Abstract3
1. Approaches to Strategy.3
1.1 Strategy as a Narrative Practice.4
1.2. Competitive Strategy5
1.3. Corporate Strategy5
1.4. International Strategy6
1.5. Kaizen: Five Ss of the Japanese attitude in Manufacturing7
2. Need for Strategy-as-practice and its contemporary application.8
Conclusion9
References..11
Abstract
Recently, the role of strategy has drawn many scholars and practitioners’’ attention because of its function to predict certain consequences: when the risk is high and the organization has much responsibility, it is a need to assess and explore certain phenomena. Faulkner and Campbell (2006) said that this is perhaps the key factor, economic decision are taken deterministically in response to economic forces, and not a result of discretionary management judgment. Strategic management per se has become a subject of researches as a ‘form of social practice, which does not merely have impacts on the lives of nonsenior members of the organization, but these actors contribute to, participate in, and enact those social practices throughout the organization, from the center to the periphery’ (Kupers, Mantere, Statler 2012). In this paper we will analyze significance of ‘strategising’ in nowadays organizational practice as well as strategy-as-practice approach.
1. Approaches to Strategy
Strategy is not thought to be something ‘we plan’, but this is what we do: it neither something that happens in isolation, nor something that is easily compartmentalized’ (Clegg, Carter, Kornberger, Schweitzer 2011). The scholars highlighted the main rule: today I will strategize, tomorrow I will plan, on the next day I will implement’ (Clegg, Carter, Kornberger, Schweitzer 2011). Stragetizing (or strategy process in de Wit and Mayer), according to Whittington (2003), is the meeting, the talking, the form-filling and the number-crunching by which strategy actually gets formulated and implemented. It is concerned with the questions how, who and when of strategy (de Wit & Mayer 2010). Hamel (1996) proposed ten principles to increase the revolutionary spirit (they are directly tied with strategy). Among them we should mention the following ones:: strategic planning is no strategic (it does not the sphere of competence of the managers); strategic making must be subversive (you shouldn’t adhere to traditional strategic plans); strategic making must be democratic (all in the organization must be given proper consideration); anyone can be a strategy activist (Hamer 1996)
We will analyze the types of strategies (practical approaches to strategy), which correspond with the principles of Hamel, even though the list is not exhaustive, as well as try to show how they can be used nowadays.
1.1. Strategy as a Narrative Practice
Strategy is known to be analyzed from different points of view. In particular, Kuper, Mantere, and Statler (2012) pays attention to such phenomenon as a narrative practice strategy or storytelling one, which is guided by ‘principles that can facilitate situated and coherent decision making in complex environments’. In fact, such storytelling is ruled by the people responsible for organization and management in certain entity, thus, they know during which stage they have to get engaged. The authors highlight that ‘organizational actors enact strategies by engaging in narrative, and over time, these stories shape patterns of organizational processes and identities, and set the stage for the future’ (Kuper, Mantere, and Statler 2012). That helps to overcome possible barriers between the members of small groups as well as it is useful to be applied by the project managers, who often deal with the disputes arising in the group.
The value of such approach towards strategy is its catalyst in the field of expression by all the workers their attitude towards they current state of affairs in the organizations, that gives everybody a chance ‘to participate’ in writing a story. Such strategy is beneficial as a basis ‘for the adoption of strategic plans and the communication of strategic intent throughout the organization because it makes the content of the strategy more easily understood, which in turn enhances coping and emotional buy-in among employees’ (Kuper, Mantere, and Statler 2012).
1.2. Competitive Strategy
Faulkner and Campbell described this form of strategy and its main purpose and nature in the following way: ‘it is about finding a strategy that is better than that of your competitors, and that thus enables you to make repeatable profits from selling your products or services’ (Faulkner, Campbell 2006). It consists of two main elements, which have to be incorporated, when competitive strategy plan is adopted. At first, the external environment or market has to be analyzed, namely ‘what products and services to offer, what specific market segments, how to achieve differentiation from the offering of their competitors, and how to control costs in order to be able to be price-competitive (Faulkner, Campbell 2006).
