Development of a Strategy is concerned with the long-term and future decisions. The organizations formulates, analyses, selects and implements a strategy. Later, the organization follow-up, evaluate and improve the strategy in view of the competitor’s attack and / or counter attack. Thus, the strategic development is a continuous process rather than a momentum upspring.
Different Patterns of Strategic Development
The different patters or forms of strategy development include:
- Incremental strategy development,
- Intended and realized strategies
- Emergent, opportunistic and imposed strategies.
1. Incremental strategy development:
Organizations, mostly change infrequently and strategies are formed gradually or through piece meal change. During these periods some strategies are changed, some are remained constant, some are unchanged. During the periods of flux, strategies change but not in a very clear direction. The strategic moves include: product launch, service addition, acquisition, divestment, domestic expansion, overseas expansion etc.
2. Intended and realized strategies
It is viewed that, strategy is developed by managers in an intended, planned fashion. It is also viewed that strategy is formulated in terms of resource allocation, structure etc. The strategy then comes about or is realized in actually. Thus, the strategy is conceived of as a deliberate, systematic process.
3. Emergent, Opportunistic and Imposed Strategies
Strategies always may not be formulated based in plans and intentions. The strategy which is formulated based n the organizational direction, and is developed over the time is called emergent strategy. The strategy which is formulated to utilize the opportunities offered by the environment and to utilize the strengths of the organization is called opportunistic strategy. The strategy which is formulated due to the environmental threats and the weaknesses of the organization is called imposed strategy. The strategies like divestment, retrenchment, cost cut are the examples of imposed strategy.
Different Views of Strategic Development:
The different views of strategic development include:
- the natural selection view of strategic development,
- the planning view of strategic development,
- the logical incremental view of strategic development,
- the cultural view of strategic development,
- the political view of strategic development and,
- the visionary view of strategic development.
The Natural Selection View of Strategic development:
The natural selection view of strategic development states that the organizations cannot influence the environment and they respond to the change in the environment. Strategies developed under such circumstances are similar to national selection. Changes in organization structure, organization process and systems would also take place in response to the environmental variations. Manager’s strategic choice in such organizations, is limited.
The Planning View of Strategic development:
The strategic decision making is viewed as a systematic planning process. This planning process comprises of (a) setting of objectives, goals, procedures, programmes and tactics, (b) analyzing internal environmental factors in order to know the strengths and weaknesses of the organization, (c) analyzing the external environment to know the organizational opportunities and threats, (d) formulating all possible strategic alternatives (e) evaluating these alternatives (f) selecting the alternative which suits the best to the organization’s strengths and weaknesses and environment’s opportunities and threats, planning and implementing the best solution.
Limitations of planning view of strategic development:
This view suffers from the following limitations
- This view does not take into consideration the behavioral aspects of the people who make the strategies and implement them.
- Strategies are formulated and implemented by the corporate planning staff of the company. Therefore, the middle level and lower level managers are not involved in the process.
- The employees, contribute only to a part of the strategic plan and they do not understand the total process.
- The strategy, in this view is thought as a plan.
The Logical Incremental View of Strategic development:
Lindbloom views that strategic choice against present and future objectives would be difficult. He suggests that selecting the best strategy among the alternatives would be possible by comparing the alternatives with one another. He viewed this strategy building through ‘successive limited comparisons’. Quinn labelled the same situation as ‘logical incrementalism.” Quinn meant that managers try to formulate effective strategies in an evolutionary process. He also suggests that different decisions should not be seen as entirely separate. Since the different parts or sub-systems of the organization interplay with each other, every manager should know the activities of the other managers. It helps them to learn from each other and to evaluate the strategies from multi-directions.
The Cultural View of Strategic development:
Though the environment influences all the organizations similarly, they respond to the environment differently. This is due to the fact that cultures of the organizations vary from one another significantly. Organizational culture is concerned with the basic assumptions and beliefs that are shared by the members of the organization. The organizational culture often plays an important role in the strategy development.
The Political View of Strategic development:
Organizations are not only economic and social entities, but also political entities. These are powerful internal and external interest groups which influence the resource allocation, strategic decisions etc. Strategies also emerge through a process of bargaining, negotiations and the trading off of political interests.
The Visionary View of Strategic development:
Visionary view of strategic development is concerned with the intuitive capacities of the executive who make strategic decisions. These executives relate more naturally to the identification of new possibilities, new patterns and ideas rather than in-depth search for cause and effect and the system or science of management. They see the new ways of management and working. These managers have more capacities to envisage rather than plan the future of the organization. These managers make the strategies based on their intuition and their patterns and ideas.