Emergent Approach To Strategy Development For Organizations

Elements of Business Strategy

With the rise in the competitive nature of businesses and an ever changing environment, organizations need to come up with robust strategies for their businesses that intelligently combine the solid organization, strategic planning, and a valid and crucial template for effective decision making. Hence the business strategy is typically a synthesis of 3 particular elements which are the stated objectives of business of the company, identification of the target market, along with plans for strategic management (Williams, Chen and Agarwal 2017). These three components must be aligned to effectively place the organization in a position of competitive advantage where they can easily attain their short as well as long term objectives and goals of business (Bryson, Edwards and Van Slyke 2018). The business strategy is considered to be extremely important as all companies that want to be successful need to merge their mission statement idealism with the consistent realities of decision making which are faced in daily business operations. Any organization in order to come up with a good and efficient strategy for the growth and development of their business must completely understand the overall business, its requirements and demands, the products or services, along with the market realities as they are objective, cold, and in unbiased conditions (Bryson 2018). Then they must plan the strategy with other relevant business stakeholders to ensure it has the most optimal outcome. Strategic planning is therefore the process where the external and internal environments of the organization are explored and analyzed systematically so that the most effective strategy can be developed. Strategic planning is also known as a ‘long range planning’ and can easily cover 3 to 5 years in almost many sectors of business and more in sectors such as oil (Cassidy 2016). Strategic planning is often conducted by deploying specific approaches such as emergent and prescriptive.

There is a lot of uncertainty as well as complexity involved within developing, formulating, and implementing the strategies within the organization. There are various approaches that can be leveraged while developing strategies for any businesses and these include deliberate or prescriptive approach and emergent approach. The prescriptive or deliberate approach focuses on the mission and vision, objectives, the core values and clearly defines them before starting strategy implementation (Bryson and Roering 2018). This further implies that the organization will formulate and intentionally plan as well as formulate an intended or deliberate strategy which will follow the intentions as well as priorities of the top management of the organization. The approach therefore, follows a management style that is authoritative and a hierarchical structure that is top to down. The approach is also linear in progress as the process starts from strategic analysis and then strategy development and finally to strategy implementation. This is almost always shadowed by Emergent approach which is the primary scope of this paper. The Emergent approach is when the strategies automatically emerge as the managers make operational and strategic decisions in various time periods and this result into a certain process or pattern (Coffie and Blankson 2018). Thus, the realized strategy of the organization is typically not created out of deliberate planning from top management but mostly emerges from situation and event interpretations, actions and decisions taken, lower level complex interactions which emerge from bottom to up. This provides evidence that the process of strategy making can also be incremental, interactive, and unplanned which ensures faster adaptation and flexibility in the changing business structure and environment. The scope of this paper thus extends to analyzing the extent to which the strategies taken by organizations must be emergent in nature so as to take on the fast changing business environment.  

The Importance of Business Strategy

As has been established before, the creation of strategy is a diverse, incremental, interactive, as well as an unplanned process that ensures that the organization remains quite flexible as well as able to adapt to the first changing environment of business and related industries. The primary difference between the deliberate strategy and emerging strategy is that the emerging strategy mostly results into a specific strategic plan and for a deliberate strategy it is almost always the other way around (Bettley and Horrocks 2018). When an emergent strategy emerges from within a certain pattern of actions and decisions it can be easily documented, for instance strategic plan documents and annual reports of businesses.  The emergent approach towards strategic planning is also known to have a shorter term for planning and the new knowledge as well as experiences that are learned on a daily basis further help in the adaptation of complex strategies.  This further implies that the approach of emergent strategy is contained within the strategy development learning school (Au, Han and Chung 2018). This is primarily because new strategies evolve or emerge as well as strategic changes occur only when the managers present at the lower levels acquire new daunting experiences, take certain risks, As well as as well as learns new ways of conducting business and doing things (Areal, McIntosh and Sheppy 2016). The contemporary and recent consensus for adapting the emergent approach to strategy development primarily stems from the ability of the process to continuously learn and then accordingly shift their tactics so as to align them as the conditions dictate, the approach is thus much more suitable for the turbulent, rapidly evolving, uncertain, and ambiguous business environments in comparison to the prescriptive or deliberate approach to strategy development and planning.

