CHAPTER 6: STRATEGY-MAKING PROCESS

(Lovely’s part)
Deliberate Versus Emergent Strategies
Imagine a company is like a ship sailing towards a destination. The managers are like the captains
of the ship, guiding its course. But just like a ship can be influenced by winds and currents, a
company's direction can also be influenced by other factors.

Now, there are two main ways a company's strategy can come about:

Deliberate strategy: This is like the captain of the ship planning out the route beforehand. The
managers carefully think about where they want the company to go and make a detailed plan to get
there. It's like a well-thought-out roadmap.

Emergent strategy: This is more like the captain adjusting the ship's course based on unexpected
changes in the environment. Sometimes, despite all the planning, things don't go as expected. In
emergent strategy, the direction of the company evolves over time based on new information,
opportunities, or challenges that arise along the way. It's more flexible and adaptive.

The Rational Dimension of Strategy

Early rational models of strategy proposed that managers could logically plan strategies before
implementation. However, subsequent models by Quinn and Mintzberg and Waters acknowledged
managers' limitations in comprehending and predicting their environments. This suggests that
while managers aim to formulate strategies rationally, they must recognize the inherent
imperfections in their understanding and adapt their strategies accordingly.

Quinn Model (Logical Incrementalism):

-The Quinn model, also known as logical incrementalism, proposes that strategic decisions are
made gradually over time through a series of small, logical steps.
-It suggests that managers continuously gather information, assess the situation, and make
incremental adjustments to their strategies as needed.
-This approach emphasizes flexibility and responsiveness to changes in the business environment,
allowing organizations to adapt more effectively.

Umbrella Strategy (Mintzberg and Waters):

-The umbrella strategy, proposed by Mintzberg and Waters, describes a broad, overarching
approach to strategy that accommodates various sub-strategies within it.
-Instead of a single, detailed plan, the umbrella strategy provides a general framework or direction
under which different strategies can operate.

Strategy creation preceding strategy implementation

Design School:
-Originating in the 1950s, the Design School is considered the cornerstone of modern strategic
management.
-It places strategy conceptualization primarily in the hands of senior managers, particularly the
chief executive.
-The focus is on simplicity and clarity in strategy formulation, with the aim of making it easily
understandable.
Planning School:
-The Planning School emphasizes strategy development through meticulous analysis and planning.
-Early models assumed that strategies could be crafted with certainty in environments where all
relevant information was available and fully understood.
-It operated under the assumption that the environment could be comprehended completely,
enabling the creation of strategic plans based on this complete knowledge.

(Anjely’s part)

(Micah’s part)
6. Unconnected strategies happen when individuals in an organization pursue their own goals
without alignment. In contrast, coherent strategies emerge when people intentionally work
together, often because they share similar training, standards, and organizational goals. This
alignment creates a unified approach towards achieving objectives.
7. Consensus strategies form when individuals in an organization consistently negotiate and
compromise, making trade-offs to reach agreements. These strategies arise from collective
consensus and alignment of goals among the involved parties, reflecting a unified approach shaped
by mutual adjustments and compromises.
8. Imposed strategies are introduced from external sources, either directly through the explicit
imposition of directives from external entities or indirectly through limitations on managerial
decisions. In essence, these strategies are dictated by outside forces, whether through explicit
instructions or constraints that restrict the choices available to managers within the organization.

The environmentally determined dimension of strategy formation

We can discuss environmentally determined strategy in two ways:
1. Past choice constrained strategy.
The past choice constrained strategy in strategic business analysis involves recognizing how
previous decisions shape the framework for current decision-making. It requires evaluating the
impact and limitations of past choices to guide present strategies, acknowledging that some options
may be restricted due to past actions. This approach aims to optimize outcomes within these
constraints by leveraging insights from past decisions to inform current ones effectively.

2. Externally Imposed Strategy

Externally imposed strategies are strategic plans or directives dictated to a business from external
sources, rather than being internally developed. These sources can include government regulations,
industry norms, legal mandates, or demands from stakeholders like investors or partners. Adapting
to these strategies is crucial for compliance, reputation maintenance, and sometimes competitive
edge, although they can also present obstacles requiring resource allocation and operational
adjustments. Successful businesses integrate these strategies into their overall planning and
operations.

The political and cultural dimensions of strategy formation

Pettigrew (l973) Pettigrew's perspective revolves around the idea that power dynamics play a
significant role in decision-making within organizations. He suggests that managers may engage in
political tactics to advance organizational goals if it aligns with what they perceive as the best
strategy for themselves. Similarly, organizational politics, if approached rationally, can lead to
optimal solutions being produced. Essentially, Pettigrew argues that understanding and leveraging
power dynamics can be rational and beneficial in achieving organizational objectives, even if it
involves engaging in political behavior.

Allison (1971) Allison highlights that decisions perceived as irrational from an organizational
standpoint may actually be rational when viewed from the perspective of individuals or specific
groups within the organization. This suggests that the political context surrounding decisions plays
a crucial role in determining organizational rationality. In other words, what may appear illogical
at an organizational level can make sense when considering the interests and dynamics of
individuals or groups involved, emphasizing the significance of politics in understanding
organizational rationality. Prahalad and Bettis ( 1986 ) Prahalad and Bettis propose that strategic
decision-making is heavily influenced by the political and cultural environment. They suggest that
organizations develop dominant logics based on the mental frameworks shaped by their core
business. While these logics can contribute to an organization's success, there's a risk of
management becoming entrenched in outdated beliefs that don't adapt to evolving circumstances.
This disconnect often occurs because managers' perceptions evolve more slowly than the changing
environment, leading to misalignments between organizational strategies and external realities.

Cultural Web
Johnson's concept of the 'cultural web', as depicted in Figure 6.1, is valuable because it
comprehensively identifies and differentiates the elements that might limit managers' perspectives.
By highlighting various factors such as symbols, rituals, stories, and power structures within an
organization, the cultural web provides a framework for understanding the influences that shape
managerial perceptions and behaviors. This understanding is crucial for recognizing and
addressing constraints that may hinder effective decision-making and organizational change.

(Janecel’s part)
Rituals and routines
They build relationships, clarify roles, and create structure, while externally, especially in service
sectors, they inform customers about service standards and control the customer experience to
ensure satisfaction and efficiency. For example: In a retail store, the standardized greeting and
assistance protocols for customers not only establish rapport between staff and shoppers but also
ensure a consistent and pleasant shopping experience.

Stories
This told within an organization are like colorful snapshots that show what’s important to that
organization. They include tales of success, lessons learned from challenges, and stories about
people who are seen as role models or examples of behavior. These stories help everyone in the
organization understand what matters most and how they should act.

Symbols
These representations of power are like symbols that show someone’s status or authority.
Examples can include fancy company cars, big and fancy offices, uniforms, and special badges
that indicate someone’s position in the organization.

Power Structure
Power can come from owning stuff, being part of a respected group, or controlling valuable things.
For example, doctors in hospitals have power because of their skills, and big investors in
companies have power because they own a lot of shares. Also, professors in universities and
experts in research companies can have power because of their knowledge and influence.
Control system
Organizations use rewards and punishments to influence how their members behave. Rewards, like
bonuses or praise, encourage desired actions, while punishments deter unwanted behavior. During
major changes, adjusting these systems becomes crucial to align with new goals or ways of
working.

Organizational structure
An organization’s structure is like a blueprint that helps people work together better. It includes
how people are organized, how they communicate, and what’s most important to the organization.
This structure also shows who has power and what things the organization focuses on controlling
to be successful.

(Bianca’s part)
Integrative frameworks: Strategy-making as a complex amalgam of different
process:
The topic discusses different models of strategy formation processes. It identifies two main types:
deliberate strategy, which involves careful planning and analysis, and emergent strategy, which
forms in a less planned manner. Several dimensions of strategy formation are also examined,
including rational planning models as well as politically and culturally influenced strategies. Later
sections evaluate different approaches like logical incrementalism that combine deliberate and
emergent strategy characteristics.

Linear is the simplest form of strategic management, where an organization is engaged in basic
rational decision-making processes

Adaptive strategy is about changing what you do, but interpretive strategy is about changing how
you think and how you see yourself (and in so doing changing how others see you).

Hart focuses sa mga upper part ng organization kung paano sila kukumbisihin sa pag gawa nang
diskarte while bailey and Johnson nilarawaan nila ang kanila pagpapaliwanag nang diskarte gamit
ang mga dimensions, and sa loob nant dimension na yon andun yung mga makakatulong sa pag
explain nang strategy

HART
1. COMMAND - Kung saan ang chief-executive at ilang senior managers magpasya ng diskarte
2. SYMBOLIC - Kung saan ang diskarte ay driven q mission and vission in the future
3. RATIONAL - kung saan ang strategy driven by formal structure and planning systems.
4.TRANSACTIVE - Where strategy is made on an iterative basis involving managers and staff in
an ongoing dialogue.
5. GENERATIVE - Where most people in the organization are prepared to use their initiative.
People are encouraged to experiment with innovative approaches.

Organization members understand what the organization needs to achieve if its co prosper.
1. Planning - dominated organizations have a shared vision and mission statement, well-defined
goals, and exact plans that outline the intended course of action and how it will be carried out
2. Rational commnad - A senior individual or group controls the process of developing strategies
in logical command organizations by employing a planning framework.
3. Logical Incrementalism - a procedure that includes missions and goals; while goals are
planned, organizations are hesitant to set them in stone because circumstances change
4. Muddling Through - This configuration is dominated by incremental, cultural, and political
dimensions. Players advance by negotiating for their own specific goals within a framework
founded on history and a thorough comprehension of What's permitted and what's not outcomes
that are not only due to reactive modifications to adapt to a changing environment, but additionally
because of cultural and political factors resisting meaningful change
5. Externally Dependent - In this case, the organization's external forces are imposing the
strategy. Those who are able to relate to and comprehend influential external players are likely to
hold the authority to change external influences. This is a common scenario in which one
organization is subordinate to another
6. Embattled Command - As the name implies, this describes circumstances in which a leader is
tasked with rescuing a failing organization. It frequently appears in smaller businesses in unstable
settings and failing subsidiaries where a new CEO is thrown in to turn things around. In the public
sector, embattled leadership has also increased in frequency, as failing hospitals and schools are
garnering widespread media attention.