Work: Strategy and Mintzberg

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Discuss Mintzberg’s take on strategic management, evaluate his contribution and situate his writing within strategy debates.

Introduction

From the 1960’s to the 1980’s strategic management was understood as a company’s long term vision or plan (Cummings 2002).  Mintzberg’s main contribution to the field was to challenge this view.  He outlined the relevance of emergent thinking in contrast to planned or rational strategic management.  He wanted firms to consider emerging opportunities which may exist in a business’ environment (Rumelt 2012).  Another important innovation was to emphasise the importance of the implementation of a strategy.  He also focussed on the relevance of qualitative information in strategic thinking as he argued that numerical data played too much of a role in planning.

The discussion will examine Mintzberg’s work in comparison to rational planning.  It will discuss how strategic thinking, in the oil industry, has become more flexible in response to greater interest in emergent thinking. It will go onto to argue that supermarkets have made use of Mintzberg’s ideas in terms of strategic implementation.

Mintzberg’s Work Compared to Rational Planning

His work provides an alternative viewpoint to earlier writers, such as Chandler, who perceived strategic management as an overall concept described as corporate strategy.  Mintzberg’s work can also be contrasted with Ansoff’s publications.  Ansoff argued that strategy should be undertaken in a planned and then controlled way (McKeown 2012).  Mintzberg’s work provided an alternative to the 1960’s emphasis on formal long-term planning and associated mathematical and scientific methods.  The 1960’s was a period of relative economic stability and so business planners believed that they could make accurate forecasts on the future years ahead (Thompson 1993).  There was an emphasis on long-term forecasts as oil companies have planned for developments over a 25 year period.  Mintzberg was at the forefront of scholars who highlighted the shortcomings with this grand planning approach.  They were concerned that strategy was separated from its implementation (Thompson 1993).  Arguably, an emphasis on formal planning was diverting company’s attention from how a strategy was perceived throughout the rest of the organisation; and whether junior employees were willing to implement the strategy.  This is elaborated upon in more detail, given the supermarket examples later on.

One of Mintzberg’s main contributions was that strategies should be allowed to emerge over time.  Less emphasis should be devoted to scenario planning say over a 25 year period.  He advocated greater flexibility in strategic management with an emphasis on emergent processes (Whittington 2001).  The usefulness of this approach can be seen as oil companies have accommodated emergent thinking into their strategic management.  Shell aims to “consider a range of plausible futures and how these could emerge from the realities of today” (Shell 2013).  Oil companies may want to place less reliance on formal rational planning given turbulence in their competitive environments.  This includes increasing oil prices, increased scarcity of oil and more interest in environmental protection. 

Mintzberg’s ideas became popular as they conformed to the changes in management thought that were occurring in the 1970’s.  His criticism of the rational strategy model conformed to the questioning of rational planning after the oil price shocks of the 1970’s (Whittington 2001).  The notion of emergent processes gained popularity with the increasingly turbulent market environment that made it more difficult to plan over long time periods.   Grand planning can lose its relevance over time.  Mintzberg’s analysis suggested that companies needed to react to changes in the business environment rapidly. This type of thinking places more emphasis on strategy which can be realised (Mintzberg and Waters 1985).  He suggested that a strict adherence to rigid strategic planning could stifle “creative thinking” and discourage firms from exploring opportunities which “may not vividly present themselves” (Taghian et. al. 2012:112). 

Mintzberg and Ansoff Compared

Strategic management has adapted to criticism in response to scholars such as Mintzberg.  Ansoff suggests that Mintzberg’s thinking has contributed to the strategic management literature.  It has helped organisations to “manage their strategic behaviour in unpredictable environments” (Ansoff 1991:450).  However, Ansoff suggested that it was improper for Mintzberg, to continue his criticisms of the planned approach to strategic management as if they were still adhering to their 1960’s principles (Ansoff 1991).  Ansoff argued that there was still a significant role for the formulation of strategy in a grand manner, where executives were uncertain about the future (Ansoff 1991).

