Strategy in Modern Management.

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Table of Contents

Introduction
Discussion
Conclusion
Bibliography

Introduction

Strategy is one of the main concepts in modern management and marketing. Critics admit that strategic planning often spoils strategic thinking, causing managers to confuse real vision with the manipulation of numbers. And this confusion lies at the heart of the issue: Truly poor performance in any of strategy’s dimensions has the potential to offset excellence elsewhere. Similarly, a selective excellence, earnt or fortuitous — in strategic geography, for example, think of Britain in May-June 1940 — may well offset inferior performance in other dimensions. In general, the analysis finds that there is no single ‘master’ dimension of strategy, though people, politics, and time are strong candidates.

Discussion

In modern organizations, both strategic thinking and strategic planning are work together to help manager create successful strategies and goals of the organization. Drejer (2002, p. xxi)) supposes that: “strategy theory based on core competencies—or technology, since these two words are not clearly defined as mutually exclusive conceptions—has become an alternative approach to strategy making”. The assumption is that all systems, to some degree, partake of those combined characteristics and, thus, would be able to appropriate the planning process accordingly. A closely held private company might be posited as one type of organization, a public school system, the other. Almost every working person has experienced at least the disposition of the first, and most have had some involvement in the second. In fact, public school districts are probably the most open organizations on earth, by law. But the real difference appears most strikingly in communication and involvement, especially information or decisions affecting the future of the organization. This approach is not an attempt to rigidly typecast those enterprises, because the strategic thinking and attitudes of either may range across a broad spectrum, from restrictive autocracy to full participation. Although it is inconceivable that a company operate in a laissez-faire mode, one school superintendent actually announced that he operated the district according to a “secret” plan. However, it is recommended, and assumed, that either type of organization subscribe to a process that invites participation because of the obvious dual advantage of quality and support; but the kind and degree of participation remains a matter of prerogative and judgment. “Strategic planning in this formulation is seen as an activity carried out within the parameters of what is to be achieved, but does not explicitly question those parameters, and is therefore analogous to single-loop learning” (Heracleous 1998, p. 484). To attain goal congruence with each individual may be very difficult. For example, people can be malassigned, in which case the job will bring out their weaknesses. They may have personal problems that interfere with organizational goal accomplishment. There are hundreds of other reasons why organizational goals may not be in alignment with an individual’s goals. Nonetheless, there must be a search for shared values, and the goal setting process provides the tool to do just that (Amit & Schoemaker, 1993),

Strategic planning and strategic thinking are interrelated representing a core of modern management. The most successful strategies are visions not plans because it is impossible to create an ideal and perfect plan: internal and external environments demand constant changes and amendments. “Vision” is an obligatory component of strategic plans, even though the actual declaration seemed most like a description of current events, a justification of the existing system (Graets, 2002). The basic problem with visions is that they are always fleeting and elusive. Palpability is of no significance to the bright or shadowy images that haunt the landscape of tomorrow. Proverbially the realm of prophets and soothsayers and closely associated with dreams, visions waive both certainty and substance. Legendarily, visions were the means by which gods and other supernatural beings revealed to mortals, via some chosen seer, pictures of either a heaven or a hell, figuratively–literally (Amit & Schoemaker, 1993), For some perverse reason, there were always more visions of hell, usually accompanied by a clamorous divine warning and a last chance to mend one’s ways. Beatific visions are so rare that they are enshrined, the visionaries canonized. Even so, there was considerable tolerance in the visions’ specifications and veracity. The overall effect was the thing. After all, details lead only to trifling misunderstanding, argument and squabbling (Boone & Kurtz, 1992). “The purpose of strategic planning is to facilitate strategic thinking, where structured planning tools are used to aid creative thinking” (Heracleous 1998, p. 482). Organizational structure may limit or provide a great deal of freedom in how we approach a job. Other people, the task to be done, and technology all impact on what we do on the job and how we go about doing it. All these depend on the purpose of the organization, which defines why we exist. Even beyond that, however, the external environment has a lot to do with how we go about doing things. First, there is the industry we are in, whether public or private. Competition strongly influences what we do. The pressure to produce results is one reason why so many fashionable trends in management emerge. Everyone is looking for an easier, more effective way to produce (Graets, 2002).

Any planning process that begins with vision is immediately suspect. There is little chance that anything of substance will come of it. No one can be exactly sure about what goes on in the spectral realm. Every day brings a new revelation. But discernible words, now and then echoing from the outer mists, suggest many strange things–all apparently aimed at creating an air of mystery, heavy with the fragrance of the supernatural. Some, especially those drawn from Native American traditions, probably cross the line in the profanation of sacred traditions (Drucker 1974). Ultimately, the spectral raises this improbable question: how is it possible that strategic thinking can be anti-thought? Admittedly, much is to be said for the attempt to escape the shackles of purely rationalistic processes–certainly a blow for emotional freedom, popularily known as “thinking out of the box.” However, one would expect that strategic thinking would be at least intellective, if not intellectual, but that is not the case. Instead there is a distinct tendency toward rationalistic ambiguity, indicative no doubt of a psychology of ambivalence about oneself, others, and the way the world works (Reed, 2006).

