What are the Similarities of prescriptive and descriptive schools of strategy?
The perspective schools helps in suggesting the ways through which strategies is to be formulated. The schools of thought help in strategy formulation that will be used for the business.
The design school is a concept where Mintzberg suggested that strategy is formulated with the help of the techniques and the tools like the Ashriridge Mission Model and the SWOT Analysis (Swayne, Duncan and Ginter 2012). The concept when followed by the companies needs to see the strengths, weaknesses , opportunities and the threats before it makes strategies. The external and the internal analysis of the factors is done through SWOT analysis and based on the strategies need to be formulated (Andrews et al.2012). The strategy is affected by the architecture. The models will be useful in understanding the environment whether it is stable or what other steps that is needed for overcoming the threats. There are a number of drawbacks also. This type of models does not keep a track of the changes and this is a concept that is ignored. The focus is more on the organization rather than the employees (Eden and Ackermann 2013). Thus, the strategy is based on the SWOT analysis by the organization so there is a need for innovation or else the competitors would be excelling through the innovative strategy.
The planning school of thought suggests the evaluation of the current situation of business and there is more focus on the implementation of the strategies . The literal meaning suggest that the organization should be analysing the current situation of business like the contemporary issues , business position and the external factors and then devise on the strategy and implementation (Swayne, Duncan and Ginter 2012). This school of thought will help in innovation, brain storming, establishment of the objectives and the goals and help in allocating the resources as per their needs. This type of ideology is similar to that of the process of strategic management, which is useful in the present environment of business. Innovation is likely to expand and concept will help in urban planning (Barney and Hesterly 2012). This concept is superior to that of the design school as it helps in innovation and focus is on the external environment and implementation. There are also drawbacks to this school of thought. This concept can create conflict between the managers and can make prediction through the designing of the strategy very difficult. The rationale is based on the instincts rather than the facts. The strategy execution gets tough for the managers for monitoring every action that is made for the strategy to implement (Coulter 2013). The strategy implementation is very crucial as this helps in determining whether the strategy of the company will fail or succeed. For example, the Company Clear Shampoo has used the famous footballer Christiano Ronaldo for promoting Clear Men shampoo. This strategy for using iconic footballer will help in attracting all the football lovers through the number of communication channels.
This school of thought mainly suggests focus on the company’s initial position and helps in the strategy development, which would help the company’s position to change (Dess 2012). The main concept is that the focus is on the changing of the current position in the industry and making changes in the mind of the customers. For example: A company, which manufactures small cars of the range 800 to 1000 cc has some set of definite customers but if they come with sports cars then as per their current status the current customers would hardly purchase (Slack 2015). There is a need for the companies to design the strategies that would help in changing the position. The other schools of thought do not represent this, as this is different completely. The manufacturing company that that designs small car can increase the price of the cars or introduce a section for the luxury cars, which helps in changing the strategic position of the company (Mellahi and Frynas 2015). Military strategy helps in influencing the concept. The large firms are beneficial rather than the small firms there can be huge investment made by the large firms, which the small firms are unable to do. Therefore, this is not a unique type of strategic formulation process. The external factors are avoided like the social, technological, cultural and political factors and there is more concentration of the profits in this type of concept. For example: This type of strategy was deployed by Toyota by providing luxury cars under the name‘Lexus’.
This type of school mainly recommends on the ways through which the strategies is actually formulated. Literally, it means the ways through which the organization will be formulating the strategies.
According to Mintzberg, the entrepreneurial school will help in suggesting that this concept followed by the organization will have a visionary leader who would be formulating the strategy and organization will be following that strategy throughout the company’s existence while making appropriate changes as per the environment. The concept is influenced by biology. The formulation of the strategy is centralised and devising of the strategy will depend upon the leader (Ginter, Duncan and Swayne 2013). There are also some limitations in this concept. There might be some members of the organization who might not agree with the strategy design as there is no involvement of them when the strategy was formulated. There might not be any type of response by the employees to the strategy applied as they have been neglected during the time of formulation of strategy process. For example, Microsoft made this type of formulation of the strategy where Bill Gates formulates the strategies.
As per Mintzberg , the concept of cognitive school suggest that the organizations follow the concept by formulating the strategy through understanding the customer’s psychological needs. The literal meaning is that the focus of the organization is on meeting the wants and the needs of the customers. The analysis is on the response of the individual to a particular situation and through the behaviour. This will help in the formulation of the strategy after an extensive research. This concept is influenced by psychology, which might be look important but is ineffective in the present environment of business (Hill and Jones 2012). The main reason for this is that it is a very expensive and time-consuming affair to research on the psychology of the customers. The concept is also based on a number of assumptions, which might not hold true. As the formulation of the strategy might be done based, on the psychology, that makes the startegies and this might not match with that of the customers. For example: The controls of audio could be made through the buttons on the steering wheel of the brand Toyota Premio 2008 that was done as the customers for the convenience so that they do not have to reach the audio set this would help the customers to change songs and control the volume
As per Mintzberg, the concept of learning school suggests that organization they are going to formulate the strategies through the mistakes that they have learned. The formulation of the strategy in this type of concept is quite slow as the managers they learn and then formulates the strategies. Learning School concept is influenced by education. The concept is quite useful and formulation of the strategy is based on the cognitive school (Rothaermel 2015). The problem with this type of school is time consuming and this might lead to no formulation of strategy at all. This is a very expensive approach, as there is a need to perform research for formulating the strategy. For example, Coke launched the New Coke but this did not appeal the customers of America and so the company had to bring back the old coke in the name of Classic Coke.
According to Mintzberg, this type of concept suggest that the organization will be able to formulate strategies based on the power which might be due to the competitive advantage. Strategy can also be formulated through the power of the company, which might be capital or the brand image. The strategy will be exerting some power over the customers. Political science influences this concept (Sakalova and Krcova 2016). This concept also helps in reflecting the concept of entrepreneurial school as there are visionary leaders present who would be exerting power of vision. The monopoly organization tends to do perform it. There is a need for investment and there is delusion of power by the organization might lead to taking up of wrong strategies. For example, Lancôme perfumes have appealed the individuals so they are going to buy since it has become a signature product. The company will also charge a higher price for the product (Lasserre 2012).
According to Mintzberg , this school of thought suggest that when the organization they follow this concept the strategy is formulated by the corporate culture. The concept will help in the involvement of the employees and so the strategy formulation concerns on the cooperation of the employees (Lynch 2012). Anthropology tends to influence the concept. There is a higher degree of resemblance with the entrepreneurial school and there is a visionary leader. This type of concept helps in dealing with the acquisition and the mergers but the external environment is ignored and there is a conflict between the employees in the organization. For example: In the business week , an interview with the BMW’s CEO has revealed that the employees they have freedom to get anything done and managers of the departments they are able to take decisions without a committee and this advantage to employees will help BMW to get competitive advantage (theplanninglab.typepad.com 2016).
According to Mintzberg, this concept suggest that when the organization they follow this concept the focus is on the external factors of the environment and the strategy is formulated based on those factors. The organization they check all the aspects of the environment i.e. political, social, economical and technological before the strategy is devised for tacking the obstacle faced( Stead and Stead 2013). This concept is influenced by biology. This has some concepts of design school, as the external factors will help in devising the strategy. The drawback of this concept is that there is no significance given to the internal environment. For example, Dell has introduced the low priced computers so that it can appeal the customers and the corporation during the time of great recession.
According to Mintzberg, the configuration concept when followed by the organization will focus on changing of the decision patterns so that strategy is formulated. Configuration School is influenced by concept. This is a concept that is innovative as this helps in keeping up with the change (12manage.com 2016). A compounded strategy is not practical, as this type of the formulation of the strategy would need a structure is flexible in the organization and flexibility among the employees who would be adjusting with the change instantly.
The perspective about the Whittington strategy is classified into four divisions. The divisions are classical, evolutionary, processual and the systematic. The following shows the detailed analysis:
According to Whittington, these types of strategies are formed formally with the profit maximization objective. This is influenced by the military, economic and strategic formulation based on the internal factors of the organization. The strategies that is compiled under the cost leadership so the leaders they produce the goods as the lowest possible cost (Shimizu 2012). The schools of thoughts like the design, entrepreneurial and positioning that is suggested by Mintzberg will be come under the classical perspective strategy.
The formulation of processual strategies is done with the unclear objectives. This type of classification is influenced by the strategic formulation and psychology done based on the perception, politics and internal factors. The strategies that fall in this category are quite risky and the organizations that follow this are very risk oriented (Pitt and Koufopoulos 2012). The organization they would be establishing a strategy that would help in establishing a strategy to check what is right and what is wrong and improvise it when this gets successful. The learning and cognitive school of the formulation of strategy that Mintzberg suggests falls under the processual strategy perspective.
According to Whittington, the evolutionary strategy is formulated with the survival objective in mind. This type of classification is affected by biology, economics and strategic formulation, which is, based on the external factors i.e. the market. The strategies in this category are short-term strategies, which is formulated so that the organization survives in the market not for a long-term objective (Raimbault and Barr 2012). The organization that follow this strategies are short sighted which focuses on the short period rather than the future. Mintzberg suggests the environmental school of formulation of strategy fall in the category of strategy evolutionary perspective.
According to Whittington, the formulated strategy through the local adoption is treated as objective. The strategic formulation is influenced by classification and sociology, which is, based on the external factors i.e. the attitudes and the cultures of local type of setting. The strategies that fall in the category are done with an intention for making products that integrate with that of the present environment. The local environment norms are the basis for the strategy formulation. The environmental and cognitive school for the strategy formulation fall in the systematic perspective for the strategy used.
The Design School
The Entrepreneurial school
The Positioning School
The Cognitive School
The Learning School
The Environmental School
The Cognitive School
The Environmental School
The strategy that the organization designs helps a company to gain success or failure. This concept is going to turn out to be futile without the strategic management. This it can be said that strategic management and the strategy taken up can determine the failure or the success. The perception review by the authors Richard Whittington and Henry Mintzberg has shown the strategy formulation us quite important and the strategy design is equally important. The tens schools suggested by Mintzberg is categorised in the descriptive and prespective which shows the different ways of the strategy formulation and perspective of the Whittington strategies has shown what has to be there in the mind while designing the strategy. This type of concept is important to keep in mind before devising the strategy and this will help in screening of the strategies and select the ideal one that is suitable for the organization.
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