The Emergent Model

This section will provide more detail, on Mintzberg’s core idea of emergent strategy; before providing some academic criticism of this model.  He argued that although control was required, strategies needed to be allowed to emerge (Mintzberg 1994). He helped move strategy on from the 1960’s.  He argued that it was not possible for the world to remain still “while a plan is being developed, and then stay on the predicted course while that plan is being implemented” (Mintzberg 1994:110).  He argued that companies would form a strategy through a “stream of actions” which formed a pattern (Eden and Ackermann 1998:21-2).  It would be useful to work with a plan that is loose and that can be easily adapted (Eden and Ackermann 1998).

From Mintzberg’s work, it can be unwise to overplay long-term strategic planning; given that time can be wasted in trying to plan for the future (Whittington 2001).  The business relevance is that conventional strategy can be criticised.  Mission statements, and associated company reports, can be seen as idealistic and impractical.  The traditional approach, such as producing long mission statements can be perceived as a “hindrance to handling uncertainty” (Cummings 2002:227).  The value of Mintzberg’s thinking is that strategy needs to be more creative.  Strategy needs a synthesis of different ideas throughout the organisation rather than detached thinking (Cummings 2002).  Mintzberg’s ideas are useful for where serendipitous ideas need to be captured (Hill and Jones 2009).

It is not obvious that emergent strategy will work better than a formal strategy.  It is not clear that executives will learn from their mistakes and adapt strategy successfully. It is not clear that strategists make better choices, after a decision than before a decision.   De Wit and Meyer (2010:93) suggest that this point “remains unsubstantiated”.  Ansoff makes a range of criticisms of Mintzberg’s work.  He argues against drawing conclusions from the basis of single case studies; arguably, the validity of the “emerging strategy model” remains untested (Cummings 2002:231).  He also appears to criticise descriptions such as the ‘business environment’ when it is unclear “whose environment is being discussed” (Cummings (2002:231).  Finally, Ansoff argues that planners can manage complexity (Cummings 2002:231).  That they have adapted to changes that have occurred since the 1960’s.

Mintzberg’s emergent approach could be unhelpful.  Ansoff suggested that “in turbulent environments, the speed with which changes develop is such that firms which use the ‘emerging strategy formation’ advocated by Mintzberg endanger their own survival” (Ansoff 1991:455).  A company that enters a new market on an emergent basis could be thwarted by more insightful competitors, “who had planned their strategic moves in advance” (Ansoff 1991:455). 

One of the recurrent themes of the strategic management literature of the last twenty years is the request for there to be collaboration between scholars from the different schools of thought.  This is between Ansoff’s, planned school of thought, versus Mintzberg’s emergent view of strategic management.   Arguably, executives need to incorporate the thoughts from both contrasting schools of thought.  They plan their best strategies when they allow for real-world changes or limitations (Whittington 2001).

An advantage of Ansoff’s work, such as his matrix, is that it could offer a prescriptive view of how to make a business decision.  A recent example was the planning of an appropriate strategy, for Tesco, in terms of expansion and international development. Tesco could have adopted a variety of different strategies based on Ansoff’s matrix.  Mintzberg does not offer prescriptive advice of this kind.  Arguably, Tesco should have made a more thorough evaluation of the competition in the United States before entering this market (Piercey 2009).  This would suggest that rational, thought-out decisions can be made before entering a new market.  This tends to contradict Mintzberg’s emphasis on emergent processes.  However, Mintzberg’s emergent approach can be useful for supermarkets as they can “test out relatively small changes” (Thompson 1993:21).  They could expand through an incremental approach of opening a shop, at a time, and then reviewing its performance before opening another shop. 