For every company, what is needed is a kind of scenario that best combines the immutable principles of planning with the time-proved critical attributes of decision making. Both the principles and the attributes are certain; together they will validate the process. (1). Reciprocity between the strategic and the operational. This does not mean that the plan is developed top-down, but that in any system that which is strategic must be justified by that which is operational; and the operational must have strategic context in order to be meaningful. (2) Focus on results and outcomes. The object of strategic planning is always to reduce or eliminate the lag time between the idea and the action. A plan that does not instigate action is not a plan; it is a study, report, or review. (3) The relationship between ends and means. This is perhaps the most difficult principle to grasp, yet simply states the old adage, “If you don’t know where you are going, any direction will do.” Institutions have a particular difficulty with this principle because activity usually is not directed toward any result. Ends are always measurable or observable; they are the outcomes to be accomplished (Boone & Kurtz, 1992).

Acceptance of plans e is not enough. Certainly the current definition of consensus as majority will over minority acquiescence does not constitute agreement. In strategic decision making there must be no winners and no losers, but everyone must experience gain (Gardiner, 2005). Specifically, the six components of the plan–beliefs, mission, parameters, objectives, strategies, and action plans–must be matters of full agreement. If there is no agreement, there will be no commitment. For example, there is the traditional rational decision-making model: identify the problem; analyze the situation; set an objective; explore alternative courses of action; examine obstacles and adverse consequences; and reach a conclusion (Clegg et al 2005). Creative problem solving may involve any of a number of non-linear thought processes, such as divergent thinking, convergent thinking, lateral thinking, excursion, synthesis, and brainstorming. It is always helpful if those involved in planning understand simple logic, inductive and deductive reasoning, analogy, and metaphor. The greater the intellectual grasp of those methodologies, the more genuine the plan (Rugman 2000).

Strategic planning is based on strategic thinking which can be seen as a unique vision of the problem. The subject of decision making raises the larger issue of the planning organization’s strategic thinking; specifically, the question is about prerogative and responsibility (Grant, 1998). Typically derived from or constituting “management style” the answer, therefore, may range from authoritarian to laissez-faire (Reed, 2006). Although most “professionally managed” organizations now subscribe to “participatory” decision making, there is nowhere any uniform understanding of exactly what that means. And, as if to add injury to insult, it is usually force fitted into a rigid autocratic construct, which makes real participation impossible (Sterman, 2000).

Even at best, a decision-making is a matter of degrees. So, because of this latitude, the strategic planning process must actually provide an example that will carry over into the day-to-day operation of the organization. In other words, the process of planning itself will be instructional, exemplary for decision making throughout the system. While the fullest involvement possible is the preferred course (better decisions and better support for the decisions), even that is not absolute and may be achieved in either an open process or a closed process. Those words are not intended as judgmental (Geneen 1984). hey merely indicate the range and the method of involving individuals within (and outside) the organization in the planning process. Typically, commercial enterprises opt for a closed process; that is, the process of developing strategies is accomplished by the strategic officers–the board, senior executives, and managers; and the action planning is done by those in operational responsibilities (at one time long ago, that process was referred to as “top-down–bottom-up”). Non-commercial enterprises, in addition, to those participants, typically involve, through the entire process, parties from outside the organizations–customers, clients, funding sources, political allies, and the community at large; hence the process is described as “open”.

In general, the strategic planning has much in common with strategic thinking and vision. The planning process can be defined and explained as the plan developed–the means, the methods, and the sequence of planning activities. Typically, the process takes approximately nine months to complete and follows a rather rigid, linear course from beginning to end. But unlike the discipline, which is altered only at the peril of seriously weakening the plan, the process quite often must be adapted to local conditions and requirements in order to achieve optimal effect. Yet, even so, the process must never sacrifice its necessary time-on-task, results-oriented character. Never can it be waylaid by convenience or comfort (Ireland et al 2005). And, most important, apparent inconsistency in the process can never be allowed to cast doubt on the credibility of the plan itself. Ideally, any modification in the process outlined here will be made and agreed upon before the actual planning is begun and set forth as a formatted schedule to which everyone will adhere rigorously. Mid-course changes usually run the risk of prolonging the process, diluting its substance, and compromising its credibility (Teece et al 1997).

