CHAPTER 5

An organization is a collection of resources that are linked together to transform inputs into outputs, and an
organization structure is the framework that evolves (or is designed) to facilitate communication and co-ordination
between organization members so that this transformation can take place. The way an organization arranges its
resources, including its people, and the mechanisms that link these resources and make them cohesive, are
dimensions of an organization's structure. If organizations' environments were unchanging, an ideal organization
structure would optimize the conversion of inputs to outputs and could be left to accomplish the task unendingly.
It is difficult to imagine such a scenario because organizations operate in environments where consumers' choices
can be fickle, where raw materials become scarce, where governments change laws and where shareholders
expectations change. This suggests that organizational members invariably undertake routine and non-routine
tasks. Handy (1993) categorized four different types of organizational activities:
Steady-state activities These activities are routines that account for most of the work of the organization, and are
typical in routine manufacturing, sales and accounting
Innovation Activities These activities are concerned with changing the things that the organization does or the
ways that it does them. They are exemplified in such activities as marketing, product research and development,
process development and innovative training
Crisis activities These are activities associated with dealing with the unexpected and are likely to be encountered
by those departments and people who interface with the organization's environment
Policy making activities These activities are concerned with the overall guidance of the organization.
Handy suggests that if different parts of the organization are responsible for different sorts of activities then the
culture (the norms, values and beliefs) and relationships in sub-units will differ. This means that the activities of
an operations department in a high volume manufacturing plant are likely to have different internal and external
relationships and controls from those of a design department. Although the organizational cultures are not
homogenous, we would expect the sub-cultures to be compatible (otherwise we would probably see a mushroom
cloud above it as it tears itself apart). So, whilst the control mechanisms and motivation may differ for senior
managers, designers and assembly workers, the sub-cultures should be compatible in that they share a common
sense of purpose (see Chapter 6). Different sub-units should be able to work separately but cohesively, so that
they can be differentiated whilst remaining integrated within the corporate whole. In addition to this, the
organization should be able to evolve so that its structure remains compatible with effective strategy creation and
implementation.
These types of issues and the critical dimensions of organization structure that underpin them are explored through
the work of the following key authors:
Alfred Chandler. Larry Greiner. Henry Mintzberg. Michael Goold and Andrew Campbell.
5.1 The work of Alfred D. Chandler: Strategy and structure in
large industrial enterprises
Chandler (1962, 1969) studied large American industrial enterprises. He defined an industrial enterprise as:
... a large private profit orientated business firm involved in the handling of goods in some or all of the successive
processes from the procurement of raw materials to the sale to the ultimate customer.
(Chandler, 1969. p.)
He observed that, as companies grew in turnover, employee numbers, geographical areas served, number of
products sold or manufactured, etc., there was the possibility of an administration crisis before appropriate
structures were developed.
Chandler concluded that new strategies created new administrative needs, but that executives could administer:
Both old and new activities with the same personnel, using the same channels of communication and authority.
Such administration must, however, become increasingly inefficient
(Chandler, 1969. p. 15)
Chandler's research indicated that the solution to complex growth on a number of dimensions - expansion by
volume, geographical dispersion, vertical integration - was through a multi-divisional structure.
The generic multi-divisional structure as described by Chandler has the following features:
1 A general office. 2 Each division's central office. 3 Headquarters for the divisional departments. 4 The field
units.
This is shown in Figure 5.1.
The general office or headquarters is responsible for planning, co-ordinating and appraising the activities of the
quasi-autonomous divisions. The division's central office administers a number of functional departments. The
managers of the functional departments are responsible for the administration of the field offices. Chandler
distinguished between administrative and functional work. Administrative work is the domain of the company
executives and is concerned with two kinds of tasks:
Those tasks that are concerned with the overall co-ordination and efficient operation of the enterprise.
Those tasks that are concerned with ensuring the long-term health of the organization.
5.2 The work of Larry Greiner: Strategy, structure and
organization growth
Greiner's (1972) ideas were developed in the early 1970s before information technology increased the possibilities
for cross- and inter-organizational communication. Nonetheless, the propositions that are implicit in his work are
an important contribution to the frameworks for understanding organization structures:
1 Organizations can and do fail if there is an inappropriate fit
between structure, strategy and environment. 2 Strategy structure misalignments occur when organization struc
ture is rooted in its history rather than its present situation. 3 Successful organizations overcome these problems
by going
through periods of evolution and revolution.
A period of evolution is when the organization experiences a long period of growth where no major upheavals
occur in organization practice. A period of revolution occurs when there is substantial turmoil in organization
life. The model says that organizations require different structures as they grow, and that organizations that
survive are those that change their structures. This is best exemplified by profiling the life stages of a company.
Phase 1: Foundation and early growth
In the beginning the organization is staffed by its founders, who subsequently recruit employees as the company
grows. It has a simple structure, with power resting with the founders, and where control and decision-making is
achieved through informal communication. Handy (1993) has described the culture in embryonic organizations
as a power culture in which the leader sees the organization as an extension of him or herself. As the organization
grows the ability of the owners to maintain control is reduced until there is a crisis of leadership. The informal
manner in which the organization is managed is no longer adequate because it cannot:
cope with higher production volumes; co-ordinate increased employee numbers; motivate employees who no
longer identify with founding ideals; manage both support and primary activities.
The organization can survive this crisis by developing an organization structure that facilitates control and
communication and allows specialist managers to run the company.
Phase 2: Direction
As a result of its growth the organization develops a functional structure (see Figure 5.2) that can support increased
turnover in established and new product areas. The senior management team now becomes responsible for the
direction of the company while those below it assume responsibility for the control of the functional tasks of
production, distribution and marketing As the organization continues to increase in complexity through the growth
in the number of inputs, processes and outputs, there comes a stage when senior managers cannot cope with all
the demands being made on them, and as a consequence junior managers are torn between following procedures
or taking their own initiatives. The emerging crisis requires greater autonomy for junior managers, with failure
occurring when senior managers remain reluctant to delegate, and when junior managers are unable to adjust to
making non-routine decisions.
Phase 3: Delegation
\At this stage the organization can survive by developing an organization structure that pushes some elements of
strategic decision-making down the organization. This gives rise to a structure that retains functional elements
whilst allowing the formation of autonomous units. As Figure 5.3 shows, responsibility for profit and cost control
can be delegated down the organization by the formation of profit/cost centres.
