Strategy making is considered the high point of managerial activity. But bombarded by fads and fixes, most managers have been groping blindly to get their arms around the proverbial elephant. Now Henry Mintzberg, author of the award-winning The Rise and Fall of Strategic Planning, has teamed up with Bruce Ahlstrand and Joseph Lampel to create a powerful antidote: a comprehensive and illuminating -- as well as colorful -- tour through the fields of strategic management. Mintzberg, Ahlstrand, and Lampel have shaped each of ten different approaches into a coherent school of strategy formation. In the process, the authors clarify the enormous amount of confusion that exists.
The result is a tour de force: a brilliant, penetrating primer on business strategy that is, at the same time, immensely readable and fun. The authors provide a thorough critique of the contributions and limitations of each school -- from the design, planning, positioning, entrepreneurial, and cognitive schools to the learning, power, cultural, environmental, and configurational schools -- culminating in how they might combine to reveal that elephant.
Unique, insightful, and essential, Strategy Safari is the indispensable guide for the creative manager.
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Henry Mintzberg, author of several seminal books, including Mintzberg on Management and The Rise and Fall of Strategic Planning, is the Cleghorn Professor of Management Studies at McGill University and professor of organization at INSEAD, in France.Excerpt. © Reprinted by permission. All rights reserved.:
Chapter One: "AND OVER HERE, LADIES AND GENTLEMEN: THE STRATEGIC MANAGEMENT BEAST"
THE BLIND MEN AND THE ELEPHANT
by John Godfrey Saxe (1816-1887)
It was six men of Indostan
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind)
That each by observation
Might satisfy his mind.
The First approached the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to brawl:
"God bless me but the Elephant
Is very like a wall."
The Second, feeling of the tusk,
Cried, "Ho! What have we here
So very round and smooth and sharp?
To me 'tis mighty clear
This wonder of an Elephant
Is very like a spear!"
The Third approached the animal,
And happening to take
The squirming trunk within his hands,
Thus boldly up and spake:
"I see," quoth he, "The Elephant
Is very like a snake!"
The Fourth reached out an eager hand,
And felt around the knee,
"What most this wondrous beast is like
Is mighty plain," quoth he;
"'Tis clear enough the Elephant
Is very like a tree!"
The Fifth, who chanced to touch the ear,
Said: "E'en the blindest man
Can tell what this resembles most;
Deny the fact who can,
This marvel of an Elephant
Is very like a fan!"
The Sixth no sooner had begun
About the beast to grope,
Than, seizing on the swinging tail
That fell within his scope,
"I see," quoth he, "the Elephant
is very like a rope!"
And so these men of Indostan
Disputed loud and long,
Each of his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!
So oft in theologic wars,
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean,
And prate about an Elephant
Not one of them has seen!
We are the blind people and strategy formation is our elephant. Since no one has had the vision to see the entire beast, everyone has grabbed hold of some part or other and "railed on in utter ignorance" about the rest. We certainly do not get an elephant by adding up its parts. An elephant is more than that. Yet to comprehend the whole we also need to understand the parts.
The next ten chapters describe ten parts of our strategy-formation beast. Each forms one "school of thought." These ten chapters are framed by this first chapter, which introduces the schools as well as some ideas about strategy itself, and a last chapter which returns to the whole beast.
In a colorful article entitled "The Magic Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information," psychologist George Miller (1956) asked why we tend to favor a quantity of about seven for categorizing things -- for example seven wonders of the world, seven deadly sins, and seven days of the week. This reflects our cognitive makeup, he concluded: seven is about the number of "chunks" of information that we can comfortably retain in our short-term memories. Three wonders of the world would fall a little flat, so to speak, while eighteen would be daunting. But those of us interested in strategy are, of course, no ordinary mortals -- at least in terms of our cognitive capacities -- and so should be able to comprehend, say, one more than the magic number seven plus two. Accordingly, this book proposes ten schools of thought on strategy formation.
