Tuesday, July 5, 2011

Strategic Planning: Shaping Organisational Action or Emerging from Organisational Action?

I. Introduction

Despite the fact that strategic planning has experienced an identity crisis in its historical development (Brock & Barry, 2003), today it has grown to be an accepted practice performed by most leading managers and leaders. The growing of empirical research revealing the potential benefits of applying strategic planning may be the main rationale of this growing optimism. In addition, the increased uncertainties and challenges facing organisations has called leaders to think and act more strategically and well-planned than ever (Bryson, 2004). At the conceptual level, however, there is still discrepancy whether strategy planning should be generated deliberately through a formal procedure or informally emerge contingent upon the changing situation surrounding the organisation (Glaister & Falshaw, 1999).

This paper will argue that strategy planning should be carried out and developed both intentionally in order to shape a clear direction for organisational action and incindentally in order to respond turbulent environments and emerging challenges without which the organisation will undergo difficulties in achieving its desired objectives. Foremost, the paper will discuss the conceptual definition and anticipated benefits of strategic planning. Afterwards, it will elucidate how strategy making takes place in most organisations and then draw attention to the theoretical background of both deliberate and emergent strategy, followed by discussion and conclusion.

II. The Conceptual Definition and Anticipated Benefits

Strategic planning was firstly introduced to the public sector around 1980s and education in early 1970s which was restrictedly utilised in universities and colleges. Traditional planning is much input oriented, routine-based, rigid, and emphasises on plan document while strategic planning is driven by outcomes, changing environment and is flexible with main focus on the implementation that is substantially contradicting to its past counterpart (IEEP, 2010). In line with these characteristics, Bryson (2004) succinctly defines strategic planning as “a disciplined effort to produce fundamental decisions and actions that shape and guide what an organisation or other entity is, what it does, and why it does it” (p.6). It also considers relevant internal and external environmental variable as the basis of the process (Ugboro et. al., 2011).

In detail, Glaister and Falshaw, (1999) see strategy planning as the process of formulating the organisational mission, major desired objectives, strategies, and policies that control the acquisition and provision of resources to achieve the designated organisational goals. The process involves identification of future opportunities to be exploited, threats that must be avoided or neutralized, evaluation of organizational strengths and weaknesses, and the creation of control systems to ensure that the organization remains on course to achieve its intended objectives. Kapucu (2006) maintains that strategic planning process is strategic because it prepares the best way to respond to the circumstances of the organization and its changing environment. It promotes a sequence of questions that helps people within the organisation examine experience, test assumptions, gather and incorporate information about the past and present as well as anticipating the future working environment.

An effective strategic planning produces an executable action plan that will result in a number of positive advantages for the organisation. Van der Heijden (as cited in Bryson, 2004) indicates that strategic planning will promote strategic thinking, acting and learning through various dialogs and conversation among the organisation members. It also improves decision making by directly involving the members into decision making process, effectively communicating any strategic direction and considering future impacts of the decision (Nutt, 2002). In brief, Bryson (2004, p.6) summarises that “strategic planning may facilitate communication and participation, accommodate divergent interests and values, foster wise, reasonable and an analytical decision making, and promote successful implementation and accountability”.

III. Strategy Formation in Organisation

Understanding strategy formation in organisation firstly requires a clear definition of what ‘strategy’ refers to. On the basis of this definition, an explanation on the process will be possibly available. Unfortunately, until recently there is still disagreement on this matter that results in a number of different perspectives of how strategy is formed in organisation.

In this paper, strategy is defined “as a pattern of stream decision” (Mintzberg & Waters, 1985, p.357). According to this definition, strategy formation can be traced by exploring the relationship between leadership plan and intention and what the organisation actually does. Strategy, in this view, may be classified into two categories: intended strategy and realised strategy. Intended strategies that get realised may be regarded as deliberate strategies. On the other hand, intended strategies that are not realised as the results of unexpected situation, unrealistic expectation, miscalculation or turbulent environment may be considered as unrealistic strategies. Realised strategies can emerge in response to evolving situation or it can be brought about deliberately through a process of formulation followed by implementation. Realized strategies that are never intended or emerge unintentionally during implementation or action may be called emergent strategies. A simple description of this process is presented in the following figure.


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Mintzberg & Waters (1985) maintain that on the basis of the interaction between deliberate and emergent that is influenced by leadership intention, control over organisational action, and environment, a number type of strategies can be generated including (arranged from most deliberate to most emergent) planned strategy, entrepreneurial strategy, ideological strategy, umbrella strategy, process strategy, unconnected strategy, consensus strategy and imposed.

IV. Deliberate and Emergent Strategies

As noted earlier, defining strategy as a pattern of action may result in two possible types of strategies; intended strategies and realised strategies (Mintzberg & Waters, 1985). The explanation behind this dichotomy has inevitably revealed and involved the discussion of two possible strategies; deliberate strategies and emergent strategies, as illustrated in the previous figure. Deliberate strategies are seen as the intended or planned strategies that are implemented or realised in the organisation actions. Emergent strategies, on the other hand, describe any strategies that are not formally planned or intended but implemented in organisation practices.

