Business Strategy Concept Approaches

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Today there are a lot of different approaches to understanding of the concept of business strategy. If we consider the problem from a contemporary perspective, this concept can include the peculiarities of the process of adopting of appropriate action plans and distributing of the resources for carrying out the plans to meet the desired objectives.

Moreover, there is the problem of determining of the most effective and significant approaches to examining of the principal theories for the strategy development.

There can be defined two approaches which require further studying with the references to the peculiarities of the modern business tendencies. They can be considered as the prescriptive and the emergent approaches (Mintzberg 1990).

Referring to the peculiarities of the emergent approach as the ‘hustle as strategy’, Bhide (1986) affirms the critical importance of this approach to strategy in a financial services business firm.

Embracing this approach to the strategy development, he presents a scenario where the firm can take the advantage of transitory opportunities. Bhide affirms that flexibility, agility, and hustle are more important than a fixed plan.

Employing the processual view of business strategy, he postulates that the strategy is a continuing process of negotiation and adjustment of routines, as a way to make sense of the chaos in the world (Bhide 1986).

Thus, such strategies are seen as ‘emergent’, with their coherence accruing through the action and perceived in retrospect, while successive small steps eventually put the organization ahead in terms of customer focus, profit maximization and market leadership (Harfield & Hamilton 1997a).

However, Bain (1959) discussed the environmental setting in which firms operate, rather than the internal operations approach, the primary unit of analysis of the industry and not the individual firm or overall business sector.

Furthermore, Whittington (2002) presents four basic schools of thought as approaches to the business strategy. Classical school discusses a rational or objective approach. It places great confidence in the readiness and capacity of managers to adopt profit maximizing strategies through rational long-term planning.

Evolutionary school alleges that markets and not managers dictate strategies to be employed in particular environments. According to Williamson (1991) the evolutionary view of competition sees organizations that survive as only those that adapt themselves to the environment.

The representatives of processual school believe that it is not the environment or the calculated rationality by managers that are important. Instead, they consider organizations as coalitions of individuals, each of whom brings their own personal objectives and cognitive biases to the organization (Mintzberg 1990).

There is also a systemic approach which takes into consideration the social environment the firm is revolving in. Huff (1990) affirms that this social constructivist view suggests that only cultural and not cognitive norms guide strategy.

The business strategy presented by Bhide (1986) in the article belongs to the processual school, which focuses on compromise, adjustment and quick fixes as dictated by the environment. As it was mentioned above, he presents a scenario that concentrates not on ‘strategy’, but on ‘tactics and execution’ (Bhide 1986). It takes a reality perspective, rather than an idealist one.

It seeks to simplify complex processes through harnessing of the varying skills of an organization’s members who bargain amongst themselves towards achievement of set goals. Customer focus and orientation are directed towards the profit maximization, rather than competitive approaches against other competing organizations.

When we compare the prescriptive approach and the emergent approach we can state that the prescriptive approach concentrates on the peculiarities of the processes in management from the point of systematical, continuous, objective and balanced forms and ways of its realization.

The analysis of the emergent approach proves that this approach does not tie organizations down to mission, goals and objectives or the predetermined long-term plan.

Nevertheless, Mintzberg (1990) determines such advantages of contemporary strategies as the possibilities to change the direction according to the challenges of the constantly developing business reality.

The flexibility of contemporary strategies is the requirement of the modern tendencies in the development of the business processes. From this point of view, the emergent approach can be considered as one of the most appropriate to the realization of the most effective and competitive strategies and their requirements in the context of evolving business processes today.

Bhide (1986) provides his own vision of the approach to the realization of the strategies in the article. He focuses on the possibilities of transformational and organizational changes. It is also important that there discussed the opportunity for the strategy to form and realize its main principles according to the approach.

This approach also can be compared with the empirical research by Mintzberg (1990). As it was stated, the approach presented in the article by Bidhe (1986) can be considered as the ability to develop the organization’s opportunities.

Moreover, there is the opportunity to react to the requirements of the contemporary business environment. Such needed transformational changes where reinvention is required can be analyzed as not hindered. Nevertheless, there is a risk that the strategy development can become rather slow and not to be suitable for the requirements of the business situation.

Also, conflicting objectives from different members of the organization can hinder the strategy development. Over-reliance on the emergent strategy formation could result in underperformance of the organization in the short and long run (Bidhe 1986).

That is why it is significant to note that the strengths and weaknesses of Bidhe’s consideration of the problem of strategies and approaches to them can be analyzed according to the peculiarities of the requirements of the contemporary business environment organizations.

Thus, these strategies should be flexible and rather changeable. From this point of view, the emergent approach can be thought of as the most appropriate to new opportunities of the process of the strategy’s development and to modern requirements of the society.

The complementation of these two approaches rather than their mutual exclusivity should be considered as a future direction for organizations to plunge into.

Nevertheless, the problem is in the fact that the realization of this strategy can result in a number of actions which can be considered as the ways of preventing or declining of the level of the organization’s control. In any case, the monitoring and control phase of the prescriptive strategic planning approach contributes to regular tweaking of the plan in line with changing environmental factors.

References

Bain, JS 1959, “Industrial organization”, Joe S Bain Wiley, New York.

Bhide, A 1986, Hustle as strategy, Harvard Business Review. pp. 59-65

Harfield, T & Hamilton R (1997a), ‘Journeys in a declining industry’, Journal of Organizational Change Management, 10(1), pp. 61-70.

Huff, AS (ed) 1990, ‘Mapping strategic thought’ Chinchester, John Wiley & Son.

Mintzberg, H 1990, ‘Strategy formation: schools of thought’ in JW Fredrickson (ed) Perspectives on Strategic Management New York: Harper Business, pp. 105-236.

Whittington, R 2001, ‘What is Strategy – and does it matter?’, Thomson Learning, UK.

Williamson, OE 1991, ‘Strategizing, economizing, and economic organization’, Strategic Management Journal, 12: 75-94.

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Business Strategy Concept Approaches

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