In Figure 5.3, the Sales Manager of Product Group A could be responsible for the profit targets of Product Group
A and have influence over manufacturing and R&D through the creation of an incentive bonus scheme. The
structure would also allow R&D and Manufacturing to be profit centres, so that they could charge other Product
Groups for work undertaken. Decentralized structures like these seek to give greater responsibility to local
managers, with overall control being managed through output targets.
The decentralization of responsibility and power also encourages the development of relationships between
middle managers, which can make senior executives uncomfortable if they feel that the growing influence of
functional and line managers reduces their overall level of control within the diversified organizational structure.
If managers do become parochial and run their own individual units as quasi-independent businesses, then co-
ordination and integration with the rest of the organization can be inhibited.
Phase 4: Co-ordination
The solution to these problems, according to Greiner, is to move to divisional structures that are co-ordinated by
formal planning procedures within and across central, divisional and functional areas (see Figure 5.4). These
structures can have activities that have both a functional role within divisions and be centrally co-ordinated:
accounting and finance, for example, can have central and divisional arms. The danger with these structures is
that they can become over bureaucratic and induce a crisis of red tape, and in these circumstances it is likely that
organizations will have to progress to some form of collaborative structure.
Phase 5: Collaboration
In this phase the emphasis is on collaboration between divisional groups and between the centre and these groups,
which can be made possible through a move to a more matrix style structure like the one shown in Figure 5.5.
Greiner was optimistic that the use of matrix structures and the development of managers with appropriate
behavioural skills would overcome 'red tape crises' in larger organizations, even though it was not specified how
these ideas would be put into practice.
In this matrix structure the divisional manager of Product Group A in Asia reports to both the Product Director
and the Regional Director. It is designed to increase collaboration, although the multiple intersections within the
matrix structure can be a source of potential conflict and confusion.
5.3The work of Henry Mintzberg: Control and co-ordination in organizations
Mintzberg (2002) recognized that an organization's structure is not only dependent upon its age or size but is
affected by other situational features, such as: the nature of the technology used in its transformation processes.
the nature of the environment. the distribution of power inside and outside of the organization.
All organizations have units whose task is to provide the service or produce the goods that define the
organization's purpose. This is the operating core. The overall control of the organization is in the hands of the
strategic apex. In small organizations, the organization can consist of just the operating core and the strategic
apex. However, as the operation grows a hierarchical mid dle line is created between the strategic apex and the
operating core
As the organization becomes more complex two additional groups of peo ple may be required:
I
Those people who Mintzberg describes as analysts, who are responsible for designing the way others do work
this is the tech
estructure and it exists outside the hierarchy of line authority Those people who supply support services to the
organization, such as legal advice and canteen facilities
2
Mintaberg also suggests that every 'active' organization has an ideology (ana logous to Johnson's cultural web
(see Chapter 6)).
Each of these six components (ie, the operating core, the strategic apex, the mille line, the technstructure, the
support services and the leology) plays a role in the production of an organization's outputs. For this to be
produced organizations also have to have mechanisms of coccination Organizational ordination, according to
Mintzberg, is facilitated through six basic mechanisms:
1 Mutual adjustment. 2 Direct supervision 3 Standardization of work processes.
Standardization of outputs. 5 Standardization of skills. 6 Standardization of norms
By using Mintarg's model it is possible to discuss the ways that com nication and coordination can occur in
different organisation structures.
5.3.1Communication and co-ordination in simple structures
In simple structures the prime coordinating mechanism is direct supervision by the strategic apes. The structure
of a general store is shown in Figure 5.6 and in this structure coordination is through direct supervise, although
maladjustment and formal informal work standardization are also present The process is informal with the key
driver being the owner manager.
5.3.2 Communication and co-ordination in machine organizations (eg traditional manufacturing firms)
The biggest part of the organization is likely to be the operating core. The prime coordinating mechanism in the
operating core is work standardization, which means that the techno structure is important (although other
mechanisms are also likely to be present)
Many traditional manufacturing firms have functional structures, which means that there is a requirement for
control and co-ordination within and across functions. The co-ordination within functions will be significantly
affected by the nature of the work done. Co-ordination in functions that are professionally stafled and involve the
production of variable and complex outputs, such as research laboratories or design offices, will differ from co-
ordination in functions that conduct routine repetitive tasks.
5.3.3Communication and co-ordination in innovative organizations
In this kind of organization co-ordination will be characterized by mutual adjustment - but since many participants
will have been through professional training there will also be skills standardization. This suggests that there will
be some supervision, perhaps similar to that shown in Figure 5.7 which depicts the relationships of one person
with four others (group size is 5).
In a group of 5 there will be 10 relationships. When the group size is 10 there are 45 relationships. This means
that for a group size of there are (n-1)/2 relationships. If a group of size n increases in size by I the number of
relationships in the group increases by n. Groups will therefore require a different kind of co-ordination
mechanism if they grow beyond a certain size because simple mutual adjustment will not be possible. Large-scale
mutual adjustment could be possible, however, if groups have leaders or representatives who liaise with other
groups. Mutual adjustment is then sustained by having a hierarchy of groups.
5.3.4 Communication and co-ordination in missionary organizations
Mintzberg describes an organization that is dominated by its ideology as a missionary one. The outputs of this
type of organization and the activities of its members are largely controlled by the values that the organization
member shares with his or her colleagues. Missionary organizations have strong cultures that are perpetuated by
effective indoctrination of new members followed by reinforcement rituals, routines and symbols.
5.3.5
Communication and co-ordination in divisional structures
Mintzberg (1995) observed that the role of the centre in divisional structures is: to develop corporate strategy. to
arrange the movement of funds between units. to devise and operate a performance control system. to appoint and
replace divisional managers.
Divisional structures were designed to allow the center to focus on decision-making in specific business areas.
The objective is not to free the units from central control - it is to maximize the center’s ability to control units
and to be able to communicate more effectively with them. Mintzberg (1995) writes:
Alfred P. Sloan introduced the divisional structure to General Motors in the 1920s to reduce the power of its
autonomous business units, to impose systems of financial controls on what had been a largely unmanaged
agglomeration of different automobile businesses
(Mintzberg. 1995. p. 648)
The nature of the relationship of the corporate center to its divisions has also been investigated by Campbell and
Goold (1988).
