Ten Schools Of Strategy

Following are the ten schools of strategy :

The Design School (A process of conception)


the design school is a theory, where Mintzberg recommended that, tactic ought to be prepared using
tools along with procedures for instance SWOT analysis moreover Ashridge Mission model
fundamentally it is a SWOT analysis. Mintzberg, Lampel and Ahlstrand (1998,p.23)
Clear and unique tactics are planned. To match the external environment here the organization used the
internal situation.

Premises of the Design School :

It should be a deliberate process of conscious thought
Responsibility regarding the control and consciousness should be attached to the CEO
The model of strategy should be simple and informal
They should be one of a kind
The process is complete when the strategies seem to be formulated as perspective.They
need to be explicit.
Only when the best one is chosen,can we implement it.

The criticism against this thought scool are :

No clarity in the organization in terms of it's strenghths and weaknesses.
When ,how and when not should be the strategies formulated
The major assumption is that the data can be aggregated and transmitted to the upper
levels without substantial losses
Other major assumption is that environment can always be understood and is sufficiently
stable in the future.

Example : Design School

In the recent past we have noticed that Microsofts share price has gone down. The reason can be
attributed to lack of long term contracts with OEM manufacturers and good design team which can
influence the customers to a large extent. In order to bridge this gap, Microsoft entered in to a
strategic alliance with NOKIA there by acquiring the capability internally.


The Planning School (A formal process)

Mintzberg, Lampel and Ahlstrand (1998,p.47) said that the planning school of thought suggests
investigation on the current situation of the business such as the external factors, where the business
stands currently, current issues, and so on and focuses mainly about the implementations of the strategy.
This model persuades new idea, improvement, establishes goals as well as objectives and assists the
business to allot resources based on their needs. The philosophy looks a lot like the five pillars of strategic
management procedure and hence in modern-day business environment it is very useful.
The main steps in the process are :

Objective setting stage
External Audit Stage
Internal Audit Stage


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Ten Schools Of Strategy

Strategy Evolution Stage
strategy operationalisation stage



The premises of this school are as follows :

Strategies are a result of control,formal planning,breaking down in to steps with a checklist
and support by techniques.
Responsibility of the entire process vests with the leader(The CEO)
Strategy needs to be made more explicit in terms of objectives,budgets,programs and
operating plans.

The major criticism is :

It assumes that the organizations can predict the future/environment remains fairly stable
Effective strategy making connects action to thought process which in turn connects
implementation to formulation which is missing.
Formal systems could never internalize, comprehend and synthesize information.

Example: Planning School

Renowned football player Cristiano Ronaldo was used by Clear Shampoo as the model for Clear Men,
the plan was to use a popular male football icon for football lovers. The strategy has been executed
properly via excellent communication channels.
Internal factors : Attrition rate , Number of new clients added
External Factors : How European markets are performing, General GDP outlook,etc.


The Positioning School :

According to Mintzberg, Lampel and Ahlstrand (1998,p.81) this concept recommends the focus on
the current position of the company in the industry and development of strategies that would
change the position of the company. In other words, this concept suggests that companies should
focus more on how to change its current position in the industry and well as in the customers mind.
This thought school designs generic categories of strategies.

Following are the premises of Positioning School :

Strategies are generic,especially common,identifiable positions in the market.
The economic environment is competitive.
Strategy formation is selection of one such generic positions.
Analysts play a major role in assisting managers through their calculations.
Market structure drives deliberate positional strategies that drive the organizational
structure.

The criticism of This school are :

The focus is narrow.
It's biased towards traditional big business


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Ten Schools Of Strategy

It's more concerned about the process.
Position is selected from a restricted list of conditions.

Example : Positioning School

Positioning is a way to bring customers.Toyota is perceived as an affordable car manufacturer all
around the world.When Toyota came with Lexus its luxury Sedan,it felt that its perception of
affordable car manufacturer would hurt the sales of Lexus.Henceforth,it decided to hiveoff Lexus as
its sub brand and launched it as a different brand.


The Entreprenurial School :

In this thought school,the strategy building process is vested with the single leader(Usually the CEO)
and is built on a vision.The proponents believe that the key to organizational success was
personalized leader ship based on strategic vision.This holds true not only in starting up and building
the organisations but also in case of collapsing organisations.

The salient features of this thought school are :

Strategy making is preceeded by rigorous search of opportunities.
Power is centered at th eleader(usually CEO)
It is characterised by major leaps in the wake of uncertainty.
Growth is the dominant goal of such organisations.