The primary advantages of the emergent approach to strategy development Is many And the chief advantage is that the process is less resistance to changes (Areal, McIntosh and Sheppy 2016).  As the process argues that strategy emerges in an incremental nature various groups and individuals in the organization can remain prepared for the various strategic changes as new strategies are formed as well as implemented simultaneously as a part of strategy renewal process. However, if the context were to involve radical changes the consequences would be that of strategic inertia due to higher resistance from employees and other stakeholders during implementation of strategies. Another well known advantage of the emergent approach is the ability to continuously exploit lucrative opportunities as the process suggests that strategies can be easily readjusted and the tactics can be shifted promptly which enables the organization to partake in complex and dynamic strategy renewal processes and respond successfully to the multiple changes within the business environment and in the process exploiting the various opportunities as it surfaces (Opoku and Tallon 2019). Another benefit of the emergent approach is that it has a higher chance of success in terms of strategy implementation and development. The management is able to test the various strategic options as it emerges in different forms such as trial and error, experimentation, and learning. This lays reference to the the fact that the knowledge that is gained from the experience is a source of competitive advantage as well as strategic success for the organization. This is further possible as the processes of strategy development and strategy implementation is almost simultaneous which allows readjustment and flexibility according to the changes that come this way (Horst and Järventie-Thesleff 2016). The process of emergent strategy is also beneficial for the motivation of the employees as they are able to share ideas and thoughts which make them feel more contributing and valued towards the primary goals and direction of the company. If employees remain motivated they will have better performance and productivity levels and will be able to meet the general and specific goals of the organization. Lastly, another benefit of emergent process of strategy is the facilitation of the strategic innovation. The organization when partaking in emergent approach will develop elements of the learning organization which can be further described as an organizational culture that facilitates continuous capture, sharing as well as utilization of the skills and knowledge so as to improve the performance on a continuous basis. The emergent approach is also known to facilitate innovation, creativity, and initiative of the employees as they learn by sharing their thoughts and ideas which are further debated and tried out to understand its efficacy levels (Mishra et al. 2017).

Prescriptive and Emergent Approaches to Strategy Development

Although the process of emergent approach is also known for its short termism possibility, it may not be much productive without a formal strategy plan which is why it is supposed to work best when it is aligned with the prescriptive or deliberate strategy approach of an organization. The long term strategic thinking feature of the prescriptive approach discourages the short termism of emergent thinking since the performance targets are monitored in retrospect of the long term goals. The process of prescriptive or deliberate strategy can also achieve faster consensus within the workplace environment as it is easier to coordinate the performance and efforts of the strategic units of business, managers, and employees as the strategies are listed as statements of mission, vision, objectives, goals, and values. The efforts can be further enhanced by aligning emergent methods of strategy development and implementation with deliberate or prescriptive process (Carlisle and McMillan 2017). Strategic planning much like emergent approach is also a learning process but it can benefit more if it involves or are  open to strategies that are emergent in nature, this process can also benefit by reducing strategic inertia. Systematic analysis that is performed under the deliberate or prescriptive approach but simultaneously keeping an open mind to emerging strategies can help the organization to organize themselves better so as to fit in with the ever changing business environment.

Strategic renewal can be defined as the process involving a grand change as well as the outcome of the adjustments towards strategic direction which has the potential to identify and determine the long term competitiveness of the organization. The primary objective of the strategic renewal process it’s to come up with a strategic fit between the internal capabilities of an organization along with the shifts within the external environment which involves markets, technology, industries, as well as the economy that needs changes within the status quo of doing business. Strategic renewal is often defined as the phenomenon which involves the content, process, and outcome of replacement or renewal of the various attributes within the organization, this further includes the ability to impact on the long term prospects of the organization or business (Kunc and O’brien 2019). Organizations generally undertake the strategic renewal process to completely replace or refresh the various organizational attributes they have as soon as they realize that their functionality and operations may very well be threatened due to competitive weakness in the near future. The strategic renewal process has a number of obstacles that can slow down or limit their execution. These obstacles are allocated a general term known as strategic inertia that is used to define the various forces that inhibit an impact upon strategic renewal process. Hence, strategic inertia can be simplified by explaining it as forces that in various ways interrupts the ability of an organization to adapt to the changing environment and in this way impairs their capability to grow and develop their competitive advantage. It is agreed upon by experts that strategic inertia influences may very well restrain but not fully quell, the renewal efforts of an organization. It is therefore the forces that act in direct contradiction to the ability of an organization to readjust to the business and environmental changes. According to business and industry experts, it is extremely significant to create a balance between the two forces of strategic renewal as well as strategic inertia simultaneously as the forces typically coexist together and varies in the total amount of impact it creates on the organization (Toledano 2018). But, before venturing into the two concepts in detail and analyzing them to strike a balance between the two forces, it is necessary to critically evaluate the various forms of strategic renewal processes or methods that are in place and are used interchangeably to the advantage of the organization depending on the internal as well as external changes within the overall business environment.