5.4 The work of Goold and Campbell and their associates:
Management styles in divisional structures
Michael Porter (1987a) concluded that when companies acquired other companies, the result of the union did not
always produce more shareholder value than when the companies operated independently. The suggestion is that
the centre can either reduce or enhance the performance of a subsidiary business unit. A key issue is the
relationship between each business in a corporate portfolio and the role that the centre has in creating value for
each business. This value can be achieved either by directly injecting value-generating resources or competences
into the business or by facilitating synergistic links between businesses where such synergistic value would not
be by the businesses acting alone. Simply injecting capital into a business is therefore unlikely to increase
shareholder value, which means that if the corporate centre does not contribute to the business there is no rationale
for the link to be maintained. Porter (1987a) suggested three ways in which the centre can add value:
1 By acting as a portfolio manager, in this scenario the centre acts as an informed banker and adds value by
ensuring sound financial divisional control. The centre is expert in developing and implementing control systems.
2 By facilitating the transfer of skills between business units.
3 By facilitating the sharing of activities.
Campbell and Goold (1988) looked at how corporate centres add value to business units, and their findings suggest
that corporate success depends on the style, the corporate centre adopts, how well it implements that style and the
fit of that style with the organizational situation.
They suggest that there are three styles that can be successful:
1 Strategic planning style. 2 Financial control style. 3 Strategic control style.
5.4.1
The strategic planning style
The strategic planning style is characterized by: strong central leadership an emphasis on co-ordination and co-
operation (formalized mutual adjustment). mechanisms for thorough review and analysis. the setting of long-term
strategic objectives. the willingness to change strategies to meet changing circumstances.
Organization structures in strategic planning companies are often of a matrix nature because it allows the centre
to facilitate co-operation across a range of businesses. This approach seeks to create strategic options for business
units that draw upon and utilize the expertise of the whole corporate entity. It would also provide an appropriate
mechanism for the identification of synergies, through co-operation, across units.
5.4.1.1
Potential strengths of the strategic planning style The centre is able to challenge ideas and attitudes more
competently than outside bankers and investors. By the process of interaction and leadership an effective central
management can lead the business unit into developing more creative and ambitious strategies than would come
out of single businesses. The centre can buffer the business unit from short-term financial pressures that stock
markets and other investors may place on single businesses. The business unit can therefore adjust strategies in
order to gain long-term benefits rather than be forced to concentrate on short term financial targets.
5.4.1.2
Potential weaknesses of the strategic planning style Business managers have less clear-cut responsibilities and
less autonomy, which can lead to de-motivation. The decision-making processes can be slowed down. In the worst
cases the whole system can become unwieldy and bureaucratic. There is a risk that the centre can be seen to be
autocratic and illinformed, resulting in a perception, and sometimes a reality, that good opportunities are missed
through a lack of fit with the overall corporate plan. An obsession with the long term can lead to the neglect of
important operational issues and the need to generate profits in the short term. The business environment can be
over-protected from harsh competitive realities, inducing complacency in business units.
5.4.2
The financial control style
The financial control style is characterized by: autonomy of divisions and local leadership. an emphasis on control
through budgets (control by output standardization). strategy direction is set locally. the setting of financial
objectives and allocation of resources based on the historical ability to deliver those objectives. tight financial
control by the centre.
Organization structures in financial control companies stress independence, with divisions reporting directly to
the centre with little cross-division liaison. There is no obvious added value from links between divisions.
5.4.2.1
Potential strengths of the financial control style Financial control organizations are more demanding of the
business units than banks or stock markets. They impose tight controls which are tightly monitored, with under-
achievement being quickly addressed. This can motivate divisional managers to think about their strategies so
that they can deliver above average performance, The simplicity of accountability also provides managers with
clear guidelines of the centre's expectations of them. The centre reinforces the focus on performance by allocating
investment Ull the basis of performance. In similar fashion, under performing units will be divested. Financial
control organizations search for acquisition candidates that are performing poorly with respect to return on assets,
with the intention of turning them around through the application of financial control disciplines.
5.4.2.2
Potential weaknesses of the financial control style Some critics claim that the focus on short-term financial
measures encourages revenue maximization at the expense of investment needs. Evidence suggests that financial
control companies can miss out on long term and more speculative investments due to the desire to operate in
financially predictable environments.
5.4.3 The strategic control style
Strategic control companies try to position themselves between financial control companies and strategic planning
companies. Businesses are grouped into divisions but the centre maintains a closer interest on strategy than
financial control companies. The intention of the intermediate position is to gain advantages that accrue to both
financial control and strategic planning companies.
Strategic control companies:
Try to ensure that subsidiaries do not get trapped into inappropri ate mind-sets by allowing overlap of centre and
subsidiary management functions, and by implementing strategic review processes (control by formalized mutual
adjustment). Facilitate business unit collaboration without being over-active in the co-ordination of that
collaboration. Provide access to resources so that subsidiaries can finance long-term or risky projects that would
be difficult to finance through capital markets The investments are supported because the centre has detailed and
'expert' knowledge of the subsidiary businesses. It also protects the business units from the short-term expectations
of capital markets.
5.4.3.1
Potential strengths of the strategic control style It allows the individual businesses to take a long-term view on
investment decisions and implementation performance. There is an awareness of the need to balance long-term
goals and short-term performance.
5.4.3.2
Potential weaknesses of the strategic control style It can become bureaucratic and there is confusion between
strategic control and financial control The whole corporation may be unable to raise funds in situations where the
individual businesses could. Business can be over-protected from the disciplines of the markets.
The ability of the centre to add value is therefore crucial to the success of these conglomerate companies. If the
centre cannot add value then there is no justification for the link. The term 'corporate parenting' has been coined
to describe the relationship between businesses in corporate portfolios. Good parents avoid the weaknesses of the
strategic style and are able to add value to their children'. Campbell et al. (1995,1998) suggest that good parents
positively intervene in situations where:
The unit managers have a misguided conception of what the business should be the market scope may be too wide
or too narrow, or there is too much or too little vertical integration. The administration systems are too
bureaucratic or are underdeveloped. Managers start to make inappropriate strategic decisions. There are
opportunities for links with other businesses. Environmental change requires special expertise. This special
expertise can be supplied to a number of businesses facing the same conditions.
Owen and Harrison (1995) recount that ICI split into ICI and Zeneca because one board was unable to give
parenting advantages to what had become two distinct business groups.
Summary
The relationship between operating efficiency (strategy implementation), strategy creation and organization
structure requires that strategic managers ask three important questions:
1 Is the present structure of the organization allowing the organization to operate as efficiently as alternative
possibilities?
2 If we wish to make changes to the organization's outputs, are our
choices constrained by our structure, and if we change strategy, can
we change structure? 3 Does our structure constrain the way we develop strategy?
