Friday, February 27, 2009

Insights from reviewing writings on strategic management

Amongst key insights on strategic management is the fact of the pervasiveness of prescriptive views in strategic management, even amongst those authors and researchers that purport to be promoting the adoption of new paradigms. The extent to which the prescriptive mechanistic paradigm continues to dominate writings in strategic management is perhaps indicative of its historical contribution and utility.  The schools of planning, design and positioning thus still enjoy a wide following in the field.

 

Some of the reviewed articles assist in demonstrating the follies of an over-reliance on a perspective that is often not reflective of the realities of organisational practice. This over-reliance has seen other lenses for looking at the problem of strategic management being completely overlooked or down played.

 

The field of strategic management seems to be failing to effectively embrace alternative paradigmatic lenses or a multi-paradigmatic approach. This failure reflects inadequate levels of awareness of and/or openness to theoretical alternatives amongst students, researchers and managers. This in turn is limiting discourse and/or inquiry across paradigms.

 

Further, the level of understanding of organisational plurality and paradox is constrained. Lewis & Keleman (2002) cited in Bakir & Bakir (2006) state that multi-paradigm researchers apply an accommodating ideology, valuing paradigm perspectives for their potential to inform each other toward more encompassing theories.

 

The adoption of divergent views to strategic management has a potential of assisting managers to better deal with complexities and uncertainties that face them in their work. Instead, managers continue to struggle to make sense of, and implement, unrealistic text-book tools on strategy, most of which assume that strategy is a rational and prescriptive process.

 

Grounded theory research used by Bakir & Bakir (2006) for instance offers a concept of strategy that utilises, rather than discards, divergent and competing paradigms of strategy. This represents a departure from the rational schools and their critiques from the behavioural schools, depending on the context of strategising, into a more comprehensive framework that unpacks the complexity of strategy, pinning down its elusiveness.

 

A key insight is therefore that there is no need to discard prescriptive views, but that they should be used in combination with other perspectives in order to make writings in the field to closely mirror reality and be of improved utility and descriptive value. For instance, Muniv-Hernandez et al. (2004) manages to present a model that integrates deliberate and emergent strategies. This model shows that a strategy, which is eventually realised or implemented, is a combination of deliberate and emergent strategy, where the deliberate component is only a part of the original intended strategy. Accordingly, this author states that although planned, rational methods are not the whole story, they have an important part to play in creating competitive advantage.

 

The limitations of prescriptive views are not limited to in the field of strategic management. Writing and research in marketing is also affected by this over-reliance on prescriptive views. This is in spite of an observation by authors such as McKenna (1991) who observes that it has been shown that the old approach, based on the prescriptive planning school, which entails getting an idea, conducting traditional market research, developing a product, testing the market and finally going to market is slow, unresponsive and turf ridden.

 

There is a compelling need to break with some of the major limiting assumptions of the prescriptive schools. Practitioners, including researchers in strategic management need to accept that many of these assumptions limit the ability of the field of to make a meaningful contribution to organisational performance. 

 

For instance, the over-reliance in strategic management on processes such as forecasting and trend analysis needs to be tempered by an acknowledgement that by their very nature, forecasts must be unreliable, particularly with technology, competitors, and markets all shifting ground so often, so rapidly, and so radically.

 

There is a need to acknowledge the unpredictable, and often reciprocal nature of the relationship that exists between strategy, structure, conduct and performance. Prescriptive views of unidirectional linearity that have seen organisations adopting myopic strategies, which are not in sync with the fluidity of organisational contexts can only perpetuate mediocrity and under-performance.

 

Another aspect of organisational behaviour that needs to be discarded is the belief that strategy formulation and implementation is a top down process. This view continues to see CEOs and/or senior managers going on regular contemplative retreats to conjure up often unrealistic strategies. The exclusion of the people that are at the customer interface in this process needs to be re-evaluated if organisations are to achieve better results.

 

The Cartesian principle that has resulted in the separation of thinking from doing, with the former always preceding the latter has not helped organisations to perform at their best. This way of doing things, where strategy formulation is separated from and precedes strategy implementation does not seem to be suited to a world that is characterised by complexity and unpredictability. 

 

It is evident that many researchers and authors in the field of strategic management believe that lower level employees, must be restricted to implementing strategies that have emerged from the top of the hierarchy fully formulated. Not only is room not made for employees to participate in the thinking process, but neither is there space for them to continue the design process using result of lessons from implementation.  By its denial of change and emergence, this process not only limits the performance of organisations, but it also alienates workers, which is probably responsible for low levels of morale that is often observed in a number of organisations.

 

It seems that managers follow the platitudes of prescription because of a strong urge to eliminate randomness and chance. Prescriptions provide a false sense of security and control. Rather than dismissing randomness and chance, there is a need to develop approaches that acknowledge them and use them to the benefit of organisation.

 

The impact of simplifications of the strategic management process that are provided by existing tools, models and frameworks also needs some examination. These models, including Porter’s five forces, the value chain, the growth-share matrix of the Boston Consulting Group, the SWOT analysis, the experience curve etc need not be regarded as dogma. There needs to be an acceptance that they are tools that can be used to support strategic management, and not dogmas to be applied and believed uncritically.  For instance, in deciding strategy, it may not always be possible to know for sure upfront that a particular competence will be a strength. It is easier to do this with hindsight, but does not excuse the confusion of such hindsight with foresight, as tends to happen in strategic management writings.

 

The over-reliance on the prescriptive perspective has resulted in too much focus being placed on the content of strategy. For example, many of the tools and frameworks that are in vogue in strategic management address the issue of what an organisation’s strategy should consist of. This has seen very little attention being given to the process of strategy. Given the rather complex and unpredictable nature of organisation’s competitive context and the importance of human dynamics within organisations, it is apparent that a perspective that focuses attention on both the content and process of strategy is required.

 

Finally, strategic management practice may benefit substantially from research programmes that focus on internal organisational environments that support the development and emergence of wining strategies.  Such a focus should be applied in order to understand better the conditions that support the development of better plans, designs and positions on the one hand. On the other hand, it should assist organisations with insights on how strategies that can enable them to cope with complex, unpredictable, chaotic and random situations. 

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