Alternative Approaches to Strategy Development Management Level Paper

Alternative Approaches to Strategy Development Management Level – Paper E 2 Project and Relationship Management Lecture - 003 Vidya Rajawasam ACMA CGMA MBA

Alternative Approaches to Strategy We have covered the first part of alternative approaches to strategy development in the previous lesson. The focus was on advantages & disadvantages of rational approach and Environmental uncertainty.

Alternative Approaches to Strategy The other approaches to Strategy development, Since the rational approach has many drawbacks, there are other alternate approaches to strategy formulation; – Emergent Approach. – Incremental Approach – Freewheeling Opportunism – Political approaches

Alternative Approaches to Strategy The Emergent Approach, Mintsberg argues that the successful strategies can immerge in an organization without formal deliberate prior planning; This pattern is generally made up of intended planned strategies that are actually already realized any unplanned or emergent strategies that are not formulated yet.

Alternative Approaches to Strategy The Emergent Approach,

Alternative Approaches to Strategy The Emergent Approach, Under emergent strategy approach, the strategies may be tried and developed as they are implemented and if the strategy fails, a different approach will be adopted. The approach results in more short term emphasis than the rational approach model.

Alternative Approaches to Strategy The Emergent Approach, - Emergent strategy approach cultivates more innovative and creative culture in an organization.

Alternative Approaches to Strategy The Emergent Approach, – The emergent strategies are often results in responses to unexpected contingencies and also result in part of the current realized strategies.

Alternative Approaches to Strategy The Emergent Approach, – Mintzberg was not surprised about the failure of intended strategies. – This is true because a firms’ operating environment cannot be fully predicted for all intended strategies to be fully successful.

Alternative Approaches to Strategy The Emergent Approach Engagement Function; - Manage Stability, managers should master the details of running the business as well as business’s strategic future. - Manage Patterns, should encourage strategic initiatives throughout business and observe how they develop.

Alternative Approaches to Strategy The Emergent Approach. Engagement Function; - Detect discontinuity, should master the ability to detect subtle environment changes that may affect the business and asses its impact to future performance.

Alternative Approaches to Strategy The Emergent Approach. Engagement Function; - Reconcile change and continuity, it is very important that the managers should understand the radical changes and new patterns emerging as a result of strategy implementation. - These changes create resistance and instability.

Alternative Approaches to Strategy i The Emergent Approach- Honda Example; - Honda entered in to US Market to sell Bigger motor cycles (more than 350 cc engine capacity), - They had no intention of selling smaller 50 cc engine capacity motor cycles. - The failure of intended strategy forced them to sell smaller motor cycles for their survival.

Alternative Approaches to Strategy Review MCQs In which of the following ways where the managers have to focus on short term outcomes of the strategies? a. b. c. d. Under emergent strategy approach. Logical instrumentalism strategy Freewheeling opportunism Muddling through

Alternative Approaches to Strategy Review MCQs In which of the following ways where the managers have to focus on short term outcomes of the strategies? a. b. c. d. Under emergent strategy approach. Logical instrumentalism strategy Freewheeling opportunism Muddling through

Alternative Approaches to Strategy Review MCQs Describe the issues highlighted by numbers 1 -5

Alternative Approaches to Strategy Review MCQs 1. 2. 3. 4. 5. Intended strategy Realized Strategy Emergent Strategy Deliberate Strategy Unrealized Strategy

Alternative Approaches to Strategy Incremental Approach, There are several approaches to incremental approach; Ø Quinn – Logical incrementalism Ø Lindblom – Muddling through

Alternative Approaches to Strategy Quinn – Logical incrementalism - The Manager should Map the direction of the strategy and proceed with small steps. - Should be prepared adapt to the environment changes. - This approach falls in between the rational approach the muddling through approach.

Alternative Approaches to Strategy Lindblom – Muddling through - in practice, most of the managers are confuse with regard to goals and strategies of the organization. - Generally it is impossible for the strategic planning manager could carefully predetermine all possible outcomes. - Therefore, strategy formulation process should focus on slight extensions to existing strategies.

Alternative Approaches to Strategy Lindblom – Muddling through - in practice, most of the managers are confuse with regard to goals and strategies of the organization. - Generally it is impossible for the strategic planning manager could carefully predetermine all possible outcomes. - Therefore, strategy formulation process should focus on slight extensions to existing strategies.

Alternative Approaches to Strategy Incremental approach Engagement Function, - in practice, manager is at the central point of contact formal and informal communications. - These communications provide valuable understanding about the problems and issues faced by the organization. - The information gathered provides the base for need for change.

Alternative Approaches to Strategy Incremental approach Engagement Function, - The need for change pushes the organization to move to a new direction where new strategies will be formulated. - The manager does not present the full blown strategy and he focuses on formulating the strategy step by step process.

Alternative Approaches to Strategy Freewheeling opportunism, This approach describes the reactive process of management as an alternative approach to strategy development.

Alternative Approaches to Strategy Freewheeling opportunism, This approach suggests; - The clarity of purpose and direction of the organization. - Provides more scope for creativity

Alternative Approaches to Strategy Freewheeling opportunism, This approach suggests; - Develops commitment and creativity of management - Increase the flexibility to respond to real questions.

Alternative Approaches to Strategy Freewheeling opportunism, This approach suggests; - Provides mechanism for coordination, control and communication. - Ensures continuity in case of contingencies.

Alternative Approaches to Strategy Freewheeling opportunism, Criticisms of the approach; - May encourage managers to pursue their own agenda. - Possibility of restricting the organizations’ ability to respond to major environmental changes. - Persuasion of short term strategies instead of long term strategies.

Alternative Approaches to Strategy as a political process, Power is considered as the key influence in strategy development and formulation; - The approach considers strategy formulation as a political process. - Power is used for bargaining and negotiation as a key tool.

Alternative Approaches to Strategy as a political process, - A political and stakeholder analysis needs to be carried out in order to identify the main sources of power related to the organization. - The related power may be found within the organization or outside the organization.

Alternative Approaches to Strategy as a political process, - Therefore, it is important to identify the key players who has high level of power and interest in the organization. - Once the identification of key players completed, a power struggle may take place through negotiations resulting formulation of strategy.

Alternative Approaches to Strategy as a political process, - This approach is more suitable for larger, more mature organizations where the power structures are more established. - The important aspect of this strategy is that the approach focuses on identification of who, how and what influences the strategy.

Alternative Approaches to Strategy Review MCQs In which of the following strategy development approaches where managers focuses on small and flexible decisions? a. b. c. d. Emergent approach. Logical instrumentalism approach Freewheeling opportunism Muddling through

Alternative Approaches to Strategy Review MCQs In which of the following strategy development approaches where managers focuses on small and flexible decisions? a. b. c. d. Emergent approach. Logical instrumentalism approach Freewheeling opportunism Muddling through

Alternative Approaches to Strategy Review MCQs State three advantages of freewheeling opportunism ? a. Increased flexibility to respond to real situations. b. More scope and creativity. c. Ensures goal congruence d. Perceived by managers as dynamic and exciting.

Alternative Approaches to Strategy Review MCQs State three advantages of freewheeling opportunism ? a. Increased flexibility to respond to real situations. b. More scope and creativity. c. Ensures goal congruence d. Perceived by managers as dynamic and exciting.

Alternative Approaches to Strategy Lecture Summary - We have discussed the alternative approaches to strategy development concerning; § Emergent approach § Incremental approach § Freewheeling opportunism § Political approaches

Alternative Approaches to Strategy Development Management Level – Paper E 2 Project and Relationship Management Lecture - 003 Vidya Rajawasam ACMA CGMA MBA