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The Strategic Management Beast

The ten schools of thought on strategy formulation

29Oct

By far, one of the most intriguing aspects of strategic planning does not stem from the process itself, but the personalities involved in the process. Be it in an academic setting or business setting, you can typically tell the background of an individual’s past experience by his approach to strategy formulation and in certain cases, the lack thereof. Though this publication is not intended to seek out and explain behavioral psychology relative to strategic planning, it is intended to create awareness and appreciation for varying perspectives. The appreciation for varying perspectives on strategy formulation was not immediately apparent to me; it was not until Mintzbergs Strategy Safari that I came to terms with different, yet still effective ways to formulate strategies. Mintzberg argued for ten distinct schools of thought, where each school has a unique perspective focused on one major aspect of the strategy-formulation process. Table 1 – introduces the school of thought and typical approach:

Table 1)

School of ThoughtApproach
The Design School:strategy formulation as a process of conception
The Planning School:strategy formulation as a formal process
The Positioning School:strategy formation as an analytical process
The Entrepreneurial School:strategy formulation as a visionary process
The Cognitive School:strategy formulation as a mental process
The Learning School:strategy formulation as an emergent process
The Power School:strategy formulation as a process of negotiation
The Cultural School:strategy formulation as a collective process
The Environmental School:strategy formulation as a reactive process
The Configuration School:strategy formulation as a process of transformation

To write about each school in depth would defeat the purpose of this publication, instead italicized are the key themes within each school of thoughts approach, and at times a good description of personality traits that you may encounter during your time in strategic planning. So before you throw Jeff out who unknowingly utilizes the entrepreneurial school of thought in your next strategic planning session, remember that if it was not for this process – Larry Page and Sergey Brin may never have founded Google, or grown it to be what it is today. Before you criticize Bob for using the configuration school of thought, consider the vast changes that have occurred at General Motors post-2008, and or companies going through the merger and acquisition process today, which may not have been successful if it was not for transformation. Instead, be aware and focus on understanding which school of thought is going to be most applicable to the desired corporate objectives of your organization. Market maturity phases, such as - introduction, growth, maturity, and decline are strong determining factors of which school of thought will be most applicable. Consider the traits of the markets you play in, the primary needs of your customers – and then apply the appropriate school of thought.

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