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Emergent strategies


 
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Emergent strategies

An intended strategy could be defined as 'a strategy whose objectives had been defined in advance and whose main elements had been developed before the strategy commenced.

It is a formal, planned systematic approach to strategy formulation and implementation.

Several theorists have recognised a problem with this static model: it is not how it is done in real life. They believe that strategy is actually a dynamic and interactive process. Henry Mintzberg made a distinction between deliberate strategy and emergent strategy.

Planned strategies

As discussed here, the rational approach involves the following steps.

(1)Strategic analysis.

(2)Strategic choice.

(3)Strategic implementation.

For intended strategies one would expect each stage to be completed before the next starts.

The benefits of a strategic planning system are as follows:

  • it can provide a structured means of analysis and thinking about complex strategic problems
  • managers will be required to question and challenge the received wisdom they take for granted
  • it can encourage a longer-term view of strategy than might otherwise occur
  • it can be used as a means of control by regularly reviewing performance and progress against agreed objectives or previously agreed strategic direction
  • it can be a useful means of co-ordination e.g., by bringing together the various SBU strategies within an overall corporate strategy, or ensuring that resources within a business are co-ordinated to put the strategy into effect;
  • it may help to communicate the intended strategy
  • it can be used as a way of involving people in strategy development, therefore perhaps helping to create ownership of the strategy.

Emergent strategies

An emergent strategy is a set of actions that is consistent over time, has not been stated in a formal plan and has developed or emerged outside the formal plan and between planning reviews.

Patterns of strategy development

Mintzberg argues that strategy emerges over time as intentions collide with and accommodate a changing reality, rather than being due to a deliberate planning process.

This emergent strategy would be one that arises from an external stimulus not envisaged in the planned strategy.

For example, a supplier pursuing modern ideas on supplier/customer relationships might encourage a partnership approach to sourcing. It is easy to imagine that buyers in the customer organisation might see benefits in this, and could pursue the idea to the point where sourcing strategy took on an aspect not at all contemplated when planned strategic developments were laid down.

Mintzberg also believes that few strategies are purely deliberate or purely emergent but a mixture of the two:

  • one means no control the other means no learning
  • most strategies are a mixture of both to exercise control while fostering learning
  • strategies have to form as well as be formulated.

Strategic innovation

Strategic innovation is the creation of growth strategies, new product categories, services or business models that change the game and generate significant new value for consumers, customers and the organisation.

Mintzberg and others are of the opinion that deliberate strategy focuses on control, while emergent strategy emphasises learning - there are many different ways that organisations can learn to add value to their product or service through areas such as process redesign and e-business.

Realised and unrealised strategies

When planned strategies are not realised it is often because events develop in unexpected ways:

  • the organisation's underlying assumptions turn out to be invalid
  • the pace of development overtakes it
  • changes in the organisation's external environment, e.g. changes in the market for the goods and services that the firm produces and in the nature of the competition facing the company
  • the organisation's internal environment changes.

The rational strategic planning process has also been criticised because it ignores the effects of:

  • cultural influences in maintaining strategic stability and sometimes resisting strategic change
  • the power structure within the organisation
  • the effect of politics and the relative influence on the decision-making of different individuals and groups.

Overall, this can mean that an organisation's actual or realised strategy can be very different from the original planned or designed strategy.

Strategic drift

Strategic drift describes a situation where the organisation's strategy gradually, if imperceptibly, moves away from the forces at work in its environment.

Over time, organisations will have to deal with many different types of change and it is important that these changes are managed effectively.

  • The organisation takes a series of logical, incremental steps that were part of its plan to change ahead of the market and develop a competitive advantage.
  • The rate of change in the market place speeds up, and the firm's incrementalist approach is not enough to maintain its advantage, and it is left behind.
  • Faced with a stimulus for action, managers may seek to extend the market for their business, but may assume that it will be similar to their existing market, and therefore set about managing the new venture in much the same way as they have been used to.
  • If this is not successful, strategy development is likely to go into a state of flux, with no clear direction, further damaging performance.
  • Eventually transformational change is required if the demise of the organisation is to be avoided. Transformational change tends to occur when performance has fallen off significantly, i.e. in times of crisis.
Created at 10/10/2012 1:39 PM  by System Account  (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London
Last modified at 9/11/2013 12:26 PM  by System Account  (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London

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ACCAPEDIA - Emergent strategies