vila--canales

8/7/2019 Vila--Canales

1/4

Proposal for the colloquium onThe Crafts of Strategy: Strategic Planning in Different Contexts, Toulouse, May 2006

Title: Strategic Planning serves different purposes as it grows

Authors: Joaquim Vil, Associate ProfessorIESE Business SchoolAvda. Pearson, 2108034 BarcelonaTel. 34-3-253 42 00Fax 34-3-253 43 43

[email protected]

Juan Ignacio CanalesLecturer in ManagementUniversity of St. AndrewsSchool of ManagementGateway Building, North HaughFife KY16 9SSScotland, U.K.Tel. 44-1334 46 2807

[email protected]

Abstract:This paper builds on a detailed case study of how strategic planning in a middle-sizedcompany has changed to pursue different purposes over time. The evolution from amechanistic approach (back to 1997) to a singular approach, balancing aspects of theplanned and emerging approaches to strategizing (in the 2003-05 period), sheds light onthe interdependences of components of a planning system. Over time, the company haschanged the nature of top management intervention and placed an increasing emphasison the role of middle managers. More importantly, changes seem to be driven by moreelaborated responses to the central issue of why do we want a strategy in the firstplace? Finally, strategy, conceived as a shared framework in the mind of strategists, issubsequently linked with policies for daily action at lower levels, in a way which builds

on the adaptive school and the interpretative notions of strategy.

The deployment of different approaches to strategic planning takes place in a way thatresponds to CEO concerns (f.e. about translating strategy to daily execution, not just for afuture oriented task). The framework outlined helped top management efforts in building ashared understanding of strategic issues and encouraging actions at the front-line which areconsistent with the strategy pursued by the firm.
mailto:[email protected]:[email protected]:[email protected]:[email protected]


2/4

Title: Strategic Planning serves different purposes as it grows

Discussion:Since early 80s a growing number of companies strategic planning has received high

criticisms because it hardly served the purposes it had in its inception. The demands oftoday's competitive environment are at odds with the way formal strategic planning wasdesigned and the culture it induced: the process inculcated a preoccupation with precision andpredictability, sudden external change was viewed as a threat, the need of mid-coursecorrections was viewed as evidence of poor initial planning, etc.

Critics of formal strategic planning have explored alternative approaches to overcome itslimitations and to address CEO's concerns in turning strategic vision into operational reality.Is it feasible to have well defined strategies and be quick in taking advantage ofopportunities? What attributes do adaptable strategy processes have? How does a topmanagement team effectively shape the process to get managers to act coordinately and with

integrated efforts?

There is an open debate in the strategy-making field between the contributions of a synopticdeliberate view of the strategic process (Ansoff, 1991) and of an incremental emergent viewof it (Mintzberg, 1990). Moreover, the bitterness of the controversy and the extreme view oftheir assumptions suggest that there is no single common ground. A number of recentcontributions suggest that the strategy making process is neither completely deliberate norcompletely emergent, for example (Lovas and Ghoshal, 2000). There is general agreement onthat the purpose of strategic planning can no longer be to generate plans; some authorsadvocate that its goal should be to build strategic thinking. Recent notions of strategicthinking and strategy have not been adequately defined and operationalized to make the

useful for managers.

This paper tries to go in depth into some core themes of strategy-making. From the field ofstrategy practice some key ingredients are chosen. These ingredients are assembled intodifferent arrangements in order to set the main themes that may constitute the conceptualanchor of the paper. The theoretical backbone used is the strategy as guided evolution(Burgelman, 1996; Child, 1997; Lovas and Ghoshal, 2000). Along with this foundation, westudy the evolution of how the process is set and which outcomes are expected from it. Otherthemes of interest we build on are, under what conditions does strategy comes out closer tobe emergent or deliberate; how does it relate to the subsequent use of strategy, once it hasbeing conceived. The last theme, on the role of middle managers (Uyterhoven, 1991;

Woolridge and Floyd, 1990). The creation of meaning to managers touches on a topic withgrowing attention within the field (Fabian and ogilvie, 2005).