 Mintzberg:  The Context of his Work

Earlier it was stated that Mintzberg’s views were a reflection of events that were occurring in the 1970’s such as the Oil Price Shocks.  It was a time when more ‘emergent thinking’ was required by business.   For example, in the 1970’s, techniques emerged such as the Boston Consulting Group’s Matrix.  This was a technique that was, perhaps, better able to manage the economic precariousness of the 1970’s (Thompson 1993).  Businesses often had to balance different sub-units within the corporate portfolio with an emphasis on seeking new areas of growth.  By the 1970’s strategy making was “dominated by the active search for new opportunities” (Thompson 1993:69).

Criticism of the Quantitative Approach to Strategy

His criticism of the over-use of quantitative methods may also be a reflection of the historical context.  In particular, the Vietnam War of the 1970’s.  Mintzberg criticised the technological analysis that was deployed during the Vietnam War.  He criticised the inability of military analysts to handle soft data such as ‘the will of the enemy’ (Wheeler and Sillanpaa 1997:118).  His work can be seen as a softer more qualitative approach.   He criticised the corporate use of quantitative data.  He challenged the use of ‘hard data’ to support economic objectives, such as increased profits and growth in market share when social aims, such as employee satisfaction tended to be overlooked (Wheeler and Sillanpaa 1997).

He usefully argued that it was unwise for strategists to remain detached from the business by just examining quantitative data.  Such focussed study could restrict the search for innovation (Mintzberg 1994).  Another criticism of the quantitative approach, in strategy, is the difficulty in managing data.  Numerical information, such as average market share, can be used to summarise performance.  This provides the basis for description, but not for explanation.  Numerical data can reveal that sales were lost but it cannot explain “what drove the buyers away” (Mintzberg et. al. 2008:90).  Therefore it is unwise to use quantitative data on its own.  It may not help long term comprehensive planning in terms of examining customer behaviour on the shop floor of a supermarket (Eden and Ackermann 1998:16).

The ‘Crafting of Strategy’

Mintzberg argued, innovatively, that executives should not spend a great deal of time planning work, rather should they respond to situations “as they arise” (Thompson 1993:369).  Managers should learn by experience and continually make sure that a company’s resources should be matched to “the changing environment” (Thompson 1993:251).  He argued that “managers are craftsman and strategy is their clay” (Mintzberg 1987:66).  Nevertheless, this view has been criticised.  It is not credible to think of a product being made, only at the time, and not beforehand.  This is because a mistake made at the time will be “more expensive and difficult to undo” than a product well thought-out beforehand (De Wit and Meyer 2010:93). 

The Experience of Strategic Planning  

According to Mintzberg the experience with strategic planning suggests that the strategy process should be loosened (Mintzberg 1994).  It is insufficient to have a strategy of what already exists.  There needs to be learning in combination with the vision (Mintzberg 1994).  There is a need for adaptation and learning in the context of say oil companies long-term forecasts. Strategy should be about the broadening of thinking “rather than discovering one right answer” (Mintzberg 1994:108).  Strategy should be a perspective; it should be about examining the inside of the organisation and a way of perceiving the world (Mintzberg et. al.  2008:12). 

These are useful approaches to the understanding of strategic management.  However, Mintzberg has taken the view too far. It was useful to argue for a looser definition of strategy, to incorporate views beyond executive planning.  However, Mintzberg, arguably, overstated the case to suggest that “the view of strategy as planning was wrong” and that “top down planning was the opposite of real strategy” (Cummings 2002:230).  These points overemphasize the criticism of the rational model of strategy.  Mintzberg’s criticism of MBA’s is also overstated. It is right to argue that it is difficult to learn how to conduct strategy from case studies in the classroom (Mintzberg et. al. 2008:31-32). This is because practical experience is needed.  However, the classroom could be substitute for practical experience; if this unavailable. 

Mintzberg’s Contribution to Decision-making

As previously stated, Mintzberg’s main contribution was to consider emergent strategies.  He suggested that “successful people know that when they are stuck, they must experiment.  Thinking may drive doing, but doing just as surely drives thinking (De Wit and Meyer 2010:97).  He argued that it can be useful to engage in action, where the situation is novel and plans need to be worked out as “is the case in a new industry” (De Wit and Meyer 2010:99).  This is a useful argument but it is confined to particular aspects of business; such as new industries.  Perhaps, Mintzberg’s work is less appropriate for industries which have remained largely unchanged, such as agricultural industry, and where traditional planning will suffice.

