Strategy Formulation Essay
Strategy formulation is chief to the success of any market and organizational effort. Without a clear vision of the economic horizon and a detailed blueprint of which to go about the plans of reaching its concomitant objectives, attempts at building a strong foundation for effective management is likely to come to naught. Therefore, a competitive know-how over a variety of theories on strategic planning helps the strategist gain a full scope of available options refined for him by the experiences and analyses of his peers. Being able to commit such expertise and discourses to his memory, in order that he may tailor discrete methods that shall attend to his personal means and ends, subscribing either to the orthodox and radical, is already a decided advantage. Likewise, these theoretical approaches give the strategist a semblance of control and mastery over extant economic variables.
Yet there is danger on being too fixated on these ready-made assumptions by relying heavily on such cut-and-dried nostrums of strategy-making. While it is practical to look into the classical, evolutionary, and processual theories on market and management, to accept these as the only gospel truths about economic reality is to brush aside other important factors that influence the
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Theory is never always an exact reflection of reality. More often than not, to think of theory as a panacea to every modern economic issue and problem is like trying to fit circles on a square peg. Any mechanical application of them, just as they were applied in previous decades, without modifications to account for changes in the present, will certainly fail in the process. Whittington, quoting Argyris on this point, writes “until we [rediscover] and surface our implicit ‘theories of action’, we cannot test their accuracy and amend them to the conditions of the day […] those who do not actively confront their underlying assumptions are condemned to be ‘prisoners of their own theories’ (Whittington qts. Argyris (1977) 119).
Indeed, the world is no longer what it was once before. The rules and traditions applicable in the past have changed dramatically in the last few years. Although there is some wisdom we can learn from in our predecessor’s experiences, it is important to fashion new ideas of strategy and theoretical approaches that befit the modern times. There is an imminent and pressing need to have a shift in paradigm.
At the turn of the 20th century, people have risen to the top purely on brute managerial skills and hard-work (Whittington 42). In a minimal set standards for innovation, leadership and flexibility for change, these very professional managers gained control over major multinational corporations during their time by following strict, and rather narrow, methods. Such methods are efficient to a militaristic degree. In this case, there are hierarchies, a distinct and linear chain-of-command from top to bottom, along with confident assumptions of obedience among the lower ranks, and expectations that orders will be carried out to the dot. It is not surprising that this classical approach to strategy has proliferated generally among corporations and is still being regarded as major literature for strategists. In swift and bold strokes, the strategic approach ensures mechanical efficiency, speed and practical coordinated results from among at least half a million employees and managers in one huge corporate battalion.
On top of this great machinery, is the metaphorical general who oversees the entire theater of operations, so to speak (Whittington 15). He is responsible for presiding over the group. His decisions spell the success or the failure of the enterprise. Also known as the cold and objective executive, he is in charge of formulating “the basic, long-term goals and objectives of an enterprise, [also] the adoption of courses of action and the allocation of resources necessary for those goals (Whittington qts. Chandler (1962) 13). The executive general therefore has the sole duty of creating supposedly well-informed strategies for everyone to follow. The moment that the orders are transmitted down each tier to the very bottom, it is automatically assumed that these directives are perfectly rational and thus are not open to any compromise nor are to be questioned. Theoretically speaking, if there are breaks in the chain-of-command due to insubordination in the levels of rank and file victory is forfeited to the disadvantage of everyone else. The operative word here is ultimate victory; victory to mean complete profit maximization.
In recent years, slight modifications to the classical notion of strategy were made. Since the rational executives can no longer handle the growing corporate empire, sub-divisions were created to amplify the main objectives of turning in maximum profit so that the message still resound loud and clear right down at the very bottom tier. In a relay of information and ideas, these sub-division leaders mimic orders from the top and perfunctorily apply the same set of commands with a few alterations. No major departures from the established doctrines are risked. Regardless of the different and unique conditions present in a given sub-sphere, the standard values from the origins are being perfunctorily transplanted here and there. As if it were likely pragmatic to force each individual to conform to the company’s values even with the unusually incompatible cultural, political and cultural mindset of every sphere. The imagery of the colonizer and the colonized comes into picture. Market and economic cultures of the dominant hegemony, of the paying bosses, are indiscriminately replicated across dissimilar conditions. There is a lack of regard for distinctions among each class. In extreme cases, the individual replaces his own identity for that of his superiors. He, the colonized, assumes the role of a cog in a well-oiled machine. He may very well be significant yet only to a very small degree. Indeed, as Frantz Fanon, in ‘From the Wretched of the Earth’, correctly puts “the colonial situation calls a halt to national culture in almost every field” (Fanon 1).
