3. Learning objectives
• Appreciate of the significance of the writings of Machiavelli
to strategy
• Understand intra-organizational politics and the centrality of
political skill for strategists
• Explain what is meant by the ‘business elite’ and its
strategic significance
• Understand strategy and the decision-making process
3
4. Strategy is irremediably political
• Options get up; others are rejected
• Futures are desired while some scenarios are rejected
• Arguments are made and data marshalled
• Moves are surreptitiously made and blocked
• Some proposals wither while others flourish
4
5. Machiavelli: the politics of strategy
• Powell (2010) found several of Machiavelli’s precepts
relevant to modern strategy:
– Leaders need an overall plan, need to choose their
targets and then aim high, prudently preparing in the
good times for possible futures in which the challenges
will be different and considerable
– Leaders need to be reflective about strategy, to create
space for thought, reflection and conversation
5
6. Machiavelli: the politics of strategy
– If leaders have a strategy, then they need to be able to
communicate it effectively with a degree of conceptual
clarity about what is intended and desired
– Strategy is more than just ideas and concepts: it has to be
implemented, action plans need enacting, vested
interests identified, wooed or defeated
6
7. Intra-organizational politics and
political skill
• Strategy is irremediably political and politics is part of
normal organizational life:
– Organizational politics is the use of organizational
resources, such as knowledge, position or networks, to
engage in actions that are strategically self-interested
– Behind every strategy stand those making it – not from a
position of benign neutrality and benevolence but always
from a position of interest
7
8. What do organizational politics arise
from?
• According to Pettigrew:
– Structural divisions in the organization between different
component elements and identities, and the different
values, affective, cognitive and discursive styles
associated with these
– The complexity and the degree of uncertainty attached to
the dilemma that strategy seeks to address
8
9. What do organizational politics arise
from?
– The salience of issues for different actors and identities in
the organization
– The external pressure coming from stakeholders or other
actors or organizations in the environment
– The history of past politics in the organizations in question
9
10. Power
• Power characterizes all social relations as each of us seeks
to make others do what we would want them to do
• In doing so, we seek to subject these others to our will,
desires and preferences
• Because we are all engaged in these power relations, we
are always potentially both subjects and objects of power
• Organizations are, amongst many other things, devices for
distributing and (more or less) stabilizing power relations
10
11. Strategic interests
• An interest can be defined in terms of the relations between
actors, discursive rationalities and the structural positions
they occupy
• Interests depend on context and can change over time
• Part of that context involves the structural roles and
positions that people find themselves in:
– Production managers will differ in their interests and
rationalities from marketing managers, for example
11
12. Mintzberg’s political games of
strategy
• Sponsorship games
– Where powerful elites in the organization seek to use
strategy to sponsor those who are their clients and those
who are loyal to them (or so they think) in the organization
• Alliance-building games
– Played among peers who implicitly seek reciprocal
support
• Budgeting games
– Where the objective is to secure resources to one’s
strategic interest and to deny them to the strategic
interest of others
12
13. Mintzberg’s political games of
strategy
• Expertise games
– Where participants seek to position their expertise as the
strategic key to the strategy dilemma – ‘it’s a marketing
issue’, says the marketing representative, while the
production managers see the solution in production
efficiency terms
13
14. Micro-politics and political skill
• Micro-politics: strategic attempts to exert a formative
influence on social structure and relations in local settings
• Political skill: using knowledge and power astutely and
procedurally in a manner that best serves the strategic
interest one is seeking to advance
14
15. Power relations and alliances
• Organizational politics is rarely a question of winner takes
all; more usually, compromises have to be made and
coalitions and alliances formed
• An alliance, in its broadest sense, is a mechanism that links
diverse, more or less central and peripheral actors, interests
and strategies for mutual gain
• Alliances entail a process of (more or less) convergence of
interests (Kalyvas, 2006: 383)
15
16. Multinationals and subsidiary politics
• MNEs are inherently political entities:
– The interests, ideologies, identities and careers of those
at the periphery (e.g. subsidiary) are likely to be different
to those at the centre (e.g. head office)
– MNEs have politics within subsidiaries, as senior
managers in less-developed countries will often meet and
mingle extensively with national elites, in prestigious
venues, such as at the opera, major sports events and
boards of cultural institutions, leaving them detached from
local context
16
17. Multinationals and subsidiary politics
– Politics also emerges from the transfer of practices within
MNEs – the quality of employment, health and safety, and
sustainability are often improved through the
standardization of MNE practices, but may be resisted by
local organizations or governments
17
18. MNE relations of power
• There are many relations of domination and subordination:
– headquarters over subsidiary
– national language of owner over that of the subsidiary
hosts
– strategy conceived at the centre over improvisations
made in peripheries attuned to local contexts
– global elites versus national elites
• The power of MNEs, in relation to the host countries in
which their subsidiaries are based, is often described as
‘asymmetrical’ or ‘hegemonic’, especially in the context of
emerging economies
18
19. Business elites and strategy
• Business elites are the relatively small group within the
societal hierarchy that are accorded power, prestige or
command over others on the basis of a number of publicly
recognized criteria
• Elite status is premised on their command of different forms
of capital (economic, social, cultural), preserving and
entrenching the status thus acquired over the course of a
lifetime and inter-generationally
19
20. Forms of elite capital
• Economic: the money, stock
options and property a person
owns
• Social: the social connections and
ties that a person has (e.g. ‘old
boys network’, ‘friends in high
places’)
• Cultural: the cultural knowledge
and habits a person has acquired
through childhood, education or
socializing (e.g. knowledge of
opera, ballet, fine wine, literature)
20
21. Elite power
• Elites are responsible for shaping
action at the strategic level that
has major effects on the life
chances of many stakeholders,
who include:
– those they employ and
unemploy
– those whose communities they
blight or improve
– those governments whose tax-
raising capacities they service or
avoid
21
22. Social distance and elite legitimacy
• ‘It is by being different, it is by signalling that getting to the
top is not possible for everybody, irrespective of their merits,
that the elite persuades people that there are impervious
worlds and that these worlds are necessary to the balance
of societies – and the organization’
(Courpasson, 2009: 437)
22
23. The inner circle
• Elites form an ‘inner circle’ by virtue of their command of
resources, in an echo of the resource-based view:
– Corporate domination involves control of the economic
field of resources by a relatively small number of powerful
companies, themselves controlled by a corporate power
elite
– The corporate power elite operates collectively within
fields of power that bring together the uppermost strata
drawn from distinctive organizational fields (e.g. industry,
the arts, science, government)
23
24. The inner circle
– These fields of power are
where strategy, at the highest
level, is conceived and
discussed by the power elites
as opportunities for different
types of social and positional
equals to mingle
24
25. Resilience of strategic elites
• The most striking characteristic of strategic elites is their
resilience
• Resilience is not based exclusively on the cohesiveness and
closure of inner circles and social networks of competence
and acquaintance
• Elites are quite capable of social reproduction through ‘new
blood’
• Organizational elites are open oligarchies that need elite
diversification to be sustained and perpetuated (Courpasson,
2009)
25
26. Elite reproduction
• Courpasson (2009) suggests that different paths of social
mobility can lead to the business elite:
– Embedded mobility draws on the patina of wealth and
prestige that luck in being born in the right bed delivers to
many corporate leaders
– Network-based mobility owes its elevation less to
birthright and more to the social relations it can coordinate
around its personages, through marriage and
membership of the right clubs and associations, and
through an extensive array of interlocking directorships
26
27. Elite reproduction
– Traditional company-based
elites are the consummate
corporate professional
bureaucrats – devoting a life of
service to one organization and
moving through fast-track
career paths and internal
education programmes
27
28. Resisting elites and changing strategy
• Elites and top managers cannot expect to exert total control
of strategy
• Strategy will never be ‘perfectly’ implemented because
power relations in complex organizations entail delegations
of authority and discretion, creating a degree of
