Approaches to the strategy making process

1. Approaches to
the strategy-
making process
Ram Krishna Tiwari
MFC 24
SOMTU
Group: A

2. Strategy
 A plan or action designed to achieve a
long-term or overall aim,
 The art of planning and directing overall
forces and movements to achieve a
mission.

3. Approaches
:identified by Whittington (1993, 2001)
as a model of analysis
 the classical or rational planning
approach,
 the evolutionary approach,
 the processual approach and
 the systemic approach.

4. Generic Perspective on
Strategy, Whittington (2000)

5. The classical or rational-
planning approach
 strategy is formed through a formal and
rational decision-making process
1. a comprehensive analysis of the external
and internal environment,
2. allows for plans to be made to implement
the strategy.
 profitability is assumed to be the only goal
of business

6. Contd…
 clear goals,
 understanding the competitive environment,
 resource appraisal and
 effective implementation form
1. ‘corporate’ level
2. ‘business’ level
3. ‘operational’ level
 ‘readiness and capacity of managers to
adopt profit-maximizing strategies through
rational long-term planning’

7. The evolutionary approach
 Strategy is made through an informal
evolutionary process in which managers
depend less upon top managers to plan and
act rationally and more upon the markets to
secure profit maximization.
 Compared with ‘natural law of the jungle’
 markets are rarely static and indeed likened
competition to a process of natural selection,
where only the fittest survive.

8. Contd…
 markets, not managers, choose the prevailing
strategies.
 The classical approach become irrelevant
 markets are too competitive for ‘expensive
strategizing and too unpredictable to
outguess’
 sophisticated strategies can deliver only a
temporary advantage

9. The processual approach
 need to take account of the psychological,
political and behavioral relationships which
influence and contribute to strategy
 organizations and markets’ as ‘sticky, messy’
phenomena, from which strategies emerge
with much confusion and in small steps
 cognitive limitations of human action, and
influenced by ‘bounded rationality’

10. Contd…
 skill, dedication, perfection, mastery of detail,
sense of involvement and intimacy through
experience and commitment
 strategy is discovered in action
 conflicting goals present within organizations.

11. Emergent strategy:
The systemic approach
 strategy is shaped by the:
 social system within which it operates
 cultural and institutional interests of a broader
society.
 organizations differ according to the social
and economic systems in which they are
embedded
 understanding of strategic human resource
management.

12. Reference
http://www.wisdomjobs.com/e-
university/hr-management-tutorial-
69/strategic-human-resource-
management-1438/approaches-to-the-
strategy-making-process-8731.html