The premises of the school are :

Strategy exists as a perspective in the leader's mind
The formulation process is conscious only to an extent
Leader promotes vision and watches it cloasely and makes changes if necessary
Strategic vision has got flexibility and hence the organizations.(Simple structure in response
to Leader's directives)

The criticism of this thought school is that it centres the strategy formulation on the leader,an
individual.In case of confusion the employees may become hostile and may demand a new leader.

Example : Entreprenurial School

GE is a very good example in this context which claim s to have produced largest number of CEOs
than Harvard.When Jalk Welch took over the leadership he dismantled the way the organization was
functioning under Jones and same was the case when Jeff took over Jack.


The cognitive school :

This school derives it's thoughts from the field of cognitive psychology.The proponents of this theory
are Reger,Huff,Bogner,Thomas and Schwenk.Lyle is the leading proponent.The ideology of this
school is that the more information a peron has,the more informed he will be and so will be his
decisions.And hence he will make the best decision.


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Ten Schools Of Strategy

The premises of this model are :

Strategy is a cognitive process which involves the functioning of mind.
They emerge as perspectives that define how people reac t with the stimulus of the external
environment.
These stimuli are decoded through cognitive maps.
Strategies are difficult to attain and to change as well.

It says the external environment is very dynamic and can't be predicted by anyone even with utmost
cognitive power.

Example : Cognitive School

Linked in has learnt over time that there is a need for the social networking at professional
stage.They could foresee a need for such network and came up with the site.Now its a huge
success.



The Learning School :

The Learning School: According to Mintzberg, Lampel and Ahlstrand (1998,p.175) this concept suggests that
organisations following this concept formulate their strategies by learning from their mistakes. The strategy
formulation in this particular concept is very slow as managers learn and slowly formulate a strategy. This
concept is influenced by Education. This concept sounds very useful and the process of strategy
formulation is like the cognitive school, but has the same problem as being time consuming and might
happen that organisations are left with formulating no strategy at all.
Following are the principles of learning organization :

Organizations can learn as much from failures as they do from success.
Learning organisations assume that managers and workers close to
design,manufacturing,distribution and sale of product know more about the activities than
superiors.
Learning organizations works actively in transferring knowledge from one part to the other
and ensures that relevant knowledge reaches the desired unit.
Learning organisations spend a lot to get info from outside their boundaries.

The premises of the school are as follows :

The complex and unpredictable nature of the organisation's environment makes formulation
and implementation indistinguishable beyond an extent.
Leader must learn but more commonly it is the collective system that learns.
Learning takes place through behaviour through simultaion so that some sense can be made
out of the action.

Criticism of this thought school are :

There is always a threat of taking the extreme positions wrt strategy i.e No Strategy,lost
strategy or wrong strategy.





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Ten Schools Of Strategy

Example : Learning School

Aravind Eyecare hospital has an objective to provide affordable eyecare to poor people.The skill was
obtained when a large number of operations were performed which helped the organization in
identifying the bottlenecks and removing them whih was possible because of continuous learning.


The Power School :

According to Mintzberg, Lampel and Ahlstrand (1998,p.223) this concept suggests that
organizations following this concept formulate their strategies based on their power, which may be
a competitive advantage. The power of a company may be used to formulate a strategy, which may
be brand image, or huge amount of capital. The strategy usually exerts some power over the
customers. This concept is influenced be political science..There are basically two types of power
relations. . This is usually done by organisations that have a monopoly. This is expensive as
organisations have to invest heavily in order to make a statement, and the delusion of being
powerful may also lead organisations to formulate a wrong strategy.

Micro power which deals with politics within the organization
Macro power which talks about use of power by the organization

The premises of the model are :

Strategy is build up by power and politics either as a process with in the orhanisation or as a
behaviour or of the organization itself in its external environment.
Such emerging strategies which result from process take the form of positions and ploys.
Micropower views strategy as an interplay and confrontation similar to how the politics
works.
Macropower views the organization as supporting the the organization's development by
controlling and cooperating with other organizations by maneuvring in the forms of various
networks and alliances.

The criticism of this school of thought is that though political dimension can have a positive impact
we should not under estimate the disadvantages and the confusion it creates.

The following are the major contribution to this field :

Coalition
Political Games
Collective Strategy
Significance of politics in promoting strategic change

Example : Power School

Lancome perfumes, have fragrances that appeal to many individuals and people tend to buy the same
perfume as it becomes their signature. Lancome uses this power and charge a premium price for their
products. .










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Ten Schools Of Strategy

The Culture School :

According to Mintzberg, Lampel and Ahlstrand (1998,p.263) this concept suggests that organisations
following this concept let the corporate culture formulate their strategy. This concept encourages
employee involvement and hence the formulation of the strategy concerns the cooperation of the
employees. This concept is influenced by anthropology. This resembles entrepreneurial school as well
since, the organization is usually influenced by some visionary leader. This helps in guiding companies on
how to deal with mergers and acquisitions, but ignores the external environment and might cause conflicts
between the employees of the organisation due to brainstorming.

The main points of this school are :

Decision making style
Resistance to strategic change
,overcoming the resistance to strategic change
Dominant values
Culture clash

The premises of this school are :

Strategy is formed based out of interactions with society and beliefs and understandings
mutually shared by the members.
Individuals acquire these over time through day to day interactions which is mostly tacit and
non verbal rarely through some formal procedures.
It takes the form of perspective above all even above positions which is rooted in the
common good and it gets reflected in the patterns by which capabilities of the organization
are protected and leveraged.
Culture and in specific the ideology do not support the strategic changeso much as the
perpetuation of existing strategy.

The criticism of this theory is that it's very vague.And it's hard to come up with with a strategic
management with this philosophy.Nonetheless this shool of thought adds substantial value to the
organization.

Example : Culture School

) an interview with the CEO of BMW revealed that it is a part of the corporate culture of BMW, that
employees have the freedom of getting things done and department managers can take decisions without a
committee and this helps them to move fast and this strategy of letting employees decide instantly gives
BMW a competitive advantage

The Environment school :

According to Mintzberg, Lampel and Ahlstrand (1998,p.285) this concept suggests that organisations
following this concept focus on the external environmental factors and crafts a strategy based on
those factors. The organisations check all the political, social, economical and technological factors
and devises up a strategy in order to tackle the predicaments they are facing. This is a reactive
process and is influenced by biology. This resembles the design school as it somewhat uses the
external factors as a determinant while formulating a strategy. This is useful because it analyses the
external environment and then formulates a strategy, but at the same time ignores the internal
environment which may create a problem in implementing the strategyThe basic model is
Mintzberg's four groups of contingency view - stability complexity,market diversity and hostility.

The premises of this model are :


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Ten Schools Of Strategy

Environment is the central factor for any strategy of an organization
Organization must respond to the external environmental forces.
Leadership is passive for reading and adapting to the environment.
Organizations try to group together in different positions where they operate until the
resources become scarce or conditions become way too unfavourable.Finally they collapse.

The criticism of this school is that environment is very subjective and vague.Contribution of the
school gives central role to the environment in strategy formation.

Example : Environment School

Nager(2008) suggests that Dell made low-priced computer during the global recession which appealed to
many corporations as well as consumer

The Configuration School :

It combines all the schools of strategy and then creates an entirely new school of thought.The
proponents of this theory are Mintzberg,Miles & Snow,Miller,Tichy ,stopford,Sherman and Baden-
Fuller.The two main aspects of this school are configurations and transformations.

The basic models of the school are entrepreneurial organisation,diversified org,machine org,political
org,adhocracy org,professional org and missionary org.

The types of stages are :

Stage of Development
Stage of stability
Stage of adaption
Stage of struggle
Stage of revolution

The four main patterns are :

Periodic bumps
Oscillating shifts
Life Cycles
Regular Progress

The premises of This model are :

Most of the time an organisation is believed to have a certain static configuration of its
attributes. Hence it adopts a form of structure which suits its needs and this gives rise to
particular set of strategies
These periods are sometimes disturbed by some processes.
These successive patterns order themselves in to patterns over a period of time
designing of strategy can be conceptual or a formal planning.



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Ten Schools Of Strategy

The criticism against this school of thought is that organisations cant be exactly
differentiated as black and white.There are some grey ones as well.

Example : Configuration School

Google is one of the leaders in todays hyper competitive environment.It adapts itself to the
environment.For example ,in response to witter it came up with Buzz ,In response to FaceBook it
came up with GooGlePlus.It also entered the Operating System industry.It is in to mailing service and
last but not the least in to data maintenance.In data collection and maintenance,it is the leader.In
mailing service it is posing a tough competition to rest all service providers.





References :

http://www.strategologybyquattro.com

http://facilitatingimpact.blogspot.com

http://google.com


































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