimately, true success relies on both prescriptive strategies (where plans determine action) and descriptive ones (where reaction determines action).
It won’t do for companies to focus solely on either one or the other; instead, a combination of both is needed for an effective management strategy.
Whatever choices these organizations make–environmental issues should always be taken into consideration.
The Configuration School: Balancing Change And Continuity To Create A Strategic Model
The Configuration School looks to combine the best aspects of all the different strategic management schools—namely, the prescriptive and descriptive schools.
This school sees strategy formation as a process of transformation from one strategic approach to another, with configurations representing the stages of a company’s development.
Unlike the other schools, configuration focuses not just on change but also on continuity.
When it invests time in promoting stability within an organization, this school knows how to appropriately handle changes as they arise.
The same can be said for transformation: when change does occur, this school is well-prepared for that eventuality as well.
At the same time, however, we must recognize that no model is perfect—including this one.
The Configuration School falls prey to oversimplification when it divides time into neat periods of change and continuity; rarely do these situations present themselves in real life where nothing changes or nothing stays the same.
No doubt these “shades of gray” are important and should not be glossed over in strategy formation.
Despite any flaws it may have, though, remember that simplification does have its merits—especially when it comes to organizing and understanding our world better.
Applying this thinking even further, many companies use some variation of the Configuration School either solely or supplemented by components from other models.
Such is certainly worth considering if you’re looking for an effective way to handle your own organization’s strategies!.
Embrace Flexibility When Choosing Your Strategy: Making Sense Of The Ten Schools Of Strategic Management
While each of the ten strategic management schools have their own advantages, none of them are perfect.
When forming your strategy you’ll need to mix and match elements from different schools to get the best benefits.
For example, when dealing with stability it might be beneficial for you to focus on the learning school, whereas when dealing with times of uncertainty the design school may be more appropriate.
This means that instead of dedicating yourself to a single school, it’s more important to select strategies based on your past, present and future circumstances rather than theories.
That way you can brainstorm new strategies while still utilizing all ten schools that have been developed.
Ultimately, all ten schools are part of the larger process of strategy formation and so understanding their individual merits can help in decision-making.
It’s also worth taking into account that plenty more ideas about strategy formation are still evolving so staying flexible is key!
Wrap Up
The Strategy Safari Book wraps up by underscoring the important lesson it hopes readers have taken away.
No single school of thought on strategy formation is perfect, each has its own strengths and limitations.
By understanding these pros and cons, though, you can better strategize for your organization and create a winning plan that suits your unique needs.
In other words: don’t limit yourself to one method when formulating a strategy.
Be open to consider different approaches and make use of their respective benefits.
That’s how you come up with the best possible solution for your organization!
