Strategic decision making into 3 modes:
Entrepreneurial mode – where formulation of strategy is done by a single person. Focus is on opportunities and growth.
Advantage is the speed with which strategy can be formulated and implemented. Disadvantage is that does not consider problems that may arise in the processes. Strategy is characterized by bold decisions. For example WIPRO Infotech , Apple computers
Adaptive mode – it is characterized by reactive solutions than proactive search for new opportunities. Example : introduction of customized personal computers in response to DELL in Indian market or coke. This results in fragmented strategy for incremental improvement.
Planning mode : this involves systematic information gathering for situational analysis generating alternate strategies and selection of appropriate strategy. This mode includes both reactive and proactive solutions to current problems. Ex: entry of MNCs in the automotive markets in India made the lead player Maruti Suzuki come out with new models and slowdown production of non moving models.
Some times organizations may adopt a forth mode called logical incrementalisation mode This is a synthesis of all three modes indicated above. This is an interactive process in which the organization probes the future, experiments and learns from a series of partial commitments rather than through global formulations of total strategies.
Modes of strategic management
Modes of strategic management are the approaches adopted by managers in formulating and implementing strategies. They address the issues of who has the major influence in the strategic management process and how the process is carried out. Managers generally use of one of three major approaches to strategic management: entrepreneurial, adaptive and planning. Adaptive Mode: This is an approach to strategy formulation that emphasizes taking small, incremental steps reacting to problems rather than seeking opportunities and attempting to satisfy a number of organizational power groups. The adaptive mode is characterized thus, by some familiar features: 1) The focus is on solving problems of immediate concern, rather than developing long term strategies. 2) Instead of meeting problems head-on in a bold way, the executive try to follow a reactive approach. 3) This approach is used by managers in established organizations that face a rapidly changing environment and yet several coalitions or power blocks, that make it difficult to obtain agreement on clear strategic goals and associated long term plans (Mintzberg) 4) The emphasis is on taking small, incremental steps aimed at appraising powerful coalitions within the organization. Since power distributed it is always not possible to develop major goals, take bold initiatives and get ahead in a unified way.
Modes of Strategic Planning
There are three different modes of strategic planning. These are depicted in a diagram, listed and explained as follows: [pic]
1. Entrepreneurial Mode
In entrepreneurial mode, strategic planning is done by one person. He takes the full responsibility of planning for the production department. That is, he does production planning on behalf of the production department. He has entrepreneurial skills. That is, he is good in planning, organizing, motivating, etc. He is also a strong and bold leader.
2. Adaptive Mode
In adaptive mode, the production managers go on changing his plans according to the changes in the environment. He first makes a big plan, then he breaks it into smaller plans. This is done to adjust with the dynamic environment. Then he tries to combine all these plans to make a strategic production plan. In this method, the production manager is not at peace. He works in a disorganized environment. Therefore, his planning is also disorganised.
3. Planning Mode
In planning mode, the production manager makes the plan after analyzing the objectives and resources of the organization....