Deliberate versus Emergent Strategy PDF

Preview

Summary

Deliberate versus Emergent Strategy Strategy can be defined as an action plan crafted to attain a main goal, a deliberately set path to reach a given point (Oxford, n.d.; Clausen 2003). Bodwell & Chermack (2010) note that there is a typical set of criteria involved in any given strategy; Corporate o...

Description

Strategic Management Tools DT 365/4 Assignment 2: Deliberate versus Emergent Strategy Submission Date: Sunday 5th November Word Count: 1099 Group #2 Group Name: Gold Fast Consulting

Group Members Clarke, Lorcan C13401252 Carew, Emily C13569177 Darker, Ciara C13750371 d’Estelle-Roe, Marcus C14420098 Hogan, Ben C13363696

1

Table of contents

Page number

Summary

3

Critique

4

Example

5

Cross reference

6

Reference list

7

2

Summary Strategy can be defined as an action plan crafted to attain a main goal, a deliberately set path to reach a given point (Oxford, n.d.; Clausen 2003). Bodwell & Chermack (2010) note that there is a typical set of criteria involved in any given strategy; Corporate objectives, a vision and a clear method to materialise the vision and attain the objectives.

Two concepts of strategy are practiced in business. The Deliberate Strategy by Porter and the Emergent Strategy by Mintzberg (Porter, 1980). The deliberate strategy is planned with an intended course of action (Mintzberg & Waters, 1985). Rabener (2005) adds that deliberate strategies are intended by top management. Emergent strategy evolves with an unclear aim that appears in time (Capon, 2008). It can be described as ‘unplanned responses to unplanned circumstances’ (Hill, Jones, & Schilling, 2013, p.22). The idea is that from practise, strategy emerges in a spontaneous way (Neugebauer, Figge, & Hahn, 2016) Fogg (1994) supports this, adding that strategy should act as a source of inspiration with long term perspectives in mind. Many strategies contain attributes of both deliberate and emergent strategies and therefore are fittingly named ‘deliberately emergent’ (Mintzberg & Waters, 1985).

The popularity of deliberate strategy peaked from the 1950s to the 1980s, however, these strategies were rigid and difficulty spotting opportunities was an issue (Goold & Quinn, 1990). Firms today require a degree of flexibility in order to capitalize on new opportunities. This is why many organisations’ strategy will feature deliberate and emergents. Johnson (2004, p.3) notes that devising a strategy is simple, the challenge is putting it into practice ‘effectively’.

Wooldridge & Floyd (1990, p.239) suggests that planned and deliberate strategies work better within ‘predictable and stable environments’. Conversely (Brews & Hunt, 1999) found that in an unsteady domain, emergent strategies are better suited.

3

Critique Wiesner & Millett (2012) remark that deliberate strategy firms generally have a written business plan and mission statement. This results in a clear purpose and goal with less confusion (Mintzberg & Waters, 1985). Chia & MacKay (2007) also concur that it provides a practical and measurable guide to action. Employees more easily understand the firm’s objectives and work towards a common goal. However, sticking rigidly to a deliberate strategy, with its stiff management structure results in less flexibility and potentially missed opportunities that could have been capitalised on.

Mintzberg & Waters (1985) note how the ability to react swiftly to new opportunities or threats in the business world is a benefit of emergent strategies. It essentially drives the firm to supply what the market desires, as opposed to what the top management think it wants. Potential arises to get caught up in too many projects losing sense of direction and identity as a business (Fuller & Cooper, 2000). Maguire & Mirabeau (2014) further elaborate that performance evaluation can be difficult with emergent strategies and of the damages it can do to a company if a bad route is taken. It can also be difficult to distinguish how relevant these strategies are to the organisations objectives. Conversely, Hrebiniak (2006) takes a conventional outlook as he believes it is best to find the most appropriate way to implement a strategy, rather than considering the emergent approach. We oppose Hrebiniak’s belief as we feel it is imperative that organisations embrace emergent strategies should they arise, rather than risk losing out on a potentially lucrative opportunity.