The next element is the internal assessment. It consists in analyzing whether the firm possesses the necessary internal capabilities so as to deal with the demands of the market, whether there are leaders, who can raise the effectiveness of each member and so on (Faulkner, Campbell 2006).
1.3. Corporate Strategy
This concept consists in ‘general management skills which are applied across a range of businesses’ (Campbell, Faulkner 2006). Even though, such strategy always existed (it is also described as synergy often), it has become valuable in response to collapse of certain corporations, which tried to ‘diversify their business and to be engaged in almost each its sphere’, though ‘they later understood that it led to underperformance and need for new logic of management’ (Campbell, Faulkner 2006).
The key elements to achieve of the corporate strategy so as to call it successful and effective have been defined by the numerous of scholars, particularly by Faulkner and Campbell. They, inter alia, distinguish: ‘the value creation logic for having multiple business under one management form; the choice of business to have the portfolio; and the skills, processes, structures used to manage the portfolio’ (Campbell, Faulkner 2006). It is used in the sphere of alliances functioning, conglomerates, and corporations.
1.4. International Strategy
It is thought to be the combination of two previously discussed strategies, since, whereas as a competitive one it is about the situations ‘whether the international sources of advantage make it possible for locally focused business to survive, while as a corporate strategy it is about diversifying into other countries in order to create additional value’ (This concept consists in ‘general management skills which are applied across a range of businesses’ (Campbell, Faulkner 2006). Even though, such strategy always existed (it is also described as synergy often), it has become valuable in response to collapse of certain corporations, which tried to ‘diversify their business and to be engaged in almost each its sphere’, though ‘they later understood that it led to underperformance and need for new logic of management’ (Campbell, Faulkner 2006). Three main objectives are set so as to be effective multinational corporation: these are efficiency, risk management, and the most important innovation and learning (p. 659) This model is applied by transnational organizations, which, however, often ignore the experience of the previous market players as well as the scientific doctrine. In Chapter 22, Faulkner proposes ‘the rationale for the multinational corporations’. They are two key tasks of the MNC, namely ‘achieve the optimal form of configuration and certain type of coordination’ (Campbell, Faulkner 2006). There are two types of configuration: dispersed (concentration in many stops – countries) and concentrated, mostly in one country (p.652). High coordination means centralized decision-making, whereas low coordination consists in decentralized aforementioned process (p.652). Among decentralized and concentrated we can mention Toyota, the concept of which will be also discussed in the following chapter. Nestle, in contrast, has managed to combine dispersed model of configuration and decentralized cooperation (p.652).
1.5. Kaizen: Five Ss of the Japanese attitude in Manufacturing
This type of strategy, appeared in Japan, reflect ‘whole mental orientation and cultivated disposition for dealing with matters using the same thoroughness, attention, and care that is expected in dealing with any state of affairs’ (Chia & Holt 2009). This model was applied successfully in Toyota Corporation and led to daily self-cultivation and self-perfection, undertaken by each and every of the employees (Chia & Holt 2009). The Five Ss are: seiro – remove unnecessary work tools, materials, equipment or paperwork; seiton – organize and classify work items and documents to ensure easy locatability; seiso – keep the work environment spotlessly clean; seiketsu – standardize operations and activities whenever possible; shitsuke – observe and respect rules regarding timeliness, safety, machine procedures and accepted practice’(Chia & Holt 2009).
1.6. Hart’s models of Strategy
According to Hart’s integrative framework, there are five main styles of strategy, namely imperial strategy, which is driven by leader or small top team; cultural strategy, driven by mission and vision of the future; analytical strategy, driven by formal structure and planning systems; procedural strategy, driven by internal process and mutual adjustment; organic strategy, driven by organizational actors’ initiative (Paroutis, Heracleous, and Angwin 2013).
