This document discusses strategy formation as a process of negotiation that involves the use of power and politics. It outlines two branches of the "power school" - micro power, which looks at strategy making through political games of bargaining and coalition building among actors within an organization, and macro power, which involves an organization negotiating with and controlling external environmental factors. Key aspects of strategy formation discussed include stakeholder analysis, cooperative strategy making, and how politics can both benefit and hinder the achievement of integrated strategic perspectives within organizations.

1. Strategy Formation as a Process of Negotiation
Levine Jade L. Lulu
Yra D. Salazar
BA 190 – Strategic Management
University of the Philippines
Prof. Mita Angela M. Dimalanta

2. 
 strategy formation as an obvious process of
influence
 use of power and politics to negotiate strategies
favorable to specific concerns
 The term “Power” in this type of strategy is used to
describe the exercise of influence beyond purely
economic
 “Politics” – exploitation of power

3. 
2 Branches of Power School

4. 

5. 

6. 
 Micro power looks at strategy-making in the form of
political games which involves bargaining,
persuasion, confrontation, and forming coalition
groups among the organization.
Micro Power

7. 

8. 
 Insurgency
 Counterinsurgency
 Sponsorship
 Alliance-building
 Empire-building
 Budgeting
 Expertise
Political Games in Organizations
 Lording
 Line versus staff
 Rival camps
 Strategic candidates
 Whistle-blowing
 Young turks

9. 

10. 

11. 
 Various actors and coalitions of actors pursue their
own interests and agendas.
 Subordinate groups can enter into the processes of
determining and distorting strategies.
Key points about Micro Power:

12. 

13. 
 The achievement of a strategy as an integrated
perspective, a single-shared vision, seems unlikely
under political circumstances.
 In political circumstances, we should expect no
shortage of strategies as ploys.
Key points about Micro Power:

14. 
 Ensure the strongest members are in leadership
 Ensure that all sides of an issue are fully debated
 May be required to stimulate necessary change that is
blocked by the more legitimate systems of influence
 Ease the path for the execution of change
Benefits of Politics

15. 
 the use of power by the organization
 handling the demands of external factors and taking
advantage for the organization’s benefit
Macro Power

16. 
 Macro power is the process of acting upon or
negotiating with, rather than reacting to, the external
environment
External Control by Organizations

17. 
 An organization can simply deal with each demand
as it rises
 An organization can strategically withhold and
disclose information
 An organization can play one group against the other
3 basic strategies

18. 

19. 
 It is an attempt to cope with political forces through a
rational approach.
Stakeholder Analysis

20. 
 Stakeholder behavior analysis
 Stakeholder behavior explanation
 Coalition analysis
Stakeholder Strategy Formulation

21. 
 controlling the power of external factors by
controlling their behavior.
Strategic Maneuvering

22. 
 Networks
 Collective Strategy
 Strategic Alliances
 Strategic Sourcing
Cooperative Strategy Making

23. 
 It is hard to describe strategy formation as a process
devoid of power and politics.
 The power school has introduced words necessary to
the field of strategic management such as “coalition”,
“political game” and “collective strategy”.
Contribution of the Power School

24. 
 Bhandari, A. (2013). Strategic Management : A
Conceptual Framework. New Delhi: McGraw Hill
Education Private Limited
 Changing Works. (2016). Mintzberg’s Political Games.
Retrieved from
http://changingminds.org/explanations/behaviors/
games/mintzberg_game.htm
 Minztberg, H. (1998). Strategy safari : a guided tour
through the wilds of strategic management. New York:
The Free Press.
References