Strategy Should Only Ever Develop From Detailed Rational Planning

Introduction

Strategy is a common term used in the day-to-day activities of an individual or business — is an important factor generally overlooked but critical to the decision making process. As common as the term may seem, it is very complex in nature and it is applicable in all aspects of operation. Amrollahi and Rowlands (2018 pp.56) suggest that no self-respecting business today will be in operation without a strategy. The objective of the paper is to demonstrate how strategy has evolved over the years with a basic structure of examining how strategy is crafted via several approaches and its application. It further details the common approaches to strategies development and answers the question “should strategy only develop from detailed rational planning?”

While the goal of the paper is to examine the role of rational planning in strategy development cum crafting by different scholars, it however reviews other approaches and schools of thought to strategy development by relating it to the emergent approach of strategy development. In addition to this, the paper aims to demonstrate how there is no single way to crafting and development of strategy by proposing a mix to the several approaches.

Definitions and Perspectives

Strategy is a broad concept that has evolved over time with no specific definition however several writers and scholars have developed several schools of thought and views about this concept. Sirén and Kohtamäki (2016 pp.98) allude to this view of strategy that we simply do not know what strategy is or how to develop a good one. Choong (2018 pp.203) equally shares this view of the complex nature of strategy as they state in their book “the word strategy is so influential but the question is still asked “what does it really mean?” Eventually strategy turns out to be one those words we inevitably define in one way and yet often also use in another way.

These definitions by Bryson (2015 pp.102) contrasts strategy as either a plan (intended activities of looking ahead to the future) or as a pattern (realized strategies that are emergent in nature from the past. The definitions are applied in organizations when strategy is developed for their plans and evolve patterns out of their past. This can be compared to an organization’s operating plans; these strategies are intended to be achieved as realized strategies (deliberate) but along the line not all of these strategies are achieved (unrealized strategies). The organization equally achieve unplanned strategies which are emergent in nature but follow a pattern of action.

Approaches to Strategy Formation

Due to the complex nature of strategy, strategy cannot be developed via a singular model; however, several models has been developed for crafting and developing strategy. Certain models gave rise to the various schools of thought that formed the approaches to strategic planning. Various models for crafting strategy consists of the prescriptive, descriptive and configuration models and as suggested by Calabrese and Costa (2015 pp.204), these models form the basis of development for at least ten schools of thought to strategy development.

De Vasconcellos et al. (2018 pp.103) further compared Managers to craftsmen and strategy as their clay metaphorically where a suggestion was made that “like a potter, Managers sit between the past of corporate capabilities and a future of market opportunities and will bring to their work an intimate knowledge of the materials at hand; if truly they are craftsmen. The design school of thought for strategy formation has been widely used as the main model of strategic management as a result of its mechanistic nature. This perspective has played a vital role in strategy research development, teaching and practice. This school of thought is the most influential view of strategy, which proposes a model of strategy making that seeks to attain a match or fit between internal capabilities and external possibilities.

The planning school of thought formed the background formal strategic planning, which originated at about the same time the design school was developed. This school of thought grew to have an enormous impact on the strategic management practice but had several pitfalls; however Heracleous (1998 pp.89) suggests that it is valuable to the field of strategic planning but the principles of planning cannot be ruled out in combination with learning from others in selecting strategies.

Concepts of Rational (Classical) Approach to Strategy

At the beginning of a reporting period for example financial year, the organization where I work; shares a plan (AOP — Annual Operating Plan) which is in line with its mission, vision and set objectives with the employees. The plan is developed based on the input of the board and cascaded down to the senior management for implementation by functional groups as a rational plan. Choong (2018 pp.97) suggests, “the implementation of this plan is based on the evaluation of the opportunities and threats in the external environment and the strengths and weakness in the internal environment.

This approach to strategic planning is one of the oldest forms of strategy crafting and “the most popular prescriptive model of the process of strategy formation” that however “attempts to deliver an economically sound basis for a form of planning; consequently formal planning demands rationality in the economist’s sense of the term planning. Calabrese and Costa (2015 pp.45) opinion mentions, “Comprehensive planning is important since it stimulates the future and provides a common decision making framework throughout an organization.

De Vasconcellos et al. (2018 pp.103) propose that there is a deep involvement of top management in development of strategies and action plans within the rational planning approach because this approach is based on an assumption of a perfect environment so the future position of an organization is perceived to be known and determined via quantifiable objectives.

Bibliography

Amrollahi, A. and Rowlands, B. (2018). OSPM: A Design Methodology For Open Strategic Planning. Information & Management, 55(6), pp.667–685. Retrieved from https://bit.ly/2SzB4PK

Bryson, J. (2015). Strategic Planning for Public and Nonprofit Organizations. International Encyclopedia of the Social & Behavioral Sciences, 31(2), pp.515–521. Retrieved from https://bit.ly/2hfoSGW

Calabrese, A. and Costa, R. (2015). Strategic Thinking And Business Innovation: Abduction As Cognitive Element Of Leaders’ Strategizing. Journal of Engineering and Technology Management, 38(2), pp.24–36. Retrieved from https://bit.ly/2Syd8vZ

Choong, K. (2018). Use Of Mathematical Measurement In Improving The Accuracy (Reliability) & Meaningfulness Of Performance Measurement In Businesses & Organizations. Measurement, 129(4), pp.184–205. Retrieved from https://bit.ly/2QNE6mh

De Vasconcellos, S., Garrido, I. and Parente, R. (2018). Organizational Creativity As A Crucial Resource For Building International Business Competence. International Business Review, 32(1), pp.97–124. Retrieved from https://bit.ly/2B1HBvb

Heracleous, L. (1998). Strategic Thinking Or Strategic Planning?. Long Range Planning, 31(3), pp.481–487. Retrieved from https://bit.ly/2EhuwSw

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