The Configuration School CH 11

The configuration school defines strategy formation as a process of transformation. The school reflects the two labels configuration, referring to the organization and its surrounding context and transformation, meaning the strategy making process. Because organizational configuration requires strategy making (or transformation), the school is a two sided coin – where configuration occurs so does transformation. While the process of strategy making may set out to change the direction of the company/ organization, the strategy that results ultimately stabilizes the organization. Therefore, change or transformation is the initial proponent of the stability of configuration. Another way to expand on the difference between transformation and configuration is that configuration is typically researched and described by academics where as transformation tends to be practiced by managers or prescribed by consultants.

The premises of the configuration school are the following:

  1. An organization can be described in terms of some kind of stable configuration of its characteristics.
  2. These periods of stability are interrupted occasionally by some process of transformation.
  3. These states of configuration and periods of transformation may order themselves over time into patterns and sequences.
  4. The key to strategic management is sustainable stability but transformation must occur to maintain and manage sustainable stability.
  5. The process of strategy making can be one of conceptual design (academic) or formal planning (management).

Ultimately the configuration school is about managing change and maintaining stability through transformation. The school believes it is important to keep questioning the direction of the strategy by asking: 1. What could change in an organization? The configuration school contributes order to the formation of strategy. Between the wild safari hunt of strategy formation,  the configuration school brings the order and stability needed to transform the strategy in order to make the strategy fit the company’s needs.

The Environmental School CH 10

The formation of this school is a reactive process to the environment surrounding the organization. Those who favor this view consider the organization as passive, meaning they spend most of their strategic formation reacting to an environment that sets the agenda. The premises of the environmental school is as follows:

  1. The environment is a set of general forces and is central to strategy-making process.
  2. The organization must respond to the forces.
  3.  Leadership becomes a passive element for purposes of reading the environment and adapting to strategy of the organization.
  4. Organizations cluster into ecological-type niches or positions where they remain until their resources become so scarce that they die.

The environmental school emphasizes that different situations give rise to different behaviors. The environment can affect the stability,, complexity, market diversity, and hostility of the organization. The environmental school has contributed to the population of organizations, about the environments of organizations, and the many different forms they can take.

The Cultural School CH 9

The strategy formation of this school is through collective processes. Culture can be seen as an objective stand on why people behave the way they do and another way of understanding culture is to consider culture as a subjective process of interpretation, not based on logic. An industrial recipe really describes an industrial culture or even better “how we do things in this industry.” The premises of the cultural school are the following (267-68):

  1. Strategy formation is a process of social interaction, based on the beliefs and understandings of members of a group.
  2. An individual acquires these beliefs through a process of socialization.
  3. Members can only partially describe the beliefs that underpin their culture.
  4. Strategy is deliberate (even if not conscious).
  5. Culture and ideology do not encourage strategic change so much as perpetuation of existing strategy.

Some links between strategy and culture are the following: decision-making styles, resistance to strategic change, overcoming the resistance to strategic change, dominant values,  and cultural clash.

Culture can be considered a competitive advantage because it can not be mimicked and is unique in formation. The school can be critiqued for its vagueness but its unique differences by all industries and environments make it seem vague when really it is dynamic. The cultural school helps bring understanding to the different periods of life of an organization, such as reinforcement, resistance to change, reframing and cultural revolution.

The Power School CH 8

The power school forms strategy as a process of negotiation. The word power is used to describe the exercise of influence beyond the purely economy. Power relationships surround organizations as well as infuse them. There are two types of powers: micro power – deals with the play of politics (inside) and macro power – concerns the use of power by the organization.

The power school presses for a better understanding of the role of organized and unorganized individuals that shape organizational behaviors (micro power). The benefits of politics with in organization are the following:

  1. Politics as an influence can bring the strongest to leadership.
  2. Politics can ensure that all sides of an issue are debated.
  3. Politics may stimulate necessary change of influence.
  4. Politics can ease the path for the execution of change.

Macro power reflects the interdependence between the organization and its environment. The purpose of politics is to accomplish a particular goal without confrontation.

The premises of the power school is as follows:

  1. Strategy formation is shaped by power and politics by internal or external environment.
  2. Strategies that result from such a process tend to be emergent, and take the form of positions and ploys more than perspectives.
  3. Micro power sees strategy making as the interplay.
  4. Macro power sees the organization as promoting its own welfare controlling and cooperating with the external environment.