Cognition aside, in reviewing a large body of literature, ten distinct points of view did emerge, most of which are reflected in management practice. Each has a unique perspective that focuses, like each of the blind men, on one major aspect of the strategy-formation process. Each of these perspectives is, in one sense, narrow and overstated. Yet in another sense, each is also interesting and insightful. An elephant may not be a trunk, but it certainly has a trunk, and it would be difficult to comprehend elephants without reference to trunks. The handicap of blindness does have an unexpected advantage, sharpening the other senses to the subtleties that can escape those who see clearly.
THE SCHOOLS. Accordingly, in each of the ten subsequent chapters, we present one of the schools from its own limited perspective. Then we critique it, to extract both its limitations and its contributions. These schools, together with the single adjective that seems best to capture each one's view of the strategy process, are listed below:
The Design School: strategy formation as a process of conception
The Planning School: strategy formation as a formal process
The Positioning School: strategy formation as an analytical process
The Entrepreneurial School: strategy formation as a visionary process
The Cognitive School: strategy formation as a mental process
The Learning School: strategy formation as an emergent process
The Power School: strategy formation as a process of negotiation
The Cultural School: strategy formation as a collective process
The Environmental School: strategy formation as a reactive process
The Configuration School: strategy formation as a process of transformation
Our ten schools fall into three groupings. The first three schools are prescriptive in nature -- more concerned with how strategies should be formulated than with how they necessarily do form. The first of these, which presented in the 1960s the basic framework on which the other two built, focuses on strategy formation as a process of informal design, essentially one of conception. The second school, which developed in parallel in the 1960s and peaked in a flurry of publications and practice in the 1970s, formalized that perspective, seeing strategy making as a more detached and systematic process of formal planning. That school was somewhat displaced in the 1980s by the third prescriptive school, less concerned with the process of strategy formation than with the actual content of strategies. It is referred to as the positioning school because it focuses on the selection of strategic positions in the economic marketplace.
The six schools that follow consider specific aspects of the process of strategy formation, and have been concerned less with prescribing ideal strategic behavior than with describing how strategies do, in fact, get made.
Some prominent writers have long associated strategy with entrepreneurship, and have described the process in terms of the creation of vision by the great leader. But if strategy can be personalized vision, then strategy formation has also to be understood as the process of concept attainment in a person's head. Accordingly, a small but important cognitive school has also developed that seeks to use the messages of cognitive psychology to enter the strategist's mind.
Each of the four schools that follow has tried to open up the process of strategy formation beyond the individual, to other forces and other actors. For the learning school, the world is too complex to allow strategies to be developed all at once as clear plans or visions. Hence strategies must emerge in small steps, as an organization adapts, or "learns." Similar to this, but with a different twist, is the power school, which treats strategy formation as a process of negotiation, whether by conflicting groups within an organization or by organizations themselves as they confront their external environments. In contrast to this is another school of thought that considers strategy formation to be rooted in the culture of the organization. Hence the process is viewed as fundamentally collective and cooperative. And then there are the proponents of an environmental school, organization theorists who believe strategy formation is a reactive process in which the initiative ties not inside the organization, but with its external context. Accordingly, they seek to understand the pressures imposed on organizations.
Our final group contains but one school, although it could be argued that this school really combines the others. We call it configuration. People in this school, in seeking to be integrative, cluster the various elements of our beast -- the strategy-making process, the content of strategies, organizational structures and their contexts -- into distinct stages or episodes, for example, of entrepreneurial growth or stable maturity, sometimes sequenced over time to describe the life cycles of organizations. But if organizations settle into stable states, then strategy making has to describe the leap from one state to another. And so, another side of this school describes the process as one of transformation, which incorporates much of the huge prescriptive literature and practice on "strategic change."
These schools have appeared at different stages in the development of strategic management. A few have already peaked and declined, others are now developing, and some remain as thin but nonetheless significant trickles of publication and practice. We shall describe each school in turn, with our own interpretation of its development and its difficulties, before concluding with our final integrative comments in the closing chapter.
