STRATEGY Process, Content, Context Chapter 3 Strategy Formation

Agenda The Issue of Realized Strategy Strategy Formation Activities Strategy Activity Roles The Paradox of Deliberateness and Emergence The Demand for Deliberate Strategizing The Demand for Strategy Emergence Perspectives on Strategy Formation The Strategic Planning Perspective The Strategic Incrementalism Perspective The Debate and Readings

Realized Strategy Strategy Formation Activities and Roles The issue of realized strategy How can a successful course of action be realized in practice? Strategy formation activities What are the elements of the strategic reasoning process? Strategy formation roles How will the strategy formation activities be carried out? Top vs. middle vs. bottom roles Line vs. staff roles Internal vs. external roles

Realized Strategy Strategy Formation Activities

Realized Strategy Strategy Formation Roles Top vs. middle vs. bottom roles How much empowerment of middle and lower levels is beneficial for the organization? Line vs. staff roles Which of this two groups should be responsible for the strategy formation process? Internal vs. external roles Should the strategy formation activities be carried out by members of the organization or should they be outsourced?

II. Deliberateness vs. Emergence Deliberate and Emergent Strategy

Deliberate Strategizing Pressures Direction Without plans and objectives organizations would be adrift Commitment Plans enable early commitment to a course of action Coordination Plans have the benefit of coordinating all strategic initiatives within a firm to cohesive pattern Optimization Plans facilitate optimal resource allocation Programming Plans are a means for programming all organizational activities in advance

Strategy Emergence Advantages Opportunism Organizations must keep an open mind to grab unforeseen opportunities Flexibility Organizations must keep their options open and not commit themselves to early Learning The best way to find out what works is to give it a try Entrepreneurship Different people in the firm will have different ideas Support Getting things done in firms includes understanding political and cultural dynamics

Deliberateness and Emergence Dealing with the Paradox Deliberate Strategizing The ability of acting intentionally; so thinking before acting Strategy Emergence The ability of thinking and acting at the same time and letting strategy emerge

III. Overview of the Perspectives Strategic Planning vs III. Overview of the Perspectives Strategic Planning vs. Strategic Incrementalism STRATEGIC PLANNING PERSPECTIVE Deliberateness over emergence Intentionally designed Figuring out Forecast and anticipate Make commitments, prepare Formally structured and comprehensive First think, then act Hierarchical Optimal resource allocation and coordination Programming Implemented top-down STRATEGIC INCREMENTALISM PERSPECTIVE Emergence over deliberateness Gradually shaped Finding out Partially unknown and unpredictable Postpone commitments, stay flexible Unstructured and fragmented Thing and acting intertwined Dispersed Experimentation and parallel initiatives Learning Requires broad cultural and cognitive shifts