Emergent or Prescriptive There is a fundamental disagreement among strategists regarding how strategic management can be developed.

There are two basic routes: the prescriptive approach and the emergent approach. The prescriptive approach takes the view that the three core areas are linked together sequentially. The emergent approach regards the three core areas as being interrelated. The two approaches have some common elements in the early stages the analysis and the development of a mission for the organisation. Beyond this, they go their separate ways and lead to two different models for the strategic management process. Prescriptive and emergent strategies can be contrasted by adapting Mintzbergs analogy: Prescriptive strategy is Biblical in its approach: it appears at a point in time and is governed by a set of rules, fully formulated and ready to implement. Emergent strategy is Darwinian in its approach: an emerging and changing strategy that survives by adapting as the environment itself changes.

Given the need for an organisation to have a strategy, much of this chapter is really about the process of achieving this strategy. As has been demonstrated, there is no common agreement on the way this can be done. At one extreme, there is the prescriptive process which involves a structured strategic planning system. There is a need to identify objectives, analyse the environment and the resources of the organisation, develop strategy options and select among them. The selected process is then implemented. There are writers who caution against having a system that is too rigid and incapable of taking into account the people element in strategy.

At the other extreme, there is the emergent process that does not identify a final objective with specific strategies to achieve this. It relies on developing strategies whose final outcome may not be known. They will rely more on trial and error and experimentation to achieve the optimal process. In the early part of the twentieth century when industrialisation was proceeding fast, the prescriptive process was the main recommended route. As organisations came to recognize the people element and its importance to strategic development during the middle part of the century, emergent strategies were given greater prominence. In recent years, emphasis has switched between market-based routes and resource-based routes in the development of strategy. Social and cultural issues have also become more important as markets and production have become increasingly global in scale. Within the prescriptive route, four main groups of strategic theory have been identified: the profit maximising, market-based route: the market place is vital to profit delivery; the resource-based route: the resources of the organisation are important in developing strategic management; the game theory route: concentrating on the way that strategic choice is decided and negotiated with others in the market place; the cooperation and network route: this stresses the importance of the formal relationship opportunities that are available to organisations. Each of these has different perspectives on the development of strategy. Within the emergent route, four main groups were also distinguished: the survival-based route: this emphasises the survival of the fittest in the jungle of the market place;the uncertainty-based route: this regards prediction as impossible because of the inherently unstable nature of the environment; the human resource-based route: this places the emphasis on people in strategic development. Motivation, politics, culture and the desires of the individual are all important. Strategy may involve an element of experimentation and learning in order to take into account all these factors; the innovation and knowledge-based route: stresses the contribution of new ideas and ways of radical ways of thinking and sharing knowledge if an organisation is to outsmart its competitors.

The Emergent Approach This view states that corporate strategy emerges, adapting to human needs and continuing to develop over time. It is evolving, incremental and continuing to develop over time. It is evolving, incremental and continuous and therefore cannot be easily or usefully summarised in a plan, which then requires to be implemented. Emergent corporate strategy is a strategy whose final objective is unclear and whose elements are developed during the course of its life, as the strategy proceeds. The emergent approach takes the view that the three core areas are essentially interrelated. However it is usual to regard the analysis area as being distinctive and in advance of the other two elements. Because corporate strategy is then developed by an experimental process that involves trial and error, it is not appropriate to make a clear distinction between the strategy development and