Mintzberg & Waters (1985) remarks that purely deliberate strategies are as rare as purely emergent ones. It seems most benefits are derived from crafting a strategy with elements of both. Wiesner & Millett (2012) note that a mix of strategies can result in the achievement of deliberate objectives as well as positive unforeseen outcomes. Eden & Ackermann (2013) concur that benefits from a mixed strategy include flexibility and opportunism thus giving the firm increased ability to achieve its objectives while at the same time not missing out on opportunities.

4

Example To illustrate this tool at work we look at Amazon, a firm that is ‘deliberate’ in all its actions (Rao, 2011). Amazon’s mission statement is ‘our vision is to be Earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online’ (Amazon, n.d. - a).

In 1999 when after noticing eBay.com’s high performance with online auctioning Amazon.com decided to introduce an auction feature (Amazon, n.d. - b). Ritala, Golnam, & Wegmann (2014) note how coopetition (cooperative competition) has been a strong emergent element of Amazon.com’s strategy. CEO Jeff Bezos, as cited in (Johnson, 2010) said how the addition of third party sellers to Amazon.com led to huge increases in product selection for the customers. This is in line with their vision of providing a site where people can buy anything they need. The emergent element is not seeing only one way of getting there.

Bernstein & Barrett (2011) remark on how Amazon’s failed video download service: UNBOX in 2006 led the development of the Kindle. Amazon recognised the implementation of emergent strategies would prove hugely successful for their organisation. They give their staff room to grow and offer ideas to develop (Gray & Vander Wal, 2012). The emergent side of Amazon’s strategy can be seen through their culture; how resources are not being allocated from the top and staff rigidly being instructed what to do (Gray & Vander Wal, 2012). Ideas such as Kindle and Amazon Prime were birthed through emergent strategy. Although Amazon’s main goal was to be the largest online retailer, they capitalised on multiple different opportunities along the way which would not have been possible if they were sticking rigidly to a pure deliberate strategy.

5

Cross Reference: Tool 2 - Setting Long Term Goals Within the foundations of every company’s strategy, are the established long-term goals (Evans, 2014). In other words; to begin developing its strategy, a business must first identify what it aims to be in the long-run.

Amazon has a long run strategy whereby low prices are charged for books, with the goal of creating value & building trust among customers. Since day-one Jeff Bezos has regarded growth to be of more importance than profitability, and this is evident within Amazon’s business plan which accounted for the first 5 years of operations being unprofitable (Reimers & Waldfogel, 2017).

Zwilling (2015) recommends setting fewer goals, so focus can be narrowed, increasing the likelihood of succeeding. When the long run goals are established the company can then create objectives which relate to the company’s aim as with a deliberate strategy, or allow them to unfold over time as with an emergent strategy.

6

References list Amazon. (n.d.-a). (1) Amazon.com - About. Retrieved 3 November 2017, from https://www.facebook.com/pg/Amazon/about/ Amazon. (n.d.-b). About Amazon - Innovations - Marketplace. Retrieved 3 November 2017, from https://www.amazon.com/p/feature/h8h67udej7399n5 Bernstein, E., & Barrett, F. (2011). Strategic Change and the Jazz Mindset : Exploring Practices that Enhance Dynamic Capabilities for Organizational Improvisation. Research in Organizational Change and Development (Vol. 19). Emerald Group Publishing Ltd. Bodwell, W. & Chermack, T.J. (2010) Organizational ambidexterity: Integrating deliberate and emergent strategy with scenario planning. Technological Forecasting and Social Change. 77(2) 193-202 Brews, P. J., & Hunt, M. R. (1999). Learning to Plan and Planning to Learn : Resolving the Planning School/Learning Debate. Strategic Management Journal, 20(10), 889–913. Capon, C. (2008). Understanding Strategic Management. Pearson Education Ltd. Chia, R., & MacKay, B. (2007). Post-processual challenges for the emerging strategy-as-practice perspective: Discovering strategy in the logic of practice. Human Relations, 60(1), 217–242. Clausen, L. (2003). Global news production. Copenhagen Business School. 1st ed.