Note that all of these schools can be found in the literature, often in very clearly delineated pockets: particular academic journals, special practitioner magazines, certain styles of books. But most are, or have been, equally evident in practice, both within organizations and from the consulting firms that serve them. Practitioners read and are influenced by the literature, just as the literature is influenced by the practice. So this is a book of the school of thought on strategy formation both in publication and in practice.
A Field Review
The literature of strategic management is vast -- the number of items we reviewed over the years numbers close to 2,000 -- and it grows larger every day. Of course, not all of this comes from the field of management. All kinds of other fields make important contributions to our understanding of the strategy process.
William Starbuck has written that to discuss "all aspects of organization which are relevant to adaptation...means...that one could legitimately discuss everything that has been written about organizations." This is, in fact, an understatement, because the last word in the quotation should read "collective systems of all kinds."
What biologists write about the adaptation of species (for example it "punctuated equilibrium") can have relevance for our understanding of strategy as position ("niche"). What historians conclude about periods in the development of societies (such as "revolution") can help explain different stages in the development of organizational strategies (for example, "turnaround" as a form of "cultural revolution"). Physicists' descriptions of quantum mechanics and mathematicians' theories of chaos may provide insights into how organizations change. And so on. Add to this all the other literatures that are more commonly recognized as relevant to the study of organizations -- psychology on human cognition as well as leadership charisma, anthropology on cultures in society, economics on industrial organization, urban planning on formal planning processes, political science on public policy making, military history on strategies of conflict, and on -- and the result is an enormous, dispersed body of literature capable of rendering all sorts of insights. At the limit, strategy formation is not just about values and vision, competences and capabilities, but also about the military and the Moonies, crisis and commitment, organizational learning and punctuated equilibrium, industrial organization and social revolution.
We consider this literature in its own terms. We do not, however, seek to review it comprehensively. (We had no more wish to write several thousand pages than most people have to read it.) This, in other words, is a field review, not a literature review. We seek to cover the literature and the practice -- to set out its different angles, orientations, tendencies. In so doing, we cite published work either because it has been key to a school or else because it well illustrates a body of work. We apologize to the many insightful writers and consultants whose work is not mentioned; we hope that we have left out no significant bodies of work.
We must add one point, however. There is a terrible bias in today's management literature toward the current, the latest, the "hottest." This does a disservice, not only to all those wonderful old writers, but especially to the readers who are all too frequently offered the trivial new instead of the significant old. We express no such bias in this book. Ours is a review of the evolution as well as the current state of this field. Later in this book we argue that ignorance of an organization's past can undermine the development of strategies for its future. The same is true for the field of strategic management. We ignore past work at our own peril. Indeed, we believe that time works on the literature and practice of strategic management much like it works on wine in barrels: it reveals what is excellent. We therefore apologize to no one for reminding the reader of so many wonderful old publications.
Five Ps for Strategy
The word strategy has been around for a long time. Managers now use it both freely and fondly. It is also considered to be the high point of managerial activity. For their part, academics have studied strategy extensively for about two decades now, while business schools usually have as their final required capstone a course in strategic management. The word strategy is so influential. But what does it really mean?
It is part of human nature to look for a definition for every concept. Most of the standard textbooks on strategy offer that definition, usually presented in the introductory chapter, more or less as follows: "top management's plans to attain outcomes consistent with the organization's missions and goals" (Wright et al.). No doubt such definitions have been dutifully memorized by generations of students, who have later used them in thousands of corporate reports. We offer no such easy definition here. Instead, we argue that strategy (not to mention ten such different schools about it) requires a number of definitions, five in particular (based on Mintzberg, 1987).
Ask someone to define strategy and you will likely be told that strategy is a plan, or something equivalent -- a direction, a guide or course of action into the future, a path to get from here to there. Then ask that person to describe the strategy that his or her own organization or that of a competitor actually pursued over the past five years -- not what they intended to do but what they really did. You will find that most people are perfectly happy to answer that question, oblivious to the fact that doing so differs from their very own definition of the term.
It turns out that strategy is one of those words that we inevitably defi...
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