the implementation phases: they are closely linked, one responding to the results obtained by the other. Insert diagram; Emergent strategy In dynamic and turbulent competitive environments detailed planning is problematical. The plans are only as good as any forecasts, which must be uncertain. It can make sense, therefore, not to rely on detailed plans, but instead just plan broad strategies within a clearly defined mission and purpose. Having provided this direction, the strategic leader will allow strategies to emerge in a decentralised organisation structure. Managers will be encouraged and empowered to make changes in their areas of responsibility, and, ideally, rewarded for their initiatives. The implication is that functional changes will impact upon competitive strategies in a positive way as the organisation adapts to its changing environment. Incremental strategy is the improvemental change to intended strategies as they are implemented; adaptive strategy is the introduction of new strategic ideas as new opportunities are spotted. Learning is at the heart of this mode. Managers must learn about new opportunities and threats; they should also learn from the successes and mistakes of other managers. Managers must be willing to take measured risks; for this to happen, understandable mistakes and errors of judgement should not be sanctioned harshly. Change is gradual and comes from experimentation; new strategies involve an element of trial and error. The success of this mode is very dependent upon communications. Managers must know of opportunities and threats facing them; the organisation must be able to synthesise all the changes into a meaningful pattern, and spread learning and best practice. It is quite feasible to find all three modes in evidence simultaneously in an organisation, although, of course, there is likely to be one dominant mode. Moreover, different managers in the same organisation will not necessarily agree on the relative significance of each mode; their perceptions of what is actually happening will vary. Concerns about the Emergent Strategic Process 1. It is entirely unrealistic to expect board members at corporate level to simply sit back and let operating companies potter on as they wish. The HQ consists of experienced managers who have a unified vision of where they wish the group to progress. It may take several steps to arrive at this vision, but the group should make visible progress rather than just muddling along. 2. Resources of the group need to allocated between the demands of different operating companies; this can only be undertaken at the centre. It therefore demands some central strategic overview.

3. It is entirely correct that there are political groups and individuals that need to be persuaded that a strategy is optimal, but to elevate this process to the level of corporate strategy is to abdicate responsibility for the final decisions that need to be taken. 4. In some industries where long time frames are involved for decision making, decisions have to be taken and adhered to or the organisation would become completely muddled. Strategy needs to fixed for lengthy projects. 5. Although the process of strategy selection and choice has to be tempered by what the managers are prepared to accept this does not make it wrong; rational decision making based on evidence has a greater likelihood of success than hunch and personal whim. Thus the debate should take place but be conditioned by evidence and logic. 6. Management control will be simpler and clearer where the basis of the actions to be undertaken are planned in advance 7. The danger is firms become reactive. They do not innovate and create new opportunities, they become complacent.

The Advantages of the Emergent Process It accords with the practice in many organisations It takes account of the people issues-such as motivation It allows the strategy to develop as more is learnt about the strategic situation The role of the implementation is redefined so that it becomes an integral part of the strategy development process It provides the opportunity for the culture and politics of an organisation to be included in the process It delivers the flexibility to respond to changes , especially in fast moving markets

Emergent strategy helps because: It emphasises the importance of flexibility versus competitors It privileges innovation a major source of competitive advantage It seeks out new opportunities rather than encourage a repeat of what was done in the past However, emergent strategy is not the complete answer because: Many companies need some long-term planning Could be chaotic if everything was uncertain and constantly changing chaos leads to low profitability!

See, for example, Ansoffs 1991 critique of emergent strategy in Lynch Chapter 2

The Prescriptive Approach Some commentators have judged corporate strategy to be essentially a linear and rational process, starting with where-we-are-now and then developing new strategies for the future. A prescriptive corporate strategy is one whose objective has been defined in advance and whose main elements have been developed before the strategy commences. The prescriptive approach takes the view that the three core areas- Strategic analysis-strategic development and strategy implementation are linked together sequentially. Thus it is possible to use the analysis area to develop a strategy which is then implemented. The Corporate strategy is prescribed in advance. Insert diagram; The Advantages of the Prescriptive Strategy Process 1. It provides a complete overview of the organisation. 2. The possibility of making a comparison with the defined objectives. 3. A summary of the demands on the resources of the organisation, including people , physical assets, finance and cash flow. 4. A picture of the choices that the organisation may need to make if resources are limited. 5. The possibility for the organisation to monitor the agreed plan as it is implemented, so that it can evaluate the progress that is being made. MAJOR DIFFICULTIES WITH THE PRESCRIPTIVE STRATEGIC PROCESS (Mintzberg Critique) 1. The future can be predicted accurately enough to make rational discussion and choice realistic. 2. It is possible and better to forgo short-term benefit in order to obtain long term good. 3. The strategies proposed are, in practice, logical and capable of being managed in the way proposed. 4. The chief executive has the knowledge and power to choose between options. They do not need to persuade anyone, nor compromise on their decisions.