Porter and Prescriptive Strategic Thinking

Mintzberg helped provide the basis for thinking that strategy does emerge (De Wit and Meyer 2010).  However, such knowledge of emergent thinking is not particularly useful as managers could be seeking prescriptive advice from writers such as Porter.  Executives can find the relatively simple matrices produced by Porter, useful.  They can help the company to find its direction.  “This orientation then leads to the provision of (more) explicit (tactical) plans for organisational action” (Cummings 2002: 226). Porter’s models can be criticised for their simplicity, from scholars such as Mintzberg who would want to consider emerging trends rather than static matrices.  However, the advantage of simplicity is usefulness and a straightforward approach for executives.

Mintzberg’s Work: The Basis for Other Scholarly Work

Mintzberg’s writing helped provide the basis for work such as Hamel and Prahalad’s ‘Competing for the Future’ (1994).  This was because Mintzberg (et. al. 2008:3) argued that strategic management should involve “creating and moulding the future reality”.  Hamel and Prahalad suggest that strategy is about intent and that there is “no time to carry out a formal planning process” (Cummings 2002:227).  This appears to be based on Mintzberg’s view that strategic outcomes can be “evolutionary and unpredictable” (Hamel and Prahalad xiii). 

Another advancement of the literature, from Mintzberg, was that he criticised Levitt’s view of marketing myopia.  He argued that consumer sovereignty reduced strategy’s breadth.  Internal capability in products or production was lost as only the market opportunity mattered.  However, Mintzberg suggested that organisations have to build on “whatever strengths they can exploit” (Mintzberg et. al.  2008: 111). Hamel and Prahalad elaborated upon this view.  Mintzberg’s argument is useful here, that firms need to consider their internal strengths or capabilities.  However, this argument should not be used to overlook the importance of consumer orientation in terms of satisfying consumer needs.

Mintzberg has provided impetus to other viewpoints; that strategy can emerge incrementally as managers throughout the organisation adapt competitive strategies (Thompson 1993:474).  This provides support to a “gradual process of change” which has been discussed as part of the theory of “logical incrementalism” (Thompson 1993:21).  Such thinking is again, a useful enhancement to the rational model of strategic management as articulated by Ansoff in the 1960’s.

The Emphasis on Implementation

Another of Mintzberg’s contributions was to argue the importance of the implementation of strategy.  He made a relevant observation that “real strategists get their hands dirty, digging for ideas” (Mintzberg 1994:111).  This could be achieved through direct discussions between say a supermarket executive and shop floor staff.

Arguably, supermarkets have benefitted from a direct inter-relationship between thinking (strategy) and doing (implementation).   If this connection is lost then the strategy formulators will “lose the benefits of experimenting and learning” (De Wit and Meyer 2010:99).  Successful strategies depend upon good implementation as the supermarket examples below suggest.  Strategists who write well articulated mission statements should not blame implementers.  The formulators of the strategy need to formulate strategies, which are capable of implementation (Mintzberg et. al.  2008:15).

Porter has criticised the belief that “strategy happens further down organisations” (Cummings 2002:232).  But strategists need to exploit the ideas of the employees in the organisation.  Strategy “should be about capturing what the manager learns from all sources” and then “synthesizing that learning into a vision ... that the business should pursue” (Mintzberg 1994:107).  It is important to empower the workforce so that they can contribute to the development of strategy.

The Importance of Empowerment

Workers need to be empowered.  The Chief Executive should help design the strategy but empower employees to run the business (Mintzberg 1994).  “The real strategising does not come from the top” (Cummings 2002: 230).  Learning has to be undertaken by people at all levels.  The relevance of empowerment can be seen as the  ‘3m’ strategy was influenced by a scientist using adhesive and paper to  generate post it notes without formal plans (Cummings 2002).