Our approach takes into account popular approaches and notions widely mentioned in thefield (strategic intent, logical incrementalism, ideal position, strategic flexibility, dominantlogic, adaptability, etc.). We try to study how these are integrated within the strategy makingprocess. Among others, some aspect draw on adaptation and evolution (Burgelman, 1991),self-renewal (Barr et al., 1992), and Quinns logical incrementalism (1978). A contribution ofthis paper is to integrate some of different aspects of the strategy.

The core of the paper is an attempt to suggest how changes in the main strategic planning

approach respond to the basic concerns of the top management team. Conceptualdevelopments contained here are illustrated by the insights drawn from a case study based on


3/4

Real Automobile Club of Catalonia (RACC), a fast growing and leading player in theautomobile-related services industry in Spain (an innovative company which diversified fromits original on-the-route assistance services to be present in several business units).

Data were collected both from primary and secondary sources. The primary sources include

twelve individual interviews with eight different managers (the general manager, the head ofcorporate development and new projects, the manager of a core business area, the head ofhuman resources, and the head of management control and auditing unit). First roundinterviews started in January of 2001. Subsequent interviews took place between May 2002and October 2005.

The research suggests a numbers of aspects which deviate from the more traditional approachto planning (for example, a deviation from the SWOT analysis to overcome some of thelimitations of formal planning). The end logic of purpose and change in the planningapproach is sustained by contrasting our basic propositions with the views of RACCresponsible managers on the strategy planning process. The findings can be synthesized in the

framework, briefly referred as a shared understanding among middle managers aboutstrategic issues, which may contribute to the debate on a number of issues:

How the split between Strategic Intent/Ideal Strategy and Possible Strategy sheds newlight on the tension between what a company would like to do and what it can do, alongthe lines of the future driven strategy (Krinsky and Jenkins, 1997).

How decisions from different departments are better coordinated (given that managershave a better understanding of the common purposes.

Consensus/agreement on objectives (not plans) engenders speed, since it facilitatesdecision making.

It may provide a common language that invites employees at all levels into strategic

conversations and engages them as a result. Consistency between managers thinking and action can be enhanced.

References

Ansoff, H.I. (1991). Critique of Henry Mintzbergs The design School StrategicManagement Journal, 12:449-461

Barr. P.S., J.L. Stimpert, A.S. Huff (1992) Cognitve change, strategic action, and

organizational renewal, Strategic Management Jr. 13, 15-36.

Burgelman, R. A. (1991). "Intraorganizational ecology of strategy making and organizationaladaptation: Theory and field research", Organization Science, 2 (3), pp. 239-262.

Child, J. (1997). Strategic choice in the analysis of action, structure, organizations andenvironment: Retrospect and prospect, Organizational Studies, 18 (1) 43-76.

Krinsky, Robert and Anthony C.Jenkins, (1997). When world collides: The uneasy fusion ofstrategy and innovation, Strategy & Leadership, Jul/Aug 1997, Vol.25, Issue 4, p. 36-43.


4/4

Fabian, Frances and dt ogilvie (2005). Strategy as Art: Using a creative action-based modelfor strategy formulation. In Steven Floyd, J.Roos, C.D.Jacobs, and F. W. kellermanns (Edit.)Innovating Strategy process, Blackwell Publishing.

Lovas, B. and S. Ghoshal (2000), Strtegy as Guided Evolution, Strategic Management

Journal, 21, 9, p. 875-896.

Mintzberg, H (1990). The design school: reconsidering the basic premises of strategicmanagement, Strategic Management Journal, 11:171-195.

Quinn, J. B. (1978). "Strategic change: Logical incrementalism", Sloan ManagementReview., 20, pp. 7-21.

Uyterhoven, H. (1991) General managers in the middle. In J. I. Bower (edit). The craft ofgeneral management, HBS publications.

Woolridge, B. and S. Floyd (1990), The Strategy Process, Middle Management Involvement,and Organizational Performance, Strategic Management Journal, 11, 231-241.

vila--canales

Documents