Emergent Approach in Detail

One type of strategic renewal process is known as incremental renewal which can be defined as a set of minor adjustments that are made regularly within the organization so as to alleviate the external environmental pressures (Bushe and Nagaishi 2018). In various senses, the process can be analyzed as an evolutionary one In terms of survival as it maintains various operations and helps by improving the organization’s chances of survival in the long term. Gradual adaptations and changes can effectively empower organizations when they are carried out successfully so as to cope with the various changes as they come by. These changes also help to reduce pressure when the organization has to go through more radical transformations and changes in the near future (Lischka 2019). The fundamental principle is to protect and persist the competitive position of the organization in a daily basis through deploying sequences of decisions that are path dependent along with timely reactions to the various opportunities of business. Accumulating small and minor adjustments within the strategic direction of the organization also results in major changes and transformations in the long term. Real world examples off incremental strategic renewal can be seen in the case of Intel and Johnson and Johnson (Schmitt, Raisch and Volberda 2018). Intel undertook a set of innovations to improve and protect their position in the market and through continuous innovation Intel raised the barriers for the new entrants. On the contrary, Johnson and Johnson undertook increased innovation through the technique of acquisition and realigning the acquired units of business as well as products.

On the other hand there is transformation and renewal which are clarified as major changes in terms of technology, regulations, market and economic crisis, which can very well force an organization to change their strategic direction and operational setup in a fundamental way (Sievinen, Ikäheimonen and Pihkala 2020). Organizations may also be forced to deploy transformational change when their products have finally reached the stage of maturity within their life cycle. In this case, major changes can prevent the rapid decline of demand along with the continuous decrease in overall profits and market share. Transformational renewal is often compared to deliberate or prescriptive approach to strategy formation as changes are typically decided from top management and involves long term strategies for operation. The concept involves transformations within the technological platforms, business models, resource base, organizational structure, as well as strategic capabilities (Riviere, Suder and Bass 2018). It also involves redeveloping financial capitals, human capital, and organizational capital, along with social capital. Real world examples of transformational renewal may include eBay and Amazon when they created online platforms for retail in both the B2B and C2B markets. Radical changes were initiated in their service processes as their businesses took a full departure from the then continuing norm of physical retail stores (Warner and Wäger 2019).

As has been established before the process of strategic plan is rarely without any consequences or restrictions. Strategic inertia is a term that is used to describe the various barriers and issues faced by businesses which impacts on their ability to improve their position in terms of competitive advantage in the market (Amankwah-Amoah, Ottosson and Sjögren 2017). Resource allocation is considered to be one of the most prominent internal forces of strategic inertia as the resources are mostly limited. Restrictions within resources impede the stability of an organization to achieve their objectives as there always remains a gap that often creates further conflicts. Another internal source of strategic inertia is the differences within the attitudes and interests of the employees and stakeholders in the organization, varying perspectives can be an issue due to the general lack of consensus an agreement by all the stakeholders (Klammer et al. 2017). Lastly, insufficient employee engagement and understanding can also be a source of inertia as without proper understanding the individuals cannot fully deploy and leverage the strategies to achieve the business goals and objectives. Similarly engagement is also an important factor as individuals who are not engaged does not care enough to implement the strategies in their work (Schmitt et al. 2016). As it is clear that strategic renewal and strategic inertia are two concepts that coexist together and therefore it is of significant importance to create a balance between the two. Balance can be created by involving smaller strategies that deal with the above mentioned inertia through various ways such as employee motivation and workplace satisfaction methods, various engagement activities, proper an equal allocation of resources, a positive and learning organizational structure that promotes conflict resolution in retrospect of attitude and interest variations (Abdelgawad and Zahra 2020).

Advantages of Emergent Approach

Conclusion

Therefore, it can be concluded that the primary scope of this paper was to critically evaluate the topic of “To what Extent Should Strategy be Emergent” by carefully evaluating the various forms of strategy formulation and planning which includes deliberate or prescriptive approach on one hand and on the other there is emergent strategy approach. While prescriptive and deliberate approaches are two sides of one single coin, which means deliberate strategy is long term strategic planning mostly conducted by the top management. On the contrary, there are emergent strategies that are mostly generated from patterns and emergent issues. Each of the approaches have a diverse set of advantages and disadvantages of their own which can easily be offset by aligning both the approaches together to come up with better and robust strategies that is reflected from the organizational performance and competitive advantage. The paper also focuses on strategic renewal and strategic inertia which are two important and coexisting factors within every business context. It is also necessary to create a balance between the two forces so that strategies remain efficacious and emergent in nature, as to reduce and control strategic inertia any company has to conduct regular evaluations and programs that can be a great source for emerging perspectives and strategies. Emerging strategies are also considered to be significant as they help to keep the business up-to-date with the latest changes and transformations in the business environment and can also help to improve and better long term strategic planning and developments.

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