Ten Schools of Thoughts of Strategic Management
TOPIC: TEN SCHOOL OF THOUGHT OF STRATEGIC MANAGEMENT
TEN SCHOOL OF THOUGHT OF STRATEGIC MANAGEMENT 1. The Design School. This school sees strategy formation as a process of conception.
Approach: Clear and unique strategies are formulated in a deliberate process. In this process, the internal situation of the organization is matched to the external situation of the environment. Basis: Architecture as a metaphor. In short: Fit! "Establish fit!" Contributions: Order. Reduced ambiguity. Simplicity. Useful in relatively stable environments. It supports strong, visionary leadership. Limitations: Simplification may distort reality. Strategy has many variables and is inherently complex. Bypassing learning. Inflexible. Weak in fast changing environment. There is the risk of resistance (not-invented-here behavior). Typical / compare: SWOT Analysis | Ashridge Mission Model 2. The Planning School. This school sees strategy formation as a formal process. Approach: A rigorous set of steps are taken, from the analysis of the situation to the execution of the strategy. Basis: Urban planning, system theory, cybernetics. In short: Formalize! "Strategy should be like a machine." Contributions: Gives clear direction. Enables firm resource allocation. Analysts can pre-screen the facts and they can judge the crafted strategies. Control. Limitations: Strategy can become too static. The risk exists of Groupthink. Predicting is difficult. Top managers must create the strategy from an ivory tower. Strategy is partly an art. Typical / compare: Theory of Mechanistic and Organic Systems | Parenting Styles | Levers of Control | Scenario Planning 3. The Positioning School. This school sees strategy formation as an analytical process.
Approach: It places the business within the context its industry, and looks at how the organization can improve its strategic positioning within that industry. Basis: Industrial organization (economics) and military strategy. In short: Analyze! "Nothing but the
TEN SCHOOL OF THOUGHT OF STRATEGIC MANAGEMENT 1. The Design School. This school sees strategy formation as a process of conception.
Approach: Clear and unique strategies are formulated in a deliberate process. In this process, the internal situation of the organization is matched to the external situation of the environment. Basis: Architecture as a metaphor. In short: Fit! "Establish fit!" Contributions: Order. Reduced ambiguity. Simplicity. Useful in relatively stable environments. It supports strong, visionary leadership. Limitations: Simplification may distort reality. Strategy has many variables and is inherently complex. Bypassing learning. Inflexible. Weak in fast changing environment. There is the risk of resistance (not-invented-here behavior). Typical / compare: SWOT Analysis | Ashridge Mission Model 2. The Planning School. This school sees strategy formation as a formal process. Approach: A rigorous set of steps are taken, from the analysis of the situation to the execution of the strategy. Basis: Urban planning, system theory, cybernetics. In short: Formalize! "Strategy should be like a machine." Contributions: Gives clear direction. Enables firm resource allocation. Analysts can pre-screen the facts and they can judge the crafted strategies. Control. Limitations: Strategy can become too static. The risk exists of Groupthink. Predicting is difficult. Top managers must create the strategy from an ivory tower. Strategy is partly an art. Typical / compare: Theory of Mechanistic and Organic Systems | Parenting Styles | Levers of Control | Scenario Planning 3. The Positioning School. This school sees strategy formation as an analytical process.
Approach: It places the business within the context its industry, and looks at how the organization can improve its strategic positioning within that industry. Basis: Industrial organization (economics) and military strategy. In short: Analyze! "Nothing but the