The underpinning economic logic is that organizations only grow to significant sizes when inputs are turned into
outputs more efficiently by large organizations than small organizations (though other factors, such as
monopolistic practices and innovation, are clearly important). Organizations that grow have to therefore 'find'
structures that allow this growth. If structures do not accommodate growth economically, then growth will not
occur - i.e.it must be more profitable to produce on a large scale rather than on a small scale. This means that
there must be methods and structures to support increasing returns to scale if organizations are to grow. In other
words, as organizations grow they must 'find' structures and processes that allow this growth to be profitable.
It is also worth noting that strategy has the potential to precede structure, as when production lines were introduced
into car manufacturing, and that strategy can follow structure, if these production line methods are then applied
to different industries. Organizations also take fewer risks when they accommodate new strategic directions
within existing organizational config. urations (structures, systems, resources). Peters and Waterman (1982) aptly
said they stick to the knitting. The danger is that the new direction cannot be accommodated within existing
configurations.
When organizations develop structures they develop systems of control, communication channels and cultural
entities that subsequently affect how strategies develop. Miller (1986, 1987) has demonstrated how structure
influences strategic decision-making and how particular kinds of strategies are associated with different kinds of
strategic postures. Companies following cost leadership strategies will therefore manage their activities in
different ways than those following differentiation strategies. Decisions about structural configuration will affect
both operating efficiency and strategic decision-making. In other words, strategy implies structure and structure
influences strategy creation,
CHAPTER 6

In addition to recognizing the crucial role that managers play in shaping the destinies of organizations, it is
important to acknowledge and to take into account other influences on strategy formation. Looking at strategy-
making processes more generally, Mintzberg and Waters (1985) identified two dominant strategic patterns, which
they subsequently termed deliberate strategy and emergent strategy. Deliberate strategy, as its name implies,
advocates purposeful and planned actions using careful and logical analysis upon which impartial decision-
making can be applied. Emergent strategy, on the other hand, incorporates the view that some indeed many)
organizations do not articulate and formulate strategy through formal processes, even though they have coherent
business strategies. In this explanation of strategy formation, strategy is crafted rather than planned and is
discernible as a pattern in a stream of actions. This is a useful definition for organization analysts as it allows
strategy to be inferred from actions; the analyst is more likely to notice actions than to be present at the decision-
making that provoked those actions. It also allows us to propose theories that account for these actions, and if the
theories withstand scrutiny, they can be used to develop explanations that enable us to understand strategy
formation processes. Yet it is also the case that theories of strategy making processes should be treated cautiously
because they may be consistent with the facts but may not be true explanations. Mintzberg et al. (1996), for
example, have shown how Pascale's analysis of Honda's entry into the US motor cycle market gave a completely
different interpretation to events than did the Boston Consulting Group working from a rational planning
positioning perspective (Pascale, 1996).
6.1 Strategy-making dimensions
Numerous studies have emphasized the following dimensions as being particularly important in strategy
formation:
A rational dimension. An environmentally determined dimension. A political and cultural dimension.
6.1.1
The rational dimension of strategy
Strategy, in rational models, develops out of logical processes. The emphasis in early rational models was on
strategy conception prior to strategy implementation, while later models (such as the logical incremental models
of Ouinn and the process and umbrella strategies of Mintzbere and Waters) recognized the limitations that
managers have in realizing and understanding the totality of their environment. This would imply that manager
formulate strategic directions in rational but imperfect ways.
6.1.1. Strategy creation preceding strategy implementation Mintzberg (1994) describes two different strategy-
making approaches under the headings design school and planning school. Both approaches work from the
premise that strategy creation comes before strategy implementation. In the design school, strategy
conceptualization resides in the hands for the minds of the organization's senior managers The chief executive
would normally be the key strategist, with implemen tation being carried out by subordinate managers - the
underlying emphasis clearly being that strategy conceptualization should be kept sim. ple and easily
understandable. The design school originated in the 1950s and is seen by many as the foundation stone upon
which melern strategic management is built.
The planning school, as the name implies, develops strategy out of careful analysis and planning. Early strategic
planning models assumed that strategies could be developed in situations of complete knowledge, where the
environment could be fully comprehended so that the strategic plan could be made with certainty. Experience and
research have shown, however, that these expectations were frequently not realized Lenz and Lyles (1985), for
example, have criticized 'excessively rational planning processes on the basis of studies carried out in financial
and commercial organizations. They found that some strategic planning models treated the world of business and
commerce as if it was easily reducible to predictable outcomes, disregarding managerial experience and ignored
all data that could not be quantified. Wilson (1991) als describes the GF experience, one in which the planning
process became an end in itself and the planning stall, not the managers, took control of strategic plan ning. Grant
(1995) reinforces this view when he outlines the feelings of Jack Wekch, the Chief Executive of GE, who forcibly
describes the stra tegic planning system of the 1970s as slow, inefficient of meermalm and siling of
and opportunism. More positively. Wilson (1994) describes how strategic planning became more effective when
the plan. ning process was drivs dewi the area. In these circumstances strategic planning promoted strategic
thinking
Ansof (1987) ascribes the failure of many strategic planning initiatives to the inability of organizations to sustain
them once the initial enthusiasm had worn ofl. There are three main reasons, he argues, why strategic planning
fails (after Ansoll, 1987. p. 196):
1 'Paralysis by analysis, which is induced when existing and previous
strategic activity (ie, their strategic plans) produced little by way of
results in the market place.
2 Organizational resistance to the introduction of strategic planning
into the business
3 Withdrawal or relaxation of forceful support for strategic planning
by top management.
Overcoming the potential hurdles was felt to be important, as Anal believed that formal strategic planning
provided a framework for strategic thinking that was essential for improved organizational performance. It
involved the integration of three management disciplines if strategic planning was to be effective
Strategic planning is only one of three processes which must be brought together to assure effective strategic
adaptation. The other two processes are management capability planning and management of the overall process
of strategic change
(Ansoff, 1987, p. 197)
This is especially important in turbulent environments since it can be linked to strategic control systems that
enhance the management of change. It suggests that strategic planning can become strategic management if extra
processes are integrated into it.
More negatively, the intensity of the criticism that has been leveled at strategic planning has been significant.
Mintzberg (1994), for example, argues that strategic planning corrupts strategic thinking
Conventional planners may believe that managers are too involved in the details to reflect. But effective managers
may know that only by being so involved can they reflect To think strategically, in other words, they must be
active involved, connected, committed. alert, stimulated. It is the calculated chaos of their work that drives their
thinking anabling them to build reflection on action in an interactive process.