Shrivastava comments that the “whole discipline of orthodox strategic management constitutes a self-servingly conservative political ideology” (Whittington qts. Shrivastava (1986) 31). The strict and jarring ‘normative emphasis’ of the classical strategist on the hierarchical nature of management and profit maximization as its ultimate, singular goal only “serves to reproduce the conditions of hierarchically organized capitalist society in general” (ibid.). In other words such methods are not as objective, neutral and scientific as it purports itself to be. Rather it is nothing “but an ideology that serves to normalize the existing structure of one [American society] and universalize the goals of the dominant elite” (32). This in effect, leaves their inferiors to continually give assent to something which is not his own, to practice an exercise alien to his upbringing and to become, in the end, slave to his superiors’ demands.
A large number of management books appear to rehash the principle of the colonizer and the colonized in the rubric of business management. Chart after chart, table after table, hierarchies are drawn to military-like perfection. They are designed in such a way that it eliminates excesses in the system and fill up holes and address shortcomings wherever they may arise. The only real question is in which of these boxes individuals belong. More of often than not, the skeletal framework offers no distinct labels for diversity. Organizational charts eschew the discourse of difference. What is being done instead is a sort of replication of the original copy, pro forma, and everyone else is left to their own designs on how to best follow it. Certainly, if this has worked for strategists throughout the decades of the 20th century there is no reason why it won’t work for the rest.
Whittington answers the rhetoric in the negative. In the nascent world of internationalization and globalization there is a demand to recognize culture-specific issues. To ignore the need to differentiate between one and the other is to lose the corporate race. Although the classical and orthodox methods remain invaluable, it must be understood that over-stretching these ideas far a-field the provinces of its original source and plying them across dissimilar situations, without due regard for cultural and social contexts, is really not a good idea. Whittington argues that strategy must be culturally peculiar. Looking into the particular conditions of North America during the post-war period, he writes that “the classical conception of strategy does not always fit comfortably in other cultures” (Whittington 30).
The strategy-making that involves a deeper look into distinct individual units is crucial. On this regard, the systemic theory to strategy seeks to address the limitations of the classical approach. Where the latter is much too steeped into the methods of organization and management thereby losing some other essential factors, systemic theory adds on to it by including a well-informed and more culturally responsible strategic approach. Cultural context is as important as the proposed order over and around the marketing strategy. Grass roots human affairs along with the kind of people in the structure largely influence how corporations fair.
As such, before even the strategist begins to apply his objective and rational management approach, he must first look carefully into whether or not it deserves a long-term welcome among the subjects. There are no precise means in which to go about this. Neither are there any textbook shortcuts available as aid to easily surmount the challenges. It requires a serious overhaul of old attitudes towards Western tutelage and colonization over countries quite unlike the west. None of these must fall under the guise of the so-called ‘white man’s burden’ for surely civilizations may be superior over some in terms of tangible show of strength and economic power, but the measure of nationalism and cultural spirit go beyond any such measurements.
It is said that classical marketing strategies and their proponents must look far into the future. The classical strategist designs a long-term plan that would stretch on to the future; plans that are filled with expectations for a lucrative return in his investments insofar as the plan is still workable. It is ideal to the extent that it serves his interests well. There are strong words for leadership, an open invitation for innovation and promises for flexibility and change. However, these plans almost always fail to live up to its noble intentions.
Amiri Baraka, a known poet and critic of America and the American dream that never was, did not mince words in his attack against the disease that has no long gripped the poor countries of the world. In one of his most recent works, ‘Who Blew up America?” where he was censured for speaking his mind, he traces some of the reasons why America had it coming (Baraka). Baraka writes that America has milked the world dry to the point of a certain cultural emasculation of third-world countries. Over the last century up to the present, the countries over which it has established economic and patrimonial control, mainly through the late expansionist economic regime, have been driven up to the wall to the point of seeing the world only through an American capitalist’s eyes. The culture of money and profit, of extreme libertarianism and of individualism has been forced into nations espousing different, sometimes opposite values. While it is true that the kind of culture that America wishes to introduce to the rest of the world are profitable monetary undertakings, this kind of thinking limits the strategists merely to acquire a hefty sum of money.
The example on the pay-day lending institutions and similarly fashioned business schemes discussed in class are illuminating. The idea of clinching high-profit at ridiculous high-speed rates is at once imaginative and innovative as it is instructive on how the radical libertarian’s mind works. Money becomes the legitimate justification for the pernicious species of marketing strategy. People are led to believe that exploiting other people is okay so long as the transactions bear the semblance of choice and self-determination. Yet is obvious that for a poor person whose choices are fixed only between momentary money remedy and imminent bankruptcy is no choice at all. Since when did money lending schemes fixed at usurious interest rates helpful to a desperate person, who has no chance of paying off his debts? On precisely this point, Lenin resented the interest driven bourgeois for capitalist state leading to ideas of autocracy which “guarantees the bourgeoisie opportunities to employ the crudest forms of exploitation” (Lenin 8)
In this case, human relations or the lack of it govern the theories of the classical as well as the evolutionary approaches to strategy. We are shown just how much people are reduced to objective units and nothing more. Each one becomes an exact copy of the other. No distinctions are made at all. Again, most management textbooks are just as cold and rational. There is little doubt that the radical reader would find nothing wrong with the pay-day lending schemes. The idea is mathematically sound and besides, it is money well-invested after all. A hypothetical survey done in a room of a hundred persons would probably yield that a substantial percent find the idea surprisingly creative and novel. Whichever opinion is more right, the classical strategist would not bother anyway.