indeterminateness in action (i.e. you can never completely
know, or control, what others do)
• Elites invariably represent changes in strategy as a
response to a changing environment, or changes in
technology; it is a familiar power/knowledge strategy to de-
personalize and make political interests seem merely
instrumental
28
29. Strategy and decision-making
processes
• A strategic decision is typically
defined as being one that has
long-term organizational
implications for key success
factors, such as access and
control of resources and effective
performance
29
30. Bounded rationality and satisficing
• Rationality is bounded rationality when it falls short of
omniscience, where the features of omniscience are largely
failures of knowing all the alternatives, uncertainty about
relevant exogenous events and an inability to calculate
consequences (Simon, 1978: 14)
• Satisficing: a decision that will both ’satisfy’ and ‘suffice’. A
satisficing decision is made where the organization does not
strive to make an optimal decision, but instead one that
satisfies key actors in the organization and ‘does the trick’. A
satisficing decision is rarely ideal but it makes do with what
knowledge is available and deemed relevant
30
32. Dimensions of power
Dimension Power dynamic
First dimension: decision-
making
One actor gets another to do something that they
would not otherwise do
Second dimension: non-
decision-making
Decision-making and non-decision-making; issue
creation and control; keeping non-issues off the
agenda
Third dimension: ideology Shaping preferences, thoughts and desires so that
people do not question existing arrangements or
willingly support them
People ‘accept their role in the existing order of things,
either because they can see or imagine no alternative
to it, or because they view it as natural and
unchangeable, or because they value it as divinely
ordained and beneficial’ (Lukes, 1974: 24)
32
33. Power and change
Dimensions of power Opportunities for changing strategy
First dimension
One actor gets another to do
something that they would not
otherwise do
New rules and norms enforced
Second dimension
The power of non-issues and non-
decision-making
Introducing different and new types of
people and their issues to agendas
Third dimension
Ideology: deep-seated values and
dominant cultural assumptions about
what is natural or right that benefits
certain groups
Changing values and assumptions through
actions that make the deep and buried
acknowledged and acted upon
33
34. Power and non-decision-making
• Non-decision-making is when decisions do not get onto the
agenda because they have been suppressed, restricted or
not raised:
– Strategists will try and preserve zones of non-decision-
making
– Constituting zones of strategic inactivity is as important as
setting up strategic activity
34
35. Power and non-decision-making
• Non-decision-making is a means by which demands for
change in the existing allocation of benefits and privileges
can be silenced, rather than voiced, because opponents of
the existing allocations realize that they should give up and
not raise their strategic alternative (e.g. because they do not
have strength in numbers or control over key resources to
bargain with, or because their arguments would be
dismissed given the prevailing rationality)
35
36. Managerial power
• Diefenbach (2009: 47) argues
that ‘strategic decisions are not
only made by powerful managers
– strategic decisions make
managers powerful’
• Managers are made more
powerful through making
decisions that symbolize them as
powerful, irrespective of the
agendas shaped, the non-
decisions made and the issues
included and excluded
36
37. Decision-making ignorance
• Multinational companies often have little concrete
knowledge of what exactly is happening in the factories in
the Third World making and supplying their products
• They can claim decision-making ignorance of local
violations of whatever policies they subscribe to
• In the Third World periphery, at the bottom of the supply
chain, the workers employed are excluded from any
decision-making and lack ‘voice’
37
38. The politics of voice
• Dundon and colleagues (2004: 152) identify four main ways in
which employee voice may be given to non-issues, non-
strategic actors and the effects of non-decisions:
– articulation of individual dissatisfaction
– expression of collective organization
– contribution to management decision-making
– demonstration of mutuality and cooperative relations
38
39. Decision-making is a political process
• Decision-making is a political process in which outcomes
evolve out of the processes of power mobilization attempted
by different parties in support of their demands (Pettigrew,
1972: 202)
• The Bradford Top Decisions research asked:
– What actually happens in the process of arriving at a
strategic decision?
– What differences are there in the process of making
decisions?
– Why do these differences exist?