1. Deliberate Strategies

Deliberate strategies are generally formed through a formal process by a planning team or organisation leaders. As such, this kind of strategies are usually well understood and possibly agreed by almost all organisation members as a set of guided action that organisation uses to achieve its desired mission. In this sense, deliberate strategies seem to be indicative and directive since they direct and control the organisational patterns of action of (Mintzberg & Waters (1985). Deliberate strategies are rooted from intended strategies and intended strategies are generally formed through a formal planning. Accordingly, the quality of deliberate strategies is largely influenced by the ability of the planner in capturing and predicting the dynamic of both internal and external environments of the organisation. Moreover, Mintzberg (1994) maintains that the consistencies of the organisational actions and the intended organisational objectives play a major role in the success of deliberate strategies.

Mintzberg & Waters (1985) further explain that to become completely deliberated strategies that is producing realised strategies that are totally as intended, there are three prerequisites that must be met: 1) there have been precise intention or desire of the organisation before undertaking any actions, 2) such precise intention must have been perfectly institutionalised and, without any exception, possessed by all members of organisation, and 3) these shared collective intention must have been taken into action as intended without any external distractions. These three conditions in fact are difficult and even impossible to achieve by any organisation because of the inevitable influences of both internal and external environment of the organisation. The external environments such as political, economical, social, technological issues in particular are always changing and dynamic in nature. They will never be able to be fully controlled nor completely predicted as they are. Accordingly, completely deliberate strategies will never exist in any organisations.

2. Emergent Strategies

In contrast to the deliberate, emergent strategies are formed without prior formal planning. They are formed nearly incidentally along with the running of organisation (Mintzberg , 1978). Emergent strategy is a pattern of action which is consistent over time and but not intended as formal planning strategy. The fundamental difference between deliberate and emergent strategy is that whereas the former focuses on direction and control over the action of the organisation, the latter tend to be considered as strategic learning (Mintzberg, 1994). Emergent strategies emphasize on strategic learning and provide opportunities to people within the organisation to experiment and to be creative (Lowe and Jones, 2004). Although emergent strategies do not formally control the organisation action, it does not mean that they are uncontrollable. Instead, they are open and responsive to the exiting environment and challenges. In other word, the existence of emergent strategies in organisation can be observed as the people in that organisation have strong willingness to learn and seek alternative strategies to cope with the turbulent situations.

Contrary to deliberate strategies, to become perfectly emergent, there must be order consistency in organisation action over time along with the total absence of intention in performing the action (Mintzberg & Waters, 1985). Furthermore, they caution that emergent strategies are in fact not chaos yet they basically follow certain patterns in unintended order. Accordingly, the existence of emergent strategies also requires consistency of action which is also inevitable variable in forming intended strategies. The fundamental difference is that to become perfectly emergent, there must have been total absence of intention in organisation action. However, it is hard to figure out action without any attention in organisation. Accordingly, expecting perfectly emergent strategies is also nearly impossible for any organisation. The existing research indicates that some patterns do come rather close as the result of changing environments but they will never be totally emergent as expected (Mintzberg & Waters, 1985).

V. Strategic Planning: Shaping Organisational Action or Emerging from Organisational Action?

One of the fundamental purposes of conducting strategy planning is to establish direction, to organise a course of action and to evoke cooperation from organisational members around common and established guidelines (Mintzberg, 1987). From this perspective, formally planned strategies can be viewed as a guideline that shapes and determines the people’s action in the organisation that is largely based on some analyses and predictions of certain environmental conditions. However, Mintzberg, (1979) warns that in the implementation phase the environment can become so turbulent and unstable that even the best planning techniques are useless because of the high level of unpredictability. The planned strategies are mostly only applicable for the predetermined environment and will not deal with unpredictable conditions accordingly (Mintzberg & Waters, 1985). This suggests that formal strategic planning alone can not guarantee success without the inclusion of incidental strategic planning which is contingent upon emerging situation surrounding the organisation.

Other reason indicating that strategic planning can emerge from organisational action is that there is always possibility for adaptation along with the organisational actions. In formalised strategic planning where ideas and vision are dominantly determined and acted by the leaders as the central control, the proposed strategies seem to be more flexible and adaptable to the changing situation as the result of individual willingness to learn (Mintzberg & Waters, 1985). Vision retained by single leader can be more easily changed by the surrounding situations including threats from the environment, feedback, opportunities and past experiences. Accordingly, the planned strategies offered also become more flexible and even can be changed quickly. This again indicates that strategies is both forming the organisational actions and emerging from such actions.

VI. Conclusion

Strategies can be viewed as a set of consistent behaviours and patterns of action within organisation directed to achieve the organisational purposes. These strategies can be both deliberate and emergent. Formal strategy planning is important and also recommended to give a clear direction and control over the organisational action within particular situation. However, as the environment surrounding the organisation is highly unpredictable and turbulent, there is a need to consider continuous informal strategy planning. In addition, the high possibility of making adjustments to deliberate strategy planning provides more evidence that the inclusion of informal strategy planning is also critical to cope with the unprecedented challenges. Mintzberg (1994, p.111) states that “the informal nature of emergent strategies can allow organization to forecast discontinuities, inform detached managers or create novel strategies”. An effective strategy planning should incorporate both intentional and accidental strategy. Accordingly, strategy planning is both shaping the organisational action and emerging from the organisational action.

References

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