At any rate, classical managerial strategy has limitations. In the world we have now, these limitations are more obviously felt. The rationality and certainty over market systems in discrete cultural systems are nothing more than just a talismanic attachment to the antiquated militaristic strategies of long past—in an old world of conquest and colonization. While the classical strategist may have some other tricks up his sleeve, to insist on producing grand results despite of the inherent limitations in the theory is to repeat an action over and over and expecting different outcomes. Yet, on the other hand, thanks to evolutionary approach to strategy, the certainty and confidence found in classical approaches are substituted for a cautious and frugal paradigm.
Let the market decide the best managerial strategy. Let leadership, innovation and change emerge from random set of events. If the circumstances are favorable, a perfectly workable strategy will sooner or later rise from the heap of random variables (Whittington 134). However, the processual strategist is not so keen about the idea of waiting and seeing for things to happen. The processual strategist demand concrete actions. If problems and critical issues occur during the managerial operations, the leader has something to gain from it through experience (Whittington 77). Likewise, in the imperfect and unpredictable world of management, complications in the operation are part and parcel of the job. In any case, what does not kill the business or the executive can only make either or both better in the process (Whittington 78).
Classical, evolutionary and processual approaches to strategy are reflections of the manager’s perception of the world. His choice is invariably linked to the way he sees business and what ends he wishes to accomplish. For instance, a classical strategist demand predictable results and thus makes equally predictable choices and policies in management. He leads the frontlines to ensure that maximum compliance among his sub-class. Evolutionary strategists are suspicious of stability and establishments in the market. For them, it won’t be soon before a better idea comes along to supplant the old ones. The evolutionary strategist never relies on textbook suggestions. For him, there are constant innovations to the market at every turn.
If there were reliable sources for good strategic advice, one would be best to feel the pulse of the market at its very core. Usually the evolutionist finds comfort in scientific advancements. Because science, by its very nature, is ever-changing and markets are just as random, the strategist invest much of their study into understanding the process of revolutionary thought and innovation in order that he may tailor his schemes in the same mould. Processual strategists understand human fallibility and eschew any form of established procedures. Every strategist starts with a blank slate. Gradually it is filled with information based on his very travails. His ideas change as fast as the situation around him does. Management books are invaluable only to the extent that they contain notes of previous strategists. It serves to instruct the processualist of the market’s history. From that point, he is on his own.
There is a fourth kind of approach to market and managerial strategy. Systemic approach to management capitalizes on the tenets of the classical approach as well as a few hints of the evolutionary and processual strategies. Systemic strategies are founded on a strong and flexible kind of leadership: one that does not only begin and end at the very top, but rather, leadership that extends down to different tiers of management with equal performance and adaptability to its peculiar demands. Also, the strategy encourages innovation but only to the extent of product survivability amidst revolutionary trends in the system. Lastly, it is fully aware of the possibility of changes, diversification and growth.
Whittington leans more towards this admixture of classic, evolutionary and processual vis-à-vis leadership, innovation and change not only because of the built in advantage of having the best of the three and their complementary qualities, but primarily because these strategies under the lens of the systemic approach helps the manager plan for bigger projects and solve more complex problems and issues. These issues come in the form of national development and cultivation of discrete cultures.
For the longest time, lessons in management books, the orthodoxy and the trends of economic politics have dominated the way the strategist sees himself and the place of his managerial skills. The view is limited only to personal ends and the purported long-term goals are merely aims that span a meager lifetime—usually that of the executive. Nothing resonates except for the desire to test principles and count the dividends afterwards. Strategy used this way is selfish. The theories only matter when there are questions of how to earn more and plan efficiently. However, Whittington dispels the pervasive myth of the indifferent and cold strategist and his wide array of theories in terms of global involvement and nation building (Whittington 142).
Whittington reaches this conclusion by tracing the inter-locking nature of personal business strategy and national economic strategies. One can not work effectively without taking into account the demands and problems of the other (Whittington 143). National policies that ignore small economic units will result to arbitrary and invidious regulations against corporations. Similarly, any business strategy that run counter to such national policies and the implied cultural traditions embedded in the system is bound to be rejected in toto.
Certainly, both must co-exist together in a symbiosis for their ultimate long-term advantage. If a management strategist privileged one over the other, he risks a strategic collapse. The best strategy, therefore, is one open to a variety of corporate environments and tailoring one’s paradigm to accommodate their idiosyncrasy. This makes for a more dynamic and catholic [universal] approach to an equally vibrant and diverse global corporate arena.
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