5. After careful analysis, strategy decisions can be clearly specified, summarised and presented; they do not require further development, nor do they need to be altered because circumstances outside the company change. 6. Implementation is a separate and distinctive phase that only comes after a strategy has been agreed. For example a strategy to close a factory merely requires a management decision and it just happens. This is an extraordinary simplistic in many complex strategic decisions

Summary? We need both prescriptive and emergent processes in strategy development to develop and implement clear and logical plans: prescriptive while, at the same time, experimenting with other possible strategies: emergent What does this mean in practice? most companies will have some form of prescriptive plan with objectives, strategies and implementation issues like costs and timetables some, but not all, companies will also take a a more emergent approach with some additional resources devoted to new ideas, where the outcome is fuzzy and experimental with no guarantee of success

More Theory Strategy Safari A Guided Tour Through the Wilds of Strategic Management
Strategy Safari A Guided Tour Through the Wilds of Strategic Management by Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel The Free Press, New York, 1998 ISBN 0-684-84743-4 Using the analogy of the blind men trying to describe an elephant (remember the story where the one feeling its tail thought it was like a rope, the one feeling its leg thought it was like a tree, the one feeling its tusk thought it was like a spear, etc.) Mintzberg, Ahlstrand and Lampel discuss various approaches to strategic planning. They identify 10 different schools of thought, and describe in chapters devoted to each, its history and origins, basic concepts, applications, advantages and disadvantages, and situations in which that approach to strategic planning may be appropriate. At the outset of the book, in attempting to define this amorphous beast, they outline what they call 'the 5 P's of strategy', which are really five different ways of thinking about the essential characteristics of strategic planning. These are: 1) strategy as a plan a guide for a course of action, a path from a current state to a desired future end state 2) strategy as a pattern "...that is, a consistency of behavior over time. A company that perpetually markets the most expensive products in its industry pursues what is commonly known as a high-end strategy, just as a person who always accepts the most challenging of jobs may be described as pursuing a high-risk strategy." (p.9) 3) strategy as position the location of particular products in particular markets. 4) strategy as perspective "in Peter Drucker's memorable phrase, this is the "theory of the business" (p.13) it represents strategy as a particular philosophy of the business in terms of interacting with the customer, or the way(s) in which goods or services are supplied. 5) strategy as a ploy under this definition, strategy is a means of gaining market share through a specific maneuver, designed to outwit a competitor or opponent.

The authors also discuss at the outset of the book the pros and cons of the various reasons why strategic planning has been thought to be beneficial in an organization. These are: - strategy sets direction while this is clearly beneficial, the danger is that the blinders that a strategic plan can impose upon an organization can make it difficult to appreciate new opportunities and possibilities as they arise - strategy focuses effort true, but the downside risk is that managers within an organization can get locked into a particular form of "groupthink", again missing out on potential new opportunities - strategy defines the organization again true to some extent, but the danger here is that the rich diversity inherent within the organization can get overlooked or lost by an overly simplistic stereotype of "what the organization is all about"

- strategy provides consistency assuredly important, but consistency for consistency's sake, without having a clear market-oriented reason for this, is the obvious danger here

So it is apparent that the authors do not necessarily regard strategic planning as a good thing in all cases; they clearly indicate that there are dangers that an overly rational or overly rigorous approach can pose. The core of the book is a detailed description of each of the 10 schools. They differentiate between two categories in this regard: the prescriptive schools, which attempt to identify directions for action on the part of the company based on an assessment of its current situation and that of the environment within which it operates, and the descriptive schools, which simply attempt to understand the historical reasons why a given company is where it is at a particular point in time. The 10 schools are listed below; the accompanying chart (click here) provides further details on each:

Prescriptive Schools 1) Design School: This approach regards strategy formation as a process of conception, matching the internal situation of the organization to the external situation of the environment. Thus the strategy of the organization is designed to represent the best possible fit. 2) Planning School: Here strategy formation is seen as a formal process, which follows a rigorous set of steps from analysis of the situation to the development and exploration of various alternative scenarios. 3) Positioning School: Under this approach, which is very heavily influenced by the works of Michael Porter, strategy formation as an analytical process placing the business within the context of the industry that it is in, and looking at how the organization can improve its competitive positioning within that industry.

