Lecture notes

Lecture 2014-01-29

Strategy Formation

Chapter outline:
I. The Issue of Realized Strategy
Strategy Formation Activities
Strategy Activity Roles
II. The Paradox of Deliberateness and Emergence
The Demand for Deliberate Strategizing
The Demand for Strategy Emergence
III. Perspectives on Strategy Formation
The Strategic Planning Perspective
The Strategic Incrementalism Perspective
IV. The Debate and Readings

Mission – “Some task, duty or purpose that sends someone on their way” (DVM 258)

Realized strategy:

Note: DVM see this as a circle, illustrated above, while one could assume that a company’s strategy starts in the identifying phase, e.g. by setting a mission

Strategy formation roles:
Top vs. middle vs. bottom roles
How much empowerment of middle or lower levels is beneficial for the organization?
Line vs. staff roles
Which of these two groups should be responsible for the strategy formation process?
Internal vs. external roles
Outsourcing or keep it in-house?

Deliberate strategizing  Pressure:
Direction  Without plans and objectives, organizations would be adrift
Commitment  Plans enable early commitment to a course of action
Coordination  Plans have the benefit of coordinating all strategic initiatives within a firm to cohesive pattern
Optimization  Plans facilitate optimal resource allocation
Programming  Plans are a means for programming all organizational activities in advance

Strategy emergence  Advantages:
Opportunism  Orgs. Must keep an open mind to grab unforeseen opportunities
Flexibility  Orgs. Must keep their options open and not commit themselves too early
Learning  The best way to find out what works is to give it a try
Entrepreneurship  Different people in the firm will have different ideas
Support  Getting things done in firms includes understanding political and cultural dynamics

Deliberateness and Emergence – Dealing with the paradox:

Deliberate or emergent?:
No consensus