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Strategic Management
Types of Strategy
 Strategies may come about in different ways and
Mintzberg has recognised that there are
different modes of strategy formulation.
Planned Intended and Deliberate
Strategy - The Rational Model
 Planned or deliberate strategies come about where there are precise intentions,which are
written down and imposed by a central leadership.
 Key features include a large number of controls to ensure surprise-free implementation in
an environment, which is controllable, with managers who are able to ascertain, review
and evaluate every option available, and they are then able to choose what appears to be
the best option in the light of rational criteria. Often there is a specialist Strategy
Department.
 Organisations using this strategy should
 be large enough to afford the costs of formal analysis
have goals that are operational.
operate in an environment that is reasonably predictable and stable.
take a systematic and structured approach to its development.
collect internal and external information and integrate decisions into a
comprehensive strategy.
focus on systematic analysis, particularly in the assessment of the costs and
benefits of competing proposals.
 Strategic planning is seen as a way of preparing for changes and providing direction for the
organisation.
 It also allows the organisation to co-ordinate its activities internally.
Emergent Strategy
 According to Mintzberg and Waters, strategies can be deliberate or
emergent or a stage in-between.There is a corporate intent
followed by its implementation. Sometimes this intent is not
formally written down but emerges over time as part of the culture,
as a series of related decisions.
 Example 1 Top-down
 A culture of like minded people who have values which coincide
on a focus - on quality or a desire to be internationally known etc.
 Example 2 Bottom-up
 Out in the field, a salesman visits a customer.The product isn’t right,
and together they work out some modifications.The salesman
returns to the company and puts the changes through; after two or
three more rounds, they finally get it right.A new product emerges,
which eventually opens up a new market.The company has changed
strategic course’
Opportunistic Strategy
 Strategies may come about in or entrepreneurial ways.
 An organisation may take advantage of changes in the environment or recognise new skills
in an opportunistic manner.
 Alternatively, a firm may be set up by an entrepreneur because of an opportunity in the
market place.
 In the entrepreneurial mode, strategy-making is dominated by the active search for new
opportunities, and is characterised by dramatic leaps forward in the face of uncertainty.
 Strategy is developed by significant bold decisions being made. Growth is the dominant
goal of the organisations, and in uncertain conditions, this type of mode can result in the
organisation making significant gains.
 Entrepreneurial mode - requires the strategy-making authority to rest with one powerful
individual.
 The environment must be flexible, and the organisation oriented toward growth.These
conditions are most typical of organisations that are small and/or young.
 The organisation operating in this mode suggests by its actions that the environment is
not flexible, it is a force to be confronted and controlled.
 Power is centralised in the chief executive, with an unwillingness to ‘submit’ to authority.
Imposed strategy
 Strategy may be imposed on the
organisation.
 Government policies may have an impact on
the strategy; this has been the case for those
public utilities recently privatised.
 Recession and threat of a takeover may
force a strategy of cost cutting and
retrenchment.
 Technological developments may cause an
organisation to develop new products to
replace the ones that have become obsolete.
Realised And Unrealised
 The strategy however my be reailsed and
thus be successfully implemented or it
may fail and remain unrealised in practice.

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lesson 3 SM.pdf

  • 2. Types of Strategy  Strategies may come about in different ways and Mintzberg has recognised that there are different modes of strategy formulation.
  • 3. Planned Intended and Deliberate Strategy - The Rational Model  Planned or deliberate strategies come about where there are precise intentions,which are written down and imposed by a central leadership.  Key features include a large number of controls to ensure surprise-free implementation in an environment, which is controllable, with managers who are able to ascertain, review and evaluate every option available, and they are then able to choose what appears to be the best option in the light of rational criteria. Often there is a specialist Strategy Department.  Organisations using this strategy should  be large enough to afford the costs of formal analysis have goals that are operational. operate in an environment that is reasonably predictable and stable. take a systematic and structured approach to its development. collect internal and external information and integrate decisions into a comprehensive strategy. focus on systematic analysis, particularly in the assessment of the costs and benefits of competing proposals.  Strategic planning is seen as a way of preparing for changes and providing direction for the organisation.  It also allows the organisation to co-ordinate its activities internally.
  • 4. Emergent Strategy  According to Mintzberg and Waters, strategies can be deliberate or emergent or a stage in-between.There is a corporate intent followed by its implementation. Sometimes this intent is not formally written down but emerges over time as part of the culture, as a series of related decisions.  Example 1 Top-down  A culture of like minded people who have values which coincide on a focus - on quality or a desire to be internationally known etc.  Example 2 Bottom-up  Out in the field, a salesman visits a customer.The product isn’t right, and together they work out some modifications.The salesman returns to the company and puts the changes through; after two or three more rounds, they finally get it right.A new product emerges, which eventually opens up a new market.The company has changed strategic course’
  • 5. Opportunistic Strategy  Strategies may come about in or entrepreneurial ways.  An organisation may take advantage of changes in the environment or recognise new skills in an opportunistic manner.  Alternatively, a firm may be set up by an entrepreneur because of an opportunity in the market place.  In the entrepreneurial mode, strategy-making is dominated by the active search for new opportunities, and is characterised by dramatic leaps forward in the face of uncertainty.  Strategy is developed by significant bold decisions being made. Growth is the dominant goal of the organisations, and in uncertain conditions, this type of mode can result in the organisation making significant gains.  Entrepreneurial mode - requires the strategy-making authority to rest with one powerful individual.  The environment must be flexible, and the organisation oriented toward growth.These conditions are most typical of organisations that are small and/or young.  The organisation operating in this mode suggests by its actions that the environment is not flexible, it is a force to be confronted and controlled.  Power is centralised in the chief executive, with an unwillingness to ‘submit’ to authority.
  • 6. Imposed strategy  Strategy may be imposed on the organisation.  Government policies may have an impact on the strategy; this has been the case for those public utilities recently privatised.  Recession and threat of a takeover may force a strategy of cost cutting and retrenchment.  Technological developments may cause an organisation to develop new products to replace the ones that have become obsolete.
  • 7. Realised And Unrealised  The strategy however my be reailsed and thus be successfully implemented or it may fail and remain unrealised in practice.