The power school has contributed in the way of introducing vocabulary such as, “collective strategy.” The school also highlights the importance of politics in promoting strategic change or resisting change.

The Learning School CH 7

1. The Learning School sees strategy formation as an emergent process. This school suggests that strategy is learned over time and will emerge as time and experience mix(177).

2. The primary proponent for the learning school is Mintzberg.

3. The learning school took several stages: disjointed and logical incrementalism, strategic venturing, and finally emergent strategy and then retrospective sense making. The idea of the learning model is that strategy takes time as it is a process that emerges. The process of emergence can be simple yet complex as it evolves overtime (179-207).

4. The premises for the Learning School (208):

                1. Strategy making must above all take the form of a process of learning over time where formation and implementation become indistinguishable.

                2. The collective system (beyond just the leader) learns as a whole to form strategy for most organizations.

                3. The learning process must happen to stimulate thinking retrospectively so that sense can come from action.

                4. The role the leader takes is to manage the process of strategic learning, whereby novel strategy can emerge.

5. Critiques of the learning school:

                – No strategy: before learning there is no strategy

                -Lost strategy

                -Wrong strategy

                -Careful of learning

                With all of this in mind, most companies prefer to have a leader with a vision design the strategy and then learn from the wins and loses to emerge an even better model of strategy.

6. The learning model has brought the “knowledge spiral” which envelops the socialization, externalization, internalization, and combination of learning experiences.  Core competences are also developed through learning and retrospective processing. It is when the company learns openly that the best strategies emerge!

The Cognitive School CH6

1.Strategy formation is a mental process according to the Cognitive School. Strategy is subjective and interpretive according to the human mind and process (150).

2, 3.  There were several leading proponents of the Cognitive Model (152-170):

                1. Cognition as Confusion- Herbert Simon, Duhaime and Schwenk

                2. Cognition as Information Processing- Corner, Kinicki, and Keats: This model has several parts of the human mind as it formulates  beginning with attention , encoding, storage, choice and outcomes.  

                3. Cognition as Mapping – Karl Weick : the map is a mental structure of organized knowledge and thoughts about the future plans.

                4. Cognition as Concept Attainment—Herbert Simons: Because strategy is a concept, strategy making is concept attainment.

                5. Cognition as Construction – Gregory Bateson: This portion of the school focuses on interpretation of strategy and construction of it.

4. Premises of the model (170):

                1. Strategy formation takes place in the minds of the strategist.

                2. Strategies emerge as perspectives.

                3. Inputs flow through the human minds filters before being decoded by the cognitive maps humans design.

                4. Strategies are difficult to attain and difficult to change.

5. A common criticism of the Cognitive School  stems from its subjectivity. Because the strategy formation is subject to the minds and conceptual maps of the individual, formation is very different and inconsistent along the board (172).

6. The cognitive school has brought the awareness and importance of the human mind. The school tells us that “we had better understand the human mind, as well as the human brain if we are to understand strategy formation” (173)

The Entrepreneurial School CH 5

1. The foundation upon which the entrepreneurial school was built was on vision. The central concept is in the vision which is a mental representation of strategy created by a leader. The strategy formation process leans specifically on a single leader with innate mental processes and responsibility for the success of the business (124).

2. The leading proponents of the model grew from economics. Karl Marx and Schumpeter introduced the formation of a strategy through leadership (125).

3. The basics of the model is that strategic thinking is “seeing” or having a vision for the entire organization. It involves seeing ahead and behind, down and below, beside and beyond, and through(126).  

4. The premises of the model (143):

                1. Strategy exists in the minds of the leader as a perspective vision for the future of the organization.

                2. Strategy formation is rooted in the experiences and intuition of the leader.

                3. The leader promotes the vision.

                4. The vision is malleable.

                5. The organization in a sense if malleable.

                6. Entrepreneurial strategy tends to niche in defense against competitors.

5. Criticism and Critiques of the School:

                Stacey claims many “harmful consequences of vision”

–          The vision is neither “concrete or possible” when the future is unclear.

–          The vision is too tight and not flexible.

–          The vision can be unrealistic and a burden on the leader.

   All in all, the entrepreneurial school is risky as it does hinge on the “health and whims” of a passionate individual.  

6.  The contribution that the Entrepreneurial School has provided in the way of strategy formation is the point of vision. Vision is important when formulating a strategy and a fearless leader is too.

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