(Minberg 1994, 291)
Porter (1987) attributes the failure of many strategic planning exercises to a lack of strategic thinking. He lays the
blame for this in the separation of planning from action
Planning must become the job of line managers, or of head office sa...Today Every CHOCve needs to understand
how to think strategically
(Porter, 1987, p. 28)
Grant (1995) expresses similar thoughts
One of the most important changes in strategy making in large enterprises over the last two decades has been the
shit in responsibility for strategy formulation from
Corporate planning departments to line managers. One of the benefits of this transition is that the strategic
planning processes provide a highly effective mechanism for dialogue between corporate and divisional managers
and between general managers and functional specialists
(Grant, 1995, p. 22)
6.1.1.2 The coalescence of strategy creation and strategy implementation in a departure from previous thinking.
Quinn (1978) observed that managers attempted to be rational but because they were aware of the unpredictable
nature of their environment, they relaxed some of the constraints usually associated with the design school. The
strategic management process that he observed moved forward in what was described as a logically incremental
manner. It involves senior manager developing an overall direction whilst simultaneously allowing lower level
managers the room to develop and negotiate how that direction should be followed. This permitted in managers
to be more prov al in the sense that it allowed and immodated sudden and unexpected changes in the business
environment. The suggestion is that managers will be both rational and cautious as it is rational to be cautious in
unstable environments! By constantly monitoring and interpreting the business environment a strategy can be
consistent with its environment, and improve its chances of success.
The key features of logical incrementalism are outlined as follows (adapted fron Quinn, 1978):
In the initial phases of strategy development, the top executives for cast the events that are likely to have the most
impact on the company. They then try to develop a resource base and a corporate posture that can withstand all
but the most devastating events. They select resources and market positions that they can competitively dominate,
whilst simultaneously trying to maintain an ability to change They then proceed incrementally, responding to
unforeseen events as they occur, building on Success and cutting out losses from failed activities They constantly
reassess the future, finding new relationships and seeking to align the organization's TESOURCES to the
environment, never quite achieving the perfect fit as events always keep changing
Minterberg and his co-workers investigated strategy formation over an extended time period using case studies
(see Mintzberg and Waters, 1982: Mintaberg and McHugh, 1985) and they concluded that strategy had deliberate
and emergent characteristics. They were seen to range from completely planned strategies, with managers in total
control through umbrella and process strategies where managers have some control to imposed strategies with
managers having no control. Their analysis also suggested that strategy development had the following eight
features and development characteristics (adapted from Mintzberg and Waters, 1985):
1 Planned strategies assume that deliberate strategies can emerge
from plans developed by the central leadership 2 Entrepreneurial strategies occur when strategy is formed and led
by an
organization leader and can exhibit deliberate and emergent qualities. 3 Ideological strategies excur when all
organizational members are
dedicated to a common cause (strategies are largely deliberate). + Umbrella strategies excur when senior managers
define strategic
boundaries but allow lower levels to define specific market positions (control is through performance targets,
exhibiting deliberate and emergent characteristics in what could be termed a deliber
ately emergent style). 5 Process strategies occur when organization leaders design the pro
cesses and systems upon which the organization's strategy creation and implementation is founded, leaving the
details of strategy to emerge from these systems (again exhibiting deliberate and emer
gent characteristics in a deliberately emergent fashion). 6 Unconnected strategies occur when actors within
organization fol
low their own desires. Coherent strategies emerge through the deliberate intentions of individuals and from the
fact that these individuals have followed similar training schemes and have cogni
tively and organizationally equivalent standards. 7 Consensus strategies cur when actors mutually adjust through
consistent trade-ots, with the strategies emerging from the consensus. & Imposed strategies originate outside the
organization through the
explicit imposition of the wishes of outside bodies, or implicitly by constraints on managenal choices.
These characteristics are similar to logical incrementalism in the partial acknowledgement of a strategic design
and the concept of adaptive learning. They also differ from logical incrementalism in that strategies can form
outside centrally devised frameworks, and because a number of mechanisms of strategy formation are possible.
6.1.2
The environmentally determined dimension of strategy formation
We can discuss environmentally determined strategy in two ways:
1. Past choice constrained strategy.
2. Externally imposed strategies.
Past choice constrained strategy When we define strategic management as the management task that includes the
activity of fitting an organization's resources to its environment, we are recognizing that an organization's strategy
is constrained by its environment. As organizations commit more and more resources to particular market
positions they become increasingly committed to those positions. Using an ecokry metaphor, Hannan and
Freeman (1977) suggest that as organizations adapt to a particular environment they become less flexible.
Organization's choices are constrained not only by an explicit cultural dimension in the sense of 'What we believe
around here' but also by what skills and resources are available, and in what context the skills and rences become
valuable the 'What we can do around here question. In this sense strategies are constrained by path dependency
(choices made in the post constrain choices that can be made now. If the environment changes substantially
organizations that have been unable to adapt will fail
Extrally imposed strategies Many organizations have to respond to the con straints imposed upon them by outside
stakeholders. The actions of organisa tions, for example, can be constrained by the expected responses of
competitors, suppliers or customers. Indeed, many public sector organisa tions, including those in the health and
education sectors, are constrained by government regulation and funding.
6.1.3
The political and cultural dimensions of strategy formation
From a cultural point of view, understanding the beliefs and bureaucratic systems of organizations is essential if
we are to explain the decisions that organizations make. Pettigrew (1973), for example, suggested that power was
a dimension of decision-making, and that it should be taken into account when we try to explain the actions and
outputs) of organizations. He also suggested that in the pursuit of organizational goals it was ratiemal for man
agens to be political if it produced what for them was the best strategy and similarly, that the organizational politic
should be rational if optimal solutions were to be produced in a comparable Fashion Allian (1971) noted that a
decision that seems irrational from an organizational perspective may be rational from an individual or group
perspective - suggesting that the pol tical context of decisions is integral to any concept of organisational ration
ality. This is supported by the work of Guth and MacMillan (1986), who carried out a survey of middle managers
and found that they were able to successfully intervene to selectively encourage or block important strategie)
decisions. There is also some evidence that managers use formal planning systems as vehicles to communicate
their personal views and exertinence (Langley, 19 Papadakis et al. 1998
In line with the view that strategic decision-making is framed within a political and cultural context, Prahalad and
Bettis (1986) argue that organiza tions have dominant logics, and that these logics are based on the mental maps
developed in the organization's core business For Successful organisa tions the dominant logic underpins their
success, although there is always the danger that management thinking can get stuck in a belief structure that is
inappropriate because it fails to keep pace with changing situations. An explanation for such misalignments points
to managers' perceptions changing M eskwly than their cur t s, a finding
rated in the work of Johnson (1987). Fletcher and Hull (1990). Narayanan and Fahey (1990), and Miller (1992).