The first, and sometimes the most difficult, decision to be made in the planning process is who will be the facilitator (Johnson & Scholes 1998). The facilitator does not necessarily have detailed knowledge of the enterprise for which the plan is being developed, but must, of course, be an experienced planner. In fact, sometimes expertise in the specific business at hand can be a disadvantage; it is possible that a facilitator can know too much. The best questions honestly seek answers, and sometimes seemingly foolish questions prompt the wisest responses (Thompson & Martin, 2005). “The view proposed here holds that strategic thinking and strategic planning are interrelated in a dialectical process, where both are necessary for effective strategic management, and each mode on its own is necessary but not sufficient” (Heracleous 1998, p. 486).

For a planner, the basic question is whether to use an external or an internal facilitator. That is not easily resolved because there is not a substantial body of evidence supporting either choice. In the private sector, most corporations find, all things being equal, that an external facilitator is more effective in challenging and moving the organization in new directions, as well as imposing the rigors of the planning process on those involved (Marx, 2006). Strategic planning is about risking the future; it is not about compliance with generally accepted accounting procedures. Nor should the facilitator be someone who has retired from an institutionalized bureaucracy, such as an old-line traditional corporation or the military. Nor should it be a university professor whose only experience is in academia. Actually, the credibility of the facilitator determines the credibility of the process. So the choice of facilitator may well be the most important decision the chief executive makes in the entire strategic planning process (Thompson & Martin, 2005). The decision whether to use an internal or an external facilitator must be made carefully, without presupposition, in light of the advantages of either approach (McDonald & Christopher 2003).

The manager brings an objectivity to the planning process that no one inside of the organization can possibly enjoy. This objectivity is necessary if the organization is to: concentrate its attention on the planning process as a serious project, not something someone is handling part time; face up to critical or sensitive issues in a manner that strengthens relationships and builds mutual self-confidence and esprit de corps; and subordinate personal wishes to the good of the organization (Cole, 1998). The planning process excites people and raises their expectations, so it is very important that the process chosen be the one that offers a guarantee of ultimate success. Participants may tend to be disappointed, even a bit cynical, about planning if the first attempt does not meet their expectations (Walker 2005).

In reality, successful strategies are vision because all plans are based more on the collective intuition of the planning team than on so-called hard data. The most effective and efficient way to format organizational information is a collection of “vital” signs. Any human organization, like any human body, has certain health indicators that, when taken together, become a reasonably accurate profile of the organization’s total condition and a predictor of its potential for better or for worse. Any professional executive could suggest impromptu a dozen or so such indicators, so there would be nothing either revelatory or inclusive in a suggested list. Since planning is the chief executive’s responsibility and the strategic thinking is his or her prerogative, the strategic planning team serves at the pleasure of that officer (Mintzberg et al 2004). Usually, although some members of the team, by virtue of their responsibility, are logical, perhaps necessary, selections, the chief executive–especially in public sector organizations–must exercise particular discretion to guarantee that the team meets certain requirements. Here again, the fundamental difference between commercial and non-commercial organizations looms rather large. In both cases, the planning team should have three characteristics, but there will be significant variation even here, depending upon the range of involvement (Whittington, 2000).

Most corporate systems do so on the side of restriction. Quite often, these teams are very small, sometimes even a subcommitment of the board or a halfdozen or so “top-management” executives. However, for reasons already stated, and for reasons yet to be discussed, the team, and the plan, can benefit from judicious expansion (Dobson & Starkey, 2004). Educational systems and their kind, political entities, have a distinct proclivity to go to the other extreme, no matter what the size of the organization itself. For practical reasons, a corporate team should not exceed 25 people; a public systems team should be made up of no more than 30 members. These are absolute limits, no matter what the size of the organization (Moore, 2001).

Stratgies will be successful only to the degree that barriers are ameliorated or eliminated. Strategic planning can provide at least the beginning of reconciliation and unity of effort. It is still true that a house divided against itself cannot stand. The actual success of the initial planning session depends primarily on the personality and skill of the facilitator, and secondarily on the personality and skill of the team. The facilitator must seek constantly to adapt each to the other, not merely as the dynamics of the process require but especially as the process offers opportunity for mutual growth. The best plans evolve correspondingly with the growth of the team toward unity of purpose and effort (Moore, 2001; Pittengrew et al 2006). But it must be based on the principles of reason, otherwise the imagination will reject it (Drejer, 2002).

Conclusion

In general, strategic planning and strategic thinking are interrelated reflecting in organizational goals and purposes. The management presented here is not intended to be an ideology but rather an individual strategic thinking. When creativity outpaces reasonableness, the plan drifts away into fantasy. Of course, that is not to say that the decisions must be “realistic,” in the usual sense of the word. After all, the whole purpose of planning is to create a new reality, which naturally will be seen by others as unrealistic. The choice of goals is important, but once set, they are not automatically attained. Strategic thinking is of no use if managers or the people in the organization are not committed to them. Too often, resolutions to attain a challenging goal fizzle before any results are attained. People need to be persistent.

Bibliography

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Strategy in Modern Management.

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