Strategy – nature, pathway and characteristics
In Step 1.4, we described strategy as the set of actions through which organisations, by accident or design, develop resources and use them to deliver products or services that users find valuable. The emphasis on ‘accident or design’ is fundamental to understanding the nature of strategy.
The patterns or pathway through which the organisation’s objectives are achieved are:
- Intended strategy
- Emergent strategy
- Enforced/imposed strategy
- Unrealised strategy
- Realised strategy
To explain these pathways, the nature of strategy is like driving across town for a meeting with a colleague in a congested city like London or Washington.
You know your route (intended strategy) but your satnav and other sources of information keep rerouting you based on real-time information of road traffic events.
You may choose to stick with your preferred route on occasion (deliberate strategy); at other times you may have to change course because the road ahead is closed (enforced/imposed strategy).
On another day, you may abandon your meeting altogether because traffic becomes unpassable (unrealised strategy). Even so, your colleague may offer to meet you halfway in a new location (emergent strategy). But if you do eventually get across London, the route used becomes your realised strategy in hindsight.
Some industries like banking, computing, consumer electronics, retail etc., are just as crazy as London or Washington traffic because of the speed of change they generate; hence they are called dynamic industries.
In some other industries like residential construction, dentistry and aspects of healthcare, steel, paper etc., the rate of change is really slow, like residential-area traffic of 30 miles per hour, and that’s why they are called mature industries because things are pretty much settled and change is not the norm.
By and large, in dynamic industries, strategy is actually more accident and less design.
In addition to pathways, we can also observe strategy development through the organisational pyramid at the corporate, business and operational levels.
At the corporate level, senior managers in the C-suite (managers with the ‘chief’ prefix before their job titles) map out strategy for:
- Where the organisation should invest
- What markets the organisation should enter or exit
- How to manage relationships between the organisation’s business units
- How to share resources between the organisation’s business units
A step down from corporate management, business level managers, who are typically heads of department and business units, are responsible for strategising:
- What the organisation sells and the target market
- Resource exploitation within the value chain for competitive advantage
- Data collection and information processing to inform corporate level strategy
At the bottom of the hierarchy, operational level managers are frontline executives, project and line managers tasked with implementing strategy through:
- Hiring and firing
- Assessing performance and providing feedback
- Delegating tasks
- Scheduling work
- Organising teams
To conclude this step, there is a uniqueness to what can be classified as a strategic decision in the organisation or even at the individual level. For the latter, what to eat for lunch or dinner does not really matter for most people (not a strategic decision). However, for athletes and fashion models on a defined diet, lunch or dinner is a strategic decision. Going back to organisations, a truly strategic decision is distinguished by:
- Magnitude: Strategic decisions are big and far-reaching. They pervade the entire organisation or a large part of it and compel interaction between suppliers, customers, competitors, shareholders and other stakeholders.
- Timescale: The implementation, impact and outcomes of strategic decisions are time-consuming and specifically long-term in nature. They transcend several business cycles and traverse short-, mid- and long-term horizons.
- Commitment: Strategic decisions require extensive exploitation of financial, physical, human, intellectual and other resources that cannot be easily replenished or reversed.
Read and discuss this article on 10 products that were invented by accident. What was the inventors’ intended and realised strategy or product?
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