39
40. Sporadic decisions
• Sporadic decisions involve many
interests, tend to move both
horizontally and vertically in the
organization and exhibit stops and
starts
• The greater the level of complexity
and the greater the political
controversy of a decision, the
more likely the decision will go
back and forth and be subject to
lengthy delays and revision
40
41. Sporadic decisions
• Topics for sporadic decisions
may be complex or problematic
to define, have key information
unavailable and/or difficult to
collect, and solutions that are
hard to recognize and evaluate,
with the process generating
headaches rather than
resolutions
41
42. Fluid decisions
• Fluid decisions are characterized
by a situation where, while a
decision is strategic, it deals with
an unusual situation that is not
particularly complex or political
• Such decisions can be handled
formally and quickly
42
43. Constricted decisions
• These involve matters which
bring familiar problems and
familiar interests, probably no
more than mildly political in
nature, that can be processed in
a ‘constricted’ way with routine
and familiar people and
processes
• Such decisions are relatively
smooth and straightforward and,
thus, require little debate
43
44. Decision-making processes
• Decisions must be taken in the face of uncertainty in
dynamic environments
• Traditional decision-making models are based on ideas of
probability, which evaluates outcomes that are finite and
expected, whereas possibility acknowledges the inherent
uncertainty, implying not only risk but also opportunity
44
45. Decision-making processes
• Managing possibility rather than probability may be
increasingly relevant
• Managers must also face uncertainty and complexity
ethically; recent management scandals show the need for
virtue-informed behaviours (Rego et al., 2012)
45
46. Paradoxical decision making
• Paradox was introduced as a framework to deal with the
inherent complexity of organizational life (Cameron and
Quinn, 1988)
• The way organizations approach contradiction defines the
build-up of dependences that ultimately push them in the
direction of either more virtuous or more vicious circles
• In a paradox, contradictions are interdependent: one pole
cannot exist without the other
46
47. Managing paradoxes
• Managing paradoxes through
differentiation or integration:
• Differentiation focuses decisions in
distinct product and service
realms:
– In the absence of integration,
domain-specific advocates can
become entrenched in their own
position
– The likely result is sub-
optimality, increased conflict and
reluctance to compromise
47
48. Managing paradoxes
• Integration emphasizes
synergies between distinct
elements:
– ‘Senior leaders who want to
sustain commitments to
strategic paradoxes can
focus on embedding these
practices into their top
management team’ (Smith,
2014: 1618)
48
49. Being strategic
• Strategy can never be wholly
successful; its positives will always
produce negatives and unintended
consequences
• Strategies can never be successful
for everybody on whom
organizations have an impact
• Strategy entails power and
decision-making and power
relations cannot always be positive
and decision-making cannot
always spread satisfaction
49
50. Back to Machiavelli
• Machiavelli suggested the importance of being flexible in
behaviour: respect the ordinary moral values and identify
the fundamental rights that must be considered in all
decisions (Cavanagh et al., 1981)
• As one person manages with power, they manage others
who are themselves managing them with power, in an
endless circle generating contradiction, resistance and
struggle, and sometimes compliance
50
51. Back to strategy
• In real organizational life, there is at least as much concern
with internal politics and intra-organizational conflict, as
there is with external competition
• Most strategy theories all but ignore intra-organizational
conflict and power relations
• Strategists ignore power, politics and intra-organizational
conflict at their peril
51
52. Conclusion
• You should now know about:
– Machiavelli
– Organizational politics
– Strategic interests
– Business elites
– Decision-making
– Paradoxes
52
53. References
• Cameron, K. and Quinn, R. (1988) [full details to be added]
• Cavanagh, G.F., Moberg, D.J. and Velasquez, M. (1981)
‘The ethics of organizational politics’, Academy of
Management Review, 6: 363–374.
• Diefenbach, T. (2009) Management and the Dominance of
Managers: An Inquiry into Why and How Managers Rule
Our Organizations. London: Routledge.
53
54. References
• Dundon, T., Wilkinson, A., Marchington, M. and Ackers, P.
(2004) ‘The meanings and purpose of employee voice’,
International Journal of Human Resource Management,
15(6): 1149–1170.
• Kalyvas, S.N. (2006) The Logic of Civil War. Cambridge:
Cambridge University Press.
• Lukes, S. (1974) Power: A Radical View. London:
Macmillan.
• Pettigrew, A. (1972) ‘Information control as a power
resource’, Sociology, 6(2): 187–204.
54
55. • Powell, J. (2010) The New Machiavelli: How to Wield Power
in the Modern World. London: Vintage.
• Rego, A., Cunha, M.P. and Clegg, S. (2012) The Virtues of
Leadership: Contemporary Challenge for Global Managers.
Oxford: Oxford University Press.
• Smith, W.K. (2014) ‘Dynamic decision making: A model of
senior leaders managing strategic paradoxes’, Academy of
Management Journal, 57(6): 1592–1623.
55
References