The work of Johnson, who developed the idea of the cultural web' shown in Figure 6.1. is particularly useful
because it captures and distinguishes the factors that could constrain managers' worldviews.
The central paradigm' represents the underlying beliefs that managers have about their organization. Johnson and
Scholes describe the paradigm as 'the set of assumptions held relatively in common and taken for granted in an
organization' (1999, p. 59). They distinguish between those assumptions that are implicit and unconsciously held
and beliefs and values that are explicit, openly published, and discussed. Both sets of assumptions are said to be
shaped and influenced by the other components of the cultural web: Rituals and routines These activities establish
relationships between organization members so that they know their places and roles in the organization. Members
accept the rituals and routines because they are generally accepted to be the best way of doing things, and because
their involvement reinforces their own membership rights. Rituals and routines can also have an important
external effect, such as in the service sectors where they can be designed to inform and control customers. Johnson
and Scholes, for example, highlight patient infantalising in the National Health Service, where rituals and routines
have the effect of making many patients feel they are being treated like children. More typical examples include
degree ceremonies in universities, clocking in and out in factories, and stock taking in warehouses. Stories The
stories of the organization reflect those things that are important to the organization, such as tales of achievement
and the doings of heroes and villains. They are signposts to what the organization considers important. Johnson
and Scholes suggest that the stories of health service providers reflect an overriding passion for curing rather than
for prevention and caring.
Symbols These are representations of power in terms of visible images of status (or lack of it) and examples
include the allocation and specification of company cars, the size and decoration of offices, the wearing of
uniforms, and in some organizations, the badges of rank. Symbolism can also be manifested in language and in
the way people are described, as when customers are called clients and when passengers are referred to as
customers. The content of language is also an important indicator of underlying assumptions, such as when
universities talk of profit and loss more than they do standards and scholarship
Pour structures Power can be vested in ownership, by being a member of the elite professional group and by
having control over valuable resources. Examples of power structures include consultants in hospitals, pension
funds with large shareholdings, majority shareholders, trade unions, professional associations, professors in
universities and technical experts in research led companies.
Control systems Organizations control their members through different types of reward and punishment systems.
The principle is simple - organizational action can be driven by organizational rewards, and organization members
respond to rewards more than they do to rhetoric (see Chapter 5). In periods of stability the rewards can be finely
tuned so that they reinforce desired outcomes. Such tuning can be more difficult when strategic change is required
because the reward system is likely to be embedded in the existing and established organizational paradigm. This
can result in the company rewarding action 'A' when it wanted action 'B'. When strategic change is instigated it
is therefore important to design the control system so that it can operate within the existing organizational
paradigm, or that the organizational paradigm is changed, which can be very difficult, so that the control system
can be made to work.
8 can be more cred so that they pens). In pe
Organization structures Organization structures are frameworks that evolve (or are designed) to facilitate
communication and co-ordination between organization members. Indeed, the way that its resources are arranged,
including its people, and the mechanisms that link those resources and make them cohesive, are dimensions of an
organization's structure. They also reflect the power structure in the organization as well as the level of importance
that the organization puts on the control of certain key inputs and outputs.
The cultural web can also be a powerful tool in conceptualizing an organization's dominant logic on important
strategic questions such as:
Who are the organization's customers? What are their needs? What activities do we reward? Who are the most
powerful stakeholder groups? How do we keep powerful stakeholder groups happy? What must we be good at to
keep customer happy?
The health of an organization's dominant logic can be gauged by how consistent it is with the provision of outputs
that satisfy customers. An organization can have an unhealthy dominant logic if it is so well established it prevents
organization members responding adequately to environmental changes. If an organization cannot respond to
environmental changes then its strategy cannot be consistent with success. For a commercial organization this
might manifest itself as a tendency for its products to become less attractive to customers, with market share and
profits declining. Johnson (1988) has described how the influence of an inappropriate organizational paradigm
(i.e. an unhealthy dominant logic) means that incremental strategy development becomes illogical because it is
based on an inappropriate perception of the environment. Organizations may also find that logics that are
satisfactory for one industry or segment are not suitable for operating in other industries or segments. This can be
linked to the idea of parenting, which is discussed in Chapter 5.
The influence and power of dominant logics on organizational behaviour is captured in the following scenario
and story:
Start with a cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs
under it. Before long, a monkey will go to the stairs and start to climb towards the banana. As soon as he touches
the stairs, spray all of the other monkeys with cold water. After a while, another monkey makes an attempt with
the same result that all the other monkeys are sprayed with cold water. Soon, when another monkey tries to climb
the stairs, the other monkeys will try to prevent it Now, put away the cold water. Remove one monkey from the
cage and replace it with a new one. The new monkey sees the banana and wants to climb the stairs. To his surprise
and horror, all of the other monkeys attack him. After another attempt and attack, he knows that if he tries to
climb the stairs, he will be assaulted. Next, remove another of the original five monkeys and replace it with a new
one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with
enthusiasm! Likewise, replace a third original monkey with a new one, then a fourth and then the fifth Every time
the newest monkey takes to the stairs, he is attacked Most of the monkeys that are beating him have no idea why
they were not permitted to climb the stairs or why they are participating in the beating of the newest monkey
After replacing all the original monkeys, none of the remaining monkeys have ever been sprayed with cold water.
Nevertheless, no monkey ever again approaches the stairs to try for the banana. Why not because as far as they
know that's the way it's always been done around here. And that my friends, is how a company policy begins
(Source: Wake up to Wogen, BBC Radio 2.22 January 02, the programme producer Paul Walters who supplied a
written copy of the quote, received it from a listener Mark Pils)
An important consideration when discussing strategy development is the natwre of the power halance within
organizations (Cohen et al 1979. Mintherg 1979). When organizations have structures in which the strategic apex
has considerable power strategy development is more likely to be centrally guided. Correspondingly, when power
is dispersed evenly through organization strategy development is likely to emerge from various parts of the
organization.
6.2 Integrative frameworks: Strategy-making as a complex
amalgam of different processes
The work of Mintzberg and his colleagues initiated the concept that strategy was both deliberate and emergent
and was formed by more than one mechanism. Indeed, the use of multi-model explanations is widely used to
explain complex phenomena in other disciplines, such as surface adhesion in the natural sciences. The application
of multi-model explanations are also important within the strategy making literature, with writers like Bailey and
Johnson (1992, 1995, 1996) using more than one process model to explain strategic management processes.