Fogg, D C. (1999) Implementing Your Strategic Plan. New York. AMACOM American Management Association Eden, C., & Ackermann, F. (2013). Making Strategy: The Journey of Strategic Management. SAGE Publications.

7

Fuller, N., & Cooper, J. (2000). Deliberate versus emergent strategies: a case study of information technology in the Post Office. International Journal of Information Management, 20(3), 209–223. Goold, M. & Quinn, J.J. (1990). The paradox of strategic controls. Strategic Management Journal. 11: 43-57

Gray, D. & Vander Wal, T (2012) The Connected Company. O’Reilly Media inc Hill, C. L., Jones, G. R., & Schilling, M. A. (2013). Strategic Management Theory: An Integrated Approach (11th ed.). Hrebiniak, L.G. ( 2006) Obstacles to effective strategy implementation. Organisational Dynamics. 35(1) 12–31

Johnson, L.K. (2004). Execute your strategy—without killing it. Harvard Management Update. 9(12) 3–6.

Johnson, M. W. (2010). Seizing the White Space: Business Model Innovation for Growth and Renewal. Harvard Business Press.

Kopman, J., Kock, A., Killen, C.P., Gemunden, H.P. (2017) The role of project portfolio management in fostering both deliberate and emergent strategy

Maguire, S., & Mirabeau, L. (2014). From Autonomous Strategic Behaviour to Emergent Strategy. Strategic Management Journal, 35(2), 1202–1229. Mintzberg, H. & Lampel, J. (1999) Reflecting on the strategy process. Sloan Management Review. 40(3) 21-30

Mintzberg, H. & Waters, J.A. (1985) “Of Strategies, deliberate and emergent” Strategic Management Journal, 6(3), 257-272.

8

Neugebauer, F., Figge, F., & Hahn, T. (2016). Planned or Emergent Strategy Making? Exploring the Formation of Corporate Sustainability Strategies. Business Strategy and the Environment, 25(5), 323–336 Oxford. (n.d.). Definition of strategy in English by Oxford Dictionaries. Retrieved October 26, 2017, from https://en.oxforddictionaries.com/definition/strategy Porter, M. E. (1980). Competitive Strategy: Techniques for analyzing industries and companies. New York. New York: Free Press. Rabener, N. (2005). Corporate Management of Diversified Companies. Diplom. Rao, V. (2011). Why Amazon is the Best Strategic Player in Tech. Forbes. Retrieved October 31 from https://www.forbes.com/sites/venkateshrao/2011/12/14/the-amazonplaybook/2/#55bb58513b30 Reimers, I. & Waldfogel, J. (2017). Throwing the Books at Them: Amazon’s Puzzling Long Run Pricing Strategy. Southern Economic Journal, 83(4), 869-885. Ritala, P., Golnam, A., & Wegmann, A. (2014). Coopetition-based business models: The case of Amazon.com. Industrial Marketing Management, 43(2), 236–249. Weigl, T. (2008). Strategy, Structure and Performance in a Transition Economy: an Institutional Perspective on Configurations in Russia (1st ed.). Gabler. Wiesner, R., & Millett, B. (2012). Strategic approaches in Australian SMEs: Deliberate or emergent? Journal of Management & Organization, 18(1), 98–122. Wooldridge, B., & Floyd, S. W. (1990). The Strategy Process, Middle Management Involvement and Organizational Performance. Strategic Management Journal, 1(June 1989), 231–241. Zwilling, M. (2015, February 1). 6 Ways Businesses Win by Doing Fewer Things Better. Retrieved from: https://www.forbes.com/sites/martinzwilling/2015/02/01/6-ways-businesseswin-by-doing-fewer-things-better/#767e00373764

9...