Thursday, September 12, 2013

The Development of Fluidity in Business Strategies

Strategy is a key method of navigating organizations to and through environmental changes. A paper by Tamas Meszaros provides some insight into the development of strategy over the past few decades (2012). He argues that strategy has moved from being something concrete to something more fluid. His arguments make sense in terms of the ability of executives to put forward strategies but then adjust those strategies based upon an ever changing environment. 

If we think of how fluid each decade has become with an advent of technology we may find that strategy is no longer stale and concise but is more of a trajectory toward organizational goals. The paths can change and adjust as new information and new pressures become apparent. As the environment changes so does the need to change the strategies based upon developing factors.  

According to Cummings, et. al. (2009) history has changed the way we view strategy:

-1960’s: Strategy was seen as a thing. Decisions in the present aim the organization toward a future outcome.
- 1990’s: Strategy was seen as a verb. Past practices create patterns that influence the present and future.
-Present: Strategy can be seen as an adjective or adverb. How future characteristics encourage current activities that creates paths to success.

The development of strategic thought is a result of the development of human thought and complexity. What was once seen as rigid is more fluid. Strategy can be seen as a future orientation based upon perception. The method of achieving the fulfillment of that perception rests on particular thoughts and actions that lead to the creation of a reality. It is a movement from perception to reality. 
Planning is a precursor to strategy (Roney, 1976).  Planning should take into account the various resources, cultures, abilities, market trends, and other factors in order to make reasonable predictions of outcomes. Yet these outcomes should have a focus on some achievable objective in the future. Strategy is the market approach that takes into consideration the available resources found in the planning stages. 

There is no definitive must use strategy for obtaining needed outcomes.  Three decades of experience with strategic planning have taught us about the need to loosen up the process of strategy making rather than trying to seal it off by arbitrary formalization.” (Mintzberg, 1994.,p. 114.). Despite strategic fluidity there are some methods such as the Delphi Method, SWOT analysis and other methods that have proven track records. It should be remembered that such systems are ways of formalizing thoughts and are not infallible or apply to all situations equally. 

Others have described the new strategic planning process of simply being more adaptive by nature. “Strategic planning processes have changed substantially over the past two decades in response to the challenges of strategy formulation in turbulent and unpredictable environments. Strategic planning processes have become more decentralized, less staff driven, and more informal... permitting… greater adaptability and responsiveness to external change.” (Grant, R., 2003.p.515). As circumstances change so does the need to ensure that new information is calculated within the strategy.

Strategy is a fluid process that is based upon previous models that have worked well. One should not be so confined to these models as to not see new information as it enters into the situation. Strategy has moved from being a centralized function to taking on a more fluid decentralization. The reason is that the environment has become more fluid and requires new cognitive skills to master.  Strategy starts in the planning process and takes into account desired goals and attempts to match them with current resources and potentially successful paths to achieving those goals. Strategies should be evaluated and changed when the fluid environment deems it necessary. Such strategies should not be so fluid as to create chaos without a goal but should not be so rigid as to maintain an improper course of action.

Cummings, S. & Daellenbach, U. (2009). A guide to the future of strategy? The history of long-range planning, 42.

Grant R. (2003): Strategic planning in a turbulent environment: Evidence from the Oil and Gas Majors, Strategic Management Journal, 24.

Mintzberg, H. (1994). The Rise and Fall of Strategic Planning. Prentice Hall, Englewood Cliffs,N.J.

Meszaros, T. (2012). Traditional and new elements in strategic thinking. International Journal of Management, 14 (1). 

Roney, C. (1976).  The two purposes of business planning. Managerial Planning

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