2. Need for Strategy-as-practice and its contemporary application
Gerry Johnson (2007) mentioned three main reasons why strategy-as-practice approach has to be applied, namely economic, theoretical, and empirical. From the economic, in particular, point of view, the markets are becoming more open, market entry more common, resources increasingly tradable, information more available (p.8). All that makes it necessary to apply daily strategy in order to broaden the sphere of influence of certain organizations.
An increase in knowledge-intensive work means the organizations have to employ – and manage – different kinds of employees: brains not brawn, mental rather manual labour, are the order of the day’ (Clegg, Carter, Kornberger, Schweitzer 2011). Knowledge-intensive work of nowadays depends on ’subtle tacit knowledge as well as explicit mastery’ (Clegg, Carter, Kornberger, Schweitzer 2011). This is implemented ‘into financial service industry sector, in which such giants as American Express, Citicorp, and HSBC’ have set the goal to innovate and to improve each employee (here we can mention the already discussed Japanese model of strategy). The strategic plans have been incorporated into the activity of Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley and so on (Clegg, Carter, Kornberger, Schweitzer 2011).
According to Hamel (1996), only those firms that adopted revolution approach (according to author, this is a strategic one) succeeded more than using an incremental approach’. This has to be taken into account by the modern organizations, which pretend to be rule breakers and successful business agents on the market. Additionally, his 10 principles are also actual (they have been mentioned at the beginning).
The process of how the strategy is implemented nowadays is shown in Paroutis, Heracleous, and Angwin (2013), as they demonstrate how AG, medium-sized technology organization, has applied strategic review of its activity, consequently, that led to greater awareness of how decisions were being made, which made management team make simple changes to the processes employed; it improved organizational performance and led to innovation.
Mayer and de Wit (2010) demonstrated how strategic planning led to positive consequences in the case of DreamWorks, which started strategic cooperation with Katzenberg. The decision to purchase Pixar studio for $ 7,4 billion rather than to settle new agreement is a great example of strategic decision of nowadays, which led to independence of the corporation from other companies offering their services, raise of the benefits, in particular, income and deeper cooperation with Apple, via which the premium DreamWorks’ content is now available (de Wit & Mayer 2010).
Conclusion
Hence, we can conclude (or highlight the insight of mine), having based our statement on the academic review, that in order to be revolutionary nowadays we need to come through three stages: to strategize, to plan and to implement. During all the stages we need to follow Hamer’s 10 statements. Particularly the aspect of creation of democratic entity in which everybody is a change agent possessing strategic thinking, has to be taken into account. Also, the strategic process has to unite simultaneously top managers, organizational community and strategy (goal-directed activity), which has been highlighted by Jarzabkowski (2005). All the above-mentioned discoveries are necessary to be taken while organizing the management plan in order to understand the nature of certain processes, thus being able to correct and change them, if necessary.
References
Chia, R. & Holt, R. (2009). Strategy without design: The silent efficacy of indirect action. Cambridge: Cambridge University Press
Clegg, S., Carter, C., Kornberger, M. and J. Schweitzer. (2011). Strategy: Theory and Practice, London: Sage
De Wit, B and Meyer, R (2010). Strategy: Process, Content, Context, 4th ed, Andover: Cengage Learning
Faulkner, D.O. and Campbell, A. (2006) The Oxford Handbook of Strategy. A Strategy Overview and Competitive Strategy. Oxford: Oxford University Press
Hamel, G. (1996). Strategy as Revolution. In: Harvard Business Review, 74(4). 69-82
Jarzabkowski, P. (2005). Strategy as practice. An activity-based approach. London: Sage
Johnson, G., Langley, A., Melin, L., & Whittington, R. (2007). Strategy as practice: Research directions and resources. Cambridge: Cambridge University Press
Küpers, W., Mantere, S. & Statler, M. (2012). Strategy as Storytelling: A phenomenological collaboration Journal for Management Inquiry (21)3
Paroutis, S., Heracleous, L. and Angwin, D. (2013). Practicing strategy: Text and cases, London: Sage
Whittington, R. (2003). The work of strategizing and organizing: for a practice perspective. Strategic Organization, 1(1): 117–12