Descriptive Schools 4) Entrepreneurial School: This approach regards strategy formation as a visionary process, taking place within the mind of the charismatic founder or leader of an organization. 5) Cognitive School: This approach, based upon the science of brain functioning, regards strategy formation as a mental process, and analyzes how people perceive patterns and process information. 6) Learning School: This school of thought regards strategy formation as an emergent process, where the management of an organization pays close attention to what works and doesn't work over time, and incorporates these 'lessons learned' into their overall plan of action. 7) Power School: Here strategy development is seen to be a process of negotiation between power holders within the company, and/or between the company and external stakeholders.

8) Cultural School: This approach views strategy formation as a collective process involving various groups and departments within the company; the strategy developed is thus a reflection of the corporate culture of the organization. 9) Environmental School: Here strategy formation is seen to be a reactive process: a response to the challenges imposed by the external environment. 10) Configuration School: In this final approach, the purpose of strategy formation is seen as a process of transforming the organization from one type of decision-making structure into another. In each of these schools, the process of strategy formulation itself is regarded as something of a "black box" none of them are able to clearly describe how an individual or group is able to leap from the collection and analysis of information, to the conceptualization of alternative courses of action (although they do concede that the cognitive school comes closest). Overall, the authors appear to prefer the 'learning school' (they are teachers, after all), because of the emphasis that it places on an organization incorporating input from its environment, and adapting over time. In the final analysis, just as none of the blind men's descriptions of the elephant was completely adequate, yet each contained elements of truth, none of these 10 approaches is complete in and of itself, either. Each offers some useful concepts, and some strong points to aid understanding, but has its disadvantages as well (again, see the chart). As well as providing a useful illumination of the origins and characteristics of the different schools of thought, Strategy Safari also makes for a very enjoyable and entertaining read. Mintzberg et.al. have done an excellent good job of taking a difficult and potentially deadly boring subject and rendering it interesting. The book is highly recommended for anyone embarking upon, or engaging in, a strategic planning process.

http://www.bizsum.com/strategysafari.htm

Summary Viewing the evolution of strategic management as ten "schools" of practice, Mintzberg and Lampel (2005) explore whether these perspectives represent fundamentally different processes of strategy making or different parts of the same process. Unwilling to be constrained by either definition, the authors point out that some schools clearly are stages or aspects of the strategy formation process. Under certain circumstances, such as during start-up or under dynamic conditions when prediction seems impossible, the process may tilt toward the attributes of one school or another. Thus, identifiable stages and periods exist in making strategy not in any absolute sense, but as recognizable tendencies. Despite this, the inclination has been to favor the interpretation that the schools represent fundamentally different processes.

Discussion Group Questions 1. What is "strategy"? What are some possible different definitions/interpretations of the word? What do you think might be the key influences that have shaped your personal definition/understanding of strategy? (Chapter 1, pages 9-15)

2. Strategy Safari has identified 10 different schools of thought on strategy formation (the Design, Planning, Positioning, Entrepreneurial, Cognitive, Learning, Power, Cultural, Environmental, and Configurational Schools). Each school looks at strategy in different ways and provides different insights on the construct. Can you develop one word and one sentence definitions of strategy in accordance with each of these ten schools of thought? (page 5 and rest of the book) 3. Why has the Design School and the basic SWOT model been so long lasting and resilient? In what ways has the Design School influenced the other schools of thought identified in Strategy Safari? (pages 42-45) 4. In what ways do the "descriptive schools" of strategic management (the Entrepreneurial, Cognitive, Learning, Power, Cultural, Environmental, and Configurational Schools) have more to offer the practitioner than the "prescriptive schools (Design, Planning, and Positioning Schools)? (See Context and Contribution section of each chapter) 5. What are some limitations/problems with highly formalized strategic planning? (pages 63-67) 6. Why is it better to "learn" than to "plan"? (pages 176-321) 7. Which of the strategy schools are most alike? Which are most unlike? 8. Which of the ten schools of thought have you come across as a manager and practitioner? Do you agree with the assessment of these schools laid out in Strategy Safari? (See Critique and Context and Contribution section at the conclusion of each chapter)

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