Explanations that developed out of the planning school tried to be overtly rational and were subsequently
superseded and complemented by theories which recognized that realised strat egy arose out of situations where
there was incomplete information and environmental unpredictability. This complexity can incorporate
conflicting interpretations as well as multi-stakeholders with different and competing objectives (Johnson, 1987).
McLellan and Kelly (1980) point out that strategy formation in commercial organizations is characterized by
mechanisms that have a number of top-down and bottom-up approaches. Chaffee (1985) states that strategy
making processes incorporate linear, adaptive and interpretative processes. Linear processes are typified by the
strategic planning model of Andrews (1971), while adaptive and interpretative processes progressively encompass
the beliefs that are individually and collectively held about the nature of the organization and its environment.
The three types of strategy making processes are progressive because organizations use increasingly more
complex strategy forming processes as they evolve: from linear to adaptive to interpretative, there is
organizational learning. Chaffee also suggested that different kinds of strategy making could co-exist in the same
organization. This is supported by the cognitive mapping literature, which says that involvement in formal
processes increases strategic sophistication, and that successful organizations are more strategically sophisticated
than their less successful competitors (Narayanan and Fahey, 1990; Maznevski et al., 1993)
Work undertaken by Bailey and Johnson (1992, 1995, 1906), Hart (1902) and Hart and Banbury (1994) provided
operationalized and integrative frameworks for describing strategic processes. Hart focuses on the roles that
organization actors play in strategy-making and how senior managers use Ha w lerle dillerent surtegy-making
modes. Bailey and Jobs take a different perspective and portray strategy as having different dimensions that help
explain strategy-making within the context of those dimensions. In the Hart typology the emphasis is on managing
process because he sees a link between strategy making modes and performance, which is subtly different than
the Bailey and Johnson approach that recognizes that process can constrain managerial action and that strategic
configurations can be a product of organizational context. The Hart typology proposed five strategy-making
modes (Hart and Banbury, 1994), 1 Command Where the chief executive and a few senior managers
decide strategy. Symbolic Where strategy is driven by a mission and a vision for the future. The chief executive
sets this vision and mission. The chief executive has a dream about where the organization will be in 20 years.
This dream is communicated throughout the organization Rational Where strategy is driven by formal structure
and plan
ning systems. 4 Transactice Where strategy is made on an iterative basis involving
managers and staff in an ongoing dialogue. The business planning in this organization is incremental involving
everyone to some degree in the process. This organization continuously adapts its
strategy based on feedback from the market. 5 Generative Where most people in the organization are prepared
to use their initiative. People are encouraged to experiment with innovative approaches. Organization members
understand what the organization needs to achieve if it is to prosper.
Strategy modes that involve the whole organization are likely to produce more effective strategies than those that
do not. Hart also points out that particular modes lead to particular performance outcomes. The rational mode,
with its emphasis on decision control, can be associated with financial performance and profitability, whilst the
transactive mode, which is more consultative and incremental, can be related to quality and social responsibility.
The idea that different strategic processes will emphasize particular per formance measures is intuitively rational,
though the idea that these can be separated out in the long run is less credible. For example, the separation of
quality from profitability runs counter to other studies that specifically relate quality to profitability (Buzzel and
Gale, 1987). Also, in a small organization a command mode of strategy-making could ensure high performance
on a number of measures whilst in a large complex organization the interdependence of performance measures
reduces the likelihood that each perfor mance measure is not related to the sum of the strategy-making processes.
In light of this it would seem more useful to consider strategy-making processes in context rather than relate
individual modes to particular measures
The underlying argument is that as organizations become more complex the strategy-making processes must
match that complexity, with more people becoming involved in the process (Ansoff (1987) termed this the
requisite variety hypothesis).
Bailey and Johnson (1996) propose six dimensions of strategy development. These are Planning, Political,
Incrementalism, Command, Cultural and Enforced Choice. It is argued that one or more of these describe the
strategy-making process of any given organization. The number of possible combinations on six dimensions is
forty-nine, although it is argued that only a limited number of configurations exist. Their research indicated that
there were six dominant configurations:
Planning Organizations which are predominantly planners have clear objectives, a commonly held concept of
vision and mission and use precise plans to articulate intended strategy and its implementation
One dominant dimension planning
2 Rational com in rational command organizations a senior member
or group dominates the strategy creation process using a planning frame work. This description is very similar to
the Design School approach to strategic planning that is outlined by Mintaberg (1994)
Two dominant dimensions planning and command
3
Lagical ins i s Logical incrementalism is a process that incorporates missions and objectives, and although the
objectives are planned, organiza tos are cautious about setting them rigidly because the environment changes. The
overall process is incremental since the objectives change over time due to the build-up of strategic and
operational pressures, triggering Tassessments and new objectives until future pressures trigger further
reassessments
Two dominant dimensions: planning and incremental
4 Muddling through Political, cultural and incremental dimensions domi
nate this configuration. Progress is made by players bargaining for their own particular objectives within a
framework badan history and ackar understanding of what is, and what is not allowed. Incrementalism results not
only because of reactive adjustments to accommodate a changing environment but also because of political and
cultural influences opposing significant change (Lindblom. 1959)
Three dominant dimensions cultural, political and incremental
5 Externally dependent In this situation strategy is imposed by force outside
the organization Power to modify outside influences is likely to be in the hands of those who understand and can
relate to powerful external players. This situation is typical of organizations being controlled by other
Two dominant dimensions: enforced choice and political
6 Ewted command As the name suggests, this typifies situations where a
leader is charged with turning an organization in crisis around. It is frequently found in smaller organizations in
turbulent environments, as well as in failing subsidiaries where a new leader is parachuted-in to address the
situation. Embattled command has also become more preva lent in the public sector, with failing schools and
hospitals attracting wide spread media attention.
Two dominant dimensions command and enforced choice. The view that structure influences strategy is also well
established within the strategic management literature. Miller (1986) argues that there are particular structural
configurations asiated with particular strategies. In competitive Cvironments, for example, certain configurations
of strategy and structure confer superior performance, and organizations which fail to move towards
6.2 Integrative frameworks: Strategy-making as a complex
amalgam of different processes
The work of Mintzberg and his colleagues initiated the concept that strategy was both deliberate and emergent
and was formed by more than one mechanism. Indeed, the use of multi-model explanations is widely used to
explain complex phenomena in other disciplines, such as surface adhesion in the natural sciences. The application
of multi-model explanations are also important within the strategy making literature, with writers like Bailey and
Johnson (1992, 1995, 1996) using more than one process model to explain strategic management processes.
Explanations that developed out of the planning school tried to be overtly rational and were subsequently
superseded and complemented by theories which recognized that realised strat egy arose out of situations where
there was incomplete information and environmental unpredictability. This complexity can incorporate
conflicting interpretations as well as multi-stakeholders with different and competing objectives (Johnson, 1987).
McLellan and Kelly (1980) point out that strategy formation in commercial organizations is characterized by
mechanisms that have a number of top-down and bottom-up approaches. Chaffee (1985) states that strategy
making processes incorporate linear, adaptive and interpretative processes. Linear processes are typified by the
strategic planning model of Andrews (1971), while adaptive and interpretative processes progressively encompass
the beliefs that are individually and collectively held about the nature of the organization and its environment.
The three types of strategy making processes are progressive because organizations use increasingly more
complex strategy forming processes as they evolve: from linear to adaptive to interpretative, there is
organizational learning. Chaffee also suggested that different kinds of strategy making could co-exist in the same
organization. This is supported by the cognitive mapping literature, which says that involvement in formal
processes increases strategic sophistication, and that successful organizations are more strategically sophisticated
than their less successful competitors (Narayanan and Fahey, 1990; Maznevski et al., 1993)
Work undertaken by Bailey and Johnson (1992, 1995, 1906), Hart (1902) and Hart and Banbury (1994) provided
operationalized and integrative frameworks for describing strategic processes. Hart focuses on the roles that
organization actors play in strategy-making and how senior managers use Ha w lerle dillerent surtegy-making
modes. Bailey and Jobs take a different perspective and portray strategy as having different dimensions that help
explain strategy-making within the context of those dimensions. In the Hart typology the emphasis is on managing
process because he sees a link between strategy making modes and performance, which is subtly different than
the Bailey and Johnson approach that recognizes that process can constrain managerial action and that strategic
configurations can be a product of organizational context. The Hart typology proposed five strategy-making
modes (Hart and Banbury, 1994),
1 Command Where the chief executive and a few senior managers
decide strategy. Symbolic Where strategy is driven by a mission and a vision for the future. The chief executive
sets this vision and mission. The chief executive has a dream about where the organization will be in 20 years.
This dream is communicated throughout the organization Rational Where strategy is driven by formal structure
and plan
ning systems. 4 Transactice Where strategy is made on an iterative basis involving
managers and staff in an ongoing dialogue. The business planning in this organization is incremental involving
everyone to some degree in the process. This organization continuously adapts its
strategy based on feedback from the market. 5 Generative Where most people in the organization are prepared
to use their initiative. People are encouraged to experiment with innovative approaches. Organization members
understand what the organization needs to achieve if it is to prosper.
Strategy modes that involve the whole organization are likely to produce more effective strategies than those that
do not. Hart also points out that particular modes lead to particular performance outcomes. The rational mode,
with its emphasis on decision control, can be associated with financial performance and profitability, whilst the
transactive mode, which is more consultative and incremental, can be related to quality and social responsibility.
The idea that different strategic processes will emphasize particular per formance measures is intuitively rational,
though the idea that these can be separated out in the long run is less credible. For example, the separation of
quality from profitability runs counter to other studies that specifically relate quality to profitability (Buzzel and
Gale, 1987). Also, in a small organization a command mode of strategy-making could ensure high performance
on a number of measures whilst in a large complex organization the interdependence of performance measures
reduces the likelihood that each perfor mance measure is not related to the sum of the strategy-making processes.
In light of this it would seem more useful to consider strategy-making processes in context rather than relate
individual modes to particular measures
The underlying argument is that as organizations become more complex the strategy-making processes must
match that complexity, with more people becoming involved in the process (Ansoff (1987) termed this the
requisite variety hypothesis).
Bailey and Johnson (1996) propose six dimensions of strategy development. These are Planning, Political,
Incrementalism, Command, Cultural and Enforced Choice. It is argued that one or more of these describe the
strategy-making process of any given organization. The number of possible combinations on six dimensions is
forty-nine, although it is argued that only a limited number of configurations exist. Their research indicated that
there were six dominant configurations: Planning Organizations which are predominantly planners have clear
objectives, a commonly held concept of vision and mission and use precise plans to articulate intended strategy
and its implementation
One dominant dimension planning
2 Rational com in rational command organizations a senior member
or group dominates the strategy creation process using a planning frame work. This description is very similar to
the Design School approach to strategic planning that is outlined by Mintaberg (1994)
Two dominant dimensions planning and command
3
Lagical ins i s Logical incrementalism is a process that incorporates missions and objectives, and although the
objectives are planned, organiza tos are cautious about setting them rigidly because the environment changes. The
overall process is incremental since the objectives change over time due to the build-up of strategic and
operational pressures, triggering Tassessments and new objectives until future pressures trigger further
reassessments
Two dominant dimensions: planning and incremental
4 Muddling through Political, cultural and incremental dimensions domi
nate this configuration. Progress is made by players bargaining for their own particular objectives within a
framework badan history and ackar understanding of what is, and what is not allowed. Incrementalism results not
only because of reactive adjustments to accommodate a changing environment but also because of political and
cultural influences opposing significant change (Lindblom. 1959)
Three dominant dimensions cultural, political and incremental
5 Externally dependent In this situation strategy is imposed by force outside
the organization Power to modify outside influences is likely to be in the hands of those who understand and can
relate to powerful external players. This situation is typical of organizations being controlled by other
Two dominant dimensions: enforced choice and political
6 Ewted command As the name suggests, this typifies situations where a
leader is charged with turning an organization in crisis around. It is frequently found in smaller organizations in
turbulent environments, as well as in failing subsidiaries where a new leader is parachuted-in to address the
situation. Embattled command has also become more preva \lent in the public sector, with failing schools and
hospitals attracting wide spread media attention.
Two dominant dimensions’ command and enforced choice. The view that structure influences strategy is also
well established within the strategic management literature. Miller (1986) argues that there are particular
structural configurations associated with particular strategies. In competitive environments, for example, certain
configurations of strategy and structure confer superior performance, and organizations which fail to move
towards these configurations tend to ultimately perish. The idea of different strategy making configurations offers
the possibility that in different organizations different people will have different roles in strategy development,
and that strategy can be developed within as well as at the top of organizations. There is also the possibility that
different decisions will also be made by different processes.