For strategies to work there has to be the “respect of everyone there” (Mintzberg et. al. 2008:120). Strategies have to use a “committing (management) style (to) engage people in a journey” (Mintzberg 1994:108).  Arguably, Mintzberg’s ideas have been influential in terms of British supermarkets and the greater empowerment of staff.   Asda aimed to utilise employee’s ideas (Van de Vliet 1995).  Tesco also tried to empower staff; it encouraged staff members to train and “rise up the ladder” (Blackhurst 2004).  British supermarkets have perhaps learnt that ideas emerge without the direct top-down input from executives.  Supermarkets will want to make full use of their employees’ creativity.  For example, Mintzberg claims that a salesperson can accidently discover a new use for a product and turn “it into a new business” (Mintzberg 1994:113). 

A Hybrid view of Strategic Management

The supermarkets have shown that it is possible to use both the rational school of strategic management and also the ideas based on emergence. There is not “one true perspective of strategy that most objectively represents the way things are” (Cummings 2002:233).   Management scholars in the 1970’s needed to convey that an adaptation was needed to the rational school of strategy.  The traditional view needed to incorporate the idea of emergence and the importance of implementation.  A fusion of ideas called 'planned emergence' was required (Grant 2003:515).  Oil companies can use logical planning and change according to market circumstances (Grant 2003).  As stated earlier, Mintzberg’s criticism of the rational school goes too far.   This is because there are areas of strategic management which can be planned in a rational and systematic manner.  Targets for possible acquisition can be assessed systematically before a bid is made (Thompson 1993).  However, the notion of emergence is relevant given the topic of acquisitions.

Acquisitions

Emergent thinking is particularly useful in the new technology environment where firms, such as Google, may want to acquire new entrants who may be launching the next significant innovation.  Companies, such as Google, want to acquire small technology companies so that they can obtain new ideas.  They would want to purchase businesses which could be another Facebook-style company.  The emergent approach appears to offer the opportunity for flexibility in acquisitions.  In contrast, too much ‘grand planning’ may not be nimble enough to exploit emerging opportunities.  Lucrative acquisitions could be missed if executives thought that target companies would not match a deliberate plan.    It is relevant, in the context of Mintzberg’s work, that Google has an experimental approach with quick product launches and problem-solving (Rushton 2013). 

Conclusion

Mintzberg’s main contribution is that rational planning needed to be more adaptable to incorporate changes in circumstances (McKeown 2012).  Strategies need to consider both planned and the emergent strategy (Hill and Jones 2009).  Emergent thinking does not provide a prescription.  However, it is helpful for executives to consider an emerging strategy with an existing plan.  It is possible to combine the strengths of both schools of thought.   An important part of the formal planning process is now about identifying areas of “uncertainty and potential opportunism” (De Wit and Meyer 2010:93).

Mintzberg usefully contributed to the strategic management literature by suggesting that greater involvement is needed from employees.  Managers are “less rational than supposed” if they do not have the views of workers (Cummings 2002:227).  A solution is to make strategy more participative with employees rather than using direct overbearing control. Employees need to be involved more “in two way strategic conversations” (De Wit and Meyer 2010:95).  Good strategy succeeds by persuading employees and ideally needs to inspire workers too (De Wit and Meyer 2010). 

References

Ansoff, H. I. (1991), Critique of Henry Mintzberg’s ‘The Design School: Reconsidering the basic premises ofstrategic management, Strategic Management Journal, Vol. 12, 449-461

Blackhurst, C. (2004), THE MT INTERVIEW: SirTerry Leahy

Cummings, S. (2002), ReCreating Strategy, Sage Publications, London

De Wit B.  and Meyer R. (2010), Strategy Synthesis: Resolving Strategy Paradoxes to create Competitive Advantage, Text and Readings, Third Edition, Thomson Learning, London

Eden, C., and Ackermann F. (1998), Making Strategy: The Journey of Strategic Management, Sage Publications, London

Grant, R. (2003), Strategