Patterns in Strategy Formation by Mintzberg

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<ul><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 1/27</p><p>GSM 6190</p><p>Theory in Management</p><p>Title : Patterns in Strategy Formation</p><p>Authors : Henry Mintzberg</p><p> Presented By: Megat Sharifudin b. ul!i"i #GM0$9%&amp;'</p><p> Mohamad (a)i* b. +a,i Abdul Mubin #GM0$9%6'</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 2/27</p><p>Objectives</p><p>To examine how strategy maker formulate and</p><p>operationalized the concept of strategy:</p><p>Through a conscious processstrategy may unintentionally formed through series</p><p>of decisions</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 3/27</p><p>1. Introduction</p><p>How organizations make and interrelate decisios?</p><p>3 theoretical groupings/ modes</p><p>1.!he planning mode " depicts the process as a highly ordered, neatly</p><p>integrated one, with strategies explicated on schedule by a purposefulorganization</p><p>#.$daptive mode% depicts the process as one in which many decision-</p><p>makers with conflicting goals bargain among themselves to produce a</p><p>stream of incremental, disjointed decisions</p><p>3.&amp;ntrepreneurial mode " a powerful leader takes bold, risky decisions</p><p>toward his vision of the organization's future</p><p>'ut most literature remains theoretical without being empirical.</p><p>!he contradictions among the three modes remains to be</p><p>investigated.</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 4/27</p><p>-enition o* Strategya deliberate conscious set of guidelines that determines</p><p>decisions into the futuremanagement theory: . . . the determination of the basiclong-term goals and objecties of an enter!rise" and theado!tion of courses of action and the allocation ofresources necessary for carrying out these goals$%handler&amp;</p><p>'ll these de(nitions treat strategy as$a&amp;)*!licit$b&amp;deelo!ed consciously and !ur!osefully</p><p>$c&amp;made in adance of the s!eci(c decisions to +hich ita!!lies.,n common terminology" a strategy is a !lan.</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 5/27</p><p>titis:</p><p>he de(nitions !resented are incom!lete for theorganization and nono!erational for the researcher.</p><p>/y restricting strategy to e*!licit" a !riori guidelines" itforces the researcher to study strategy formation as a!erce!tual !henomenon'll too often reducing his conclusions to abstractnormatie generalizationsMintzberg" in this !a!er" referred the aboe de(nition asintended strategy. Strategy in general" and realizedstrategy in !articular" +ill be de(ned as apattern in a</p><p>stream of decisions.+hen a se0uence of decisions in some area e*hibits aconsistency oer time" a strategy +ill be considered tohae formed.</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 6/27</p><p>Mintzbergs a!!roach enables us to consider both sides of</p><p>the strategy formation coin:</p><p>strategies as intended" a !riori guidelines as +ell asstrategies as eoled" a !osteriori 1 argumentconsistencies in decisional behaior.</p><p>he strategy ma2er may formulate a strategy through aconscious !rocess before he ma2es s!eci(c decisions" or</p><p>' strategy may form gradually" !erha!s unintentionally"as he ma2es his decisions one by onea</p><p>aaa</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 7/27</p><p>The (esearh Methodology3ecessitate the study of decision streams inorganizations oer time !eriods long enough todetect the deelo!ment and brea2do+n of !atterns</p><p>%om!le*" e*!loratory and inductie in nature</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 8/27</p><p>Step 4: Collection of basic datato uncoer +hateer traces +ere left of decisions andeents that had ta2en !lace as many as (fty yearsStep 2: Inference of strategies and periods of changeFrom the chronology of decisions" diided into distinct</p><p>strategic areas"arious strategies +ere inferred as !atterns in streams ofdecisionsthen com!ared +ith each other" as +ell as +ith other data</p><p>such as sales" budgets" and sta5 leels" in order toidentify distinct !eriods of change in the formation ofstrategy</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 9/27</p><p>Periods o* hange 2ere:Incremental: during +hich ne+ strategies formedgradually6Piecemeal: during +hich some strategies changed +hileothers remained constant6Global: during +hich many strategies changed 0uic2lyand in unison.</p><p>Continuity:during +hich established !atterns remainunchanged63eriods o* limbo: during +hich the organizationhesitated to ma2e decisions63eriods o* fux: during +hich no im!ortant !atterns</p><p>seemed eident in the decision streams</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 10/27</p><p>Step 7: Intensive analysis of periods of change</p><p>shifted from the broad !erce!tion of oerall !atterns tothe intensie inestigation of s!eci(c !eriods of change.</p><p>relied on in-de!th re!orts and" +here !ossible" interie+s</p><p>+ith the original strategy-ma2ers</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 11/27</p><p>Step 4: Theoretical analysis</p><p>' re!ort +as +ritten and a grou! then met in a series ofbrainstorming sessions to generate hy!otheses to e*!lain</p><p>the (ndings.)*!lain 8o+ of ideas:4hen is a strategy made e53liitly that ontrols subseuent deisions2hen does a strategy e7ol7e im3hitly as a on7ergene in a stream o* ad</p><p>ho deisions84hen do intended strategies difer *rom reali)ed ones84hat is the role o* 3lanning leadershi3 shared goals and bargaining inintegrating diferent strategies8 nder 2hat onditions are *ormal analysisand 3lanning used82hat does the term ;3lanning; mean in the onte5t o* strategy *ormation84hat are the relati7e in"uenes o* e5ternal *ores organi)ational *ores</p><p>and leadershi3 in strategy *ormation84hen and 2hy are organi)ations 3roati7e and reati7e8+o2 do organi)ations balane hange 2ith stability84hat o7erall 3atterns does the 3roess o* strategy *ormation *ollo28</p><p>hese 0uestions stimulated debate and discussion" +hich in turn led to thegeneration of hy!otheses. hese in turn are on their +ay to being +oen into</p><p>theories</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 12/27</p><p>ase 1: The Strategies o* ?</p><p>Seen distinct !eriods:efore 49;: !u"#$4% : global change &amp; em!hasis on 0uality and technical</p><p>e*cellence" aggressie e*!orting" and rigorous sericestandards" all integrated around the dominant element ofthe !eo!leermany as +ell as to +orld-+ide e*!ortmar2ets49=9: minor change'dertising +as introduced" modi(cation in design"</p><p>economy" durability </p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 13/27</p><p>49?@ to 49?: continuityut pro'ts (ere lo( due to competitive pressure and</p><p>increase in cost49?= to 49A@: gropingBeacted in the form of an an*ious and disjointed search</p><p>for ne+ models. Many +ere introduced in this !eriod49A4 to 49A: global change</p><p>%onsolidation3e+ integrated turnaround strategyStylish ne+ modelBeliable and economic assembly/uild !lant abroad $lo+ cost&amp;Mar2eting strategy C !erformance" reliability" serice49A= - !ro(table again</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 14/27</p><p>ase =: .S. Strategy in $</p><p>49=@: global changeDirect monetary aid to the French49=@ to 49=7: continuity</p><p>49=: !u") then global change</p><p>French left Eietnam and the .S. began a !rogram ofdirect aid to the South Eietnamese" +ith the intendedstrategy of democratizing the goernment of Diem.</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 15/27</p><p>49== to 49?4: continuity</p><p>direct aid to the South Eietnamese" +hile the intendedstrategy of democratization +as neither realized norigorously !ursued49?4: global change</p><p>change the intended strategy from !assie aid to actiesu!!ortcoert +arfare cam!aign against 3orth Eietnani. 't theend of the year" under !ressure from Diem" Gennedyagreed to a build-u! of su!!ort troo!s</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 16/27</p><p>49? to 49?=: incremental change leading to globalchange,ncrease in number of troo!s 49?4 $9;&amp; to end of 49?$44"@@@&amp;Military %ou! $Diems goernment&amp;%onsiderable confusion bet+een Iashington" themilitary" and the %,' +ith Diems &gt;oernment.</p><p>assassination of GennedyJyndon Kohnson - uncertain ho+ to !roceed and reluctantabout a!!roing large-scale bombings. /ut eents +eredragging him along.Major retaliatory stri2e</p><p>Search and destroy strategy had begun to re!lace theenclae strategy</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 17/27</p><p>49?= - 49?A: continuityThree strategies</p><p>First" the land +ar +as escalated until the .S. troo! leelin Eietnam reached a !ea2 of oer half a million in 49?A</p><p>Second" the bombing cam!aign +as intensi(eds!oradically throughout the !eriod</p><p>hird" Kohnson !ut !ressure on the 3orth Eietnamese"through !eriodic ariations in the bombing cam!aign" to</p><p>come to the negotiating table</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 18/27</p><p>49?;: global change&gt;reat resistance to the +ar e5ort that +as gro+ingamong the .S. !o!ulation</p><p>Partial bombing halt</p><p>Beduction of the latest de!loyment of troo!s</p><p>Kohnson not to see2 re-election</p><p>3orth Eietnam</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 19/27</p><p>49?; to 49?9: limbo) then global changeBichard 3i*on too2 oer - !roactie" integrated strategyLhe referred to its goal as !eace +ith honor</p><p>Eietnamization - the +ithdra+al of .S" troo!s and thee0ui!!ing of the South Eietnamese to ta2e oer the</p><p>(ghting</p><p>'ctie !eace initiaties to negotiate a settlement"alternated +ith military !ressure</p><p>Pressure on the BussiansLby threatening a +ithdra+al ofcoo!eration on other )ast-Iest negotiationsLto in8uencethe 3orth Eietnamese to reach a settlement"</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 20/27</p><p>49A@ to 49A7: continuity*ithdra(al of troops+eriodic bombing and ground e"cursion+olitical pressure on soviet</p><p>#$,- left /ietnamno military and funding for /ietnam</p><p>#$,0 South /ietnam collapsed</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 21/27</p><p>Some General onlusions About Strategy@ormation</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 22/27</p><p>Strategy @ormation as the nter3lay o*Cn7ironment Deadershi3 and Bureauray</p><p>Strategy formation in most organizations can be thoughtof as reoling around the inter!lay of three basic forces:$a&amp;an environment that changes continuously butirregularly" +ith fre0uent discontinuities and +ide s+ingsin its rate of change</p><p>$a&amp;an organizational o!erating system" or bureaucracy)that aboe all see2s to stabilize its actions" des!ite thecharacteristics of the enironment it seres</p><p>$a&amp;a leadership +hose role is to mediate bet+een theset+o forces" to maintain the stability of the organization</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 23/27</p><p>Strategy can then be ie+ed as the set of consistentbehaiors by +hich the organization establishes for atime its !lace in its enironmentstrategic change can be ie+ed as the organization</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 24/27</p><p>a erns o ra eg ange</p><p>Strategy formation oer !eriods of time a!!ears to follo+distinct regularities +hich may !roe ital to understandingthe !rocess</p><p>3o need to d+ell on the !oint that strategy formation is not aregular" nicely se0uenced !rocess running on a standard (e-year schedule or +hateer.</p><p>'n organization may (nd itself in a stable enironment foryears" sometimes for decades" +ith no need to reassess ana!!ro!riate strategy.</p><p>hen" suddenly" the enironment can become so turbulentthat een the ery best !lanning techni0ues are of no usebecause of the im!ossibility of !redicting the 2ind of stabilitythat +ill eentually emerge</p><p>Patterns of strategic change are neer steady" but ratherirregular and ad hoc" +ith a com!le* intermingling or !eriods</p><p>of continuity" change" 8u*" limbo </p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 25/27</p><p>-eliberate 7ersus Cmergent Strategieshe study of the inter!lay bet+een intended and realizedstrategies may lead us to the heart of this com!le*</p><p>organizational !rocess</p><p>hese t+o" at least in theory" can no+ be combined in three+ays:</p><p>$4&amp;,ntended strategies that get realized6 these may be calleddeliberate strategies</p><p>$&amp;,ntended strategies that do not get realized" !erha!sbecause of unrealistic e*!ectations" misjudgments about theenironment" or changes in either during im!lementation6</p><p>these may be called unrealized strategies</p><p>$7&amp;Bealized strategies that +ere neer intended" !erha!sbecause no strategy +as &lt; intended at the outset or !erha!sbecause" as in $&amp;" those that +ere got dis!laced along the</p><p>+ay6 these may be called emergent strategies.</p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 26/27 </p></li><li><p>8/10/2019 Patterns in Strategy Formation by Mintzberg</p><p> 27/27</p><p>onlusion' strategy is not a (*ed !lan" nor does it changesystematically at !re-arranged times solely at the +ill of</p><p>management.</p><p>he dichotomy bet+een strategy formulation and strategyim!lementation is a false one under certain commonconditions" because it ignores the learning that must often</p><p>follo+ the conce!tion of an intended strategy.</p><p>he +ord formation is misleading since +e commonly referto as strategies many !atterns in organizational decisionsthat form +ithout conscious or deliberate thought</p><p>here is !erha!s no !rocess in organizations that is moredemanding of human cognition than strategy formation. )erystrategy-ma2er faces an im!ossible oerload of information.'s a result +e can hae no o!timal !rocess to follo+</p><p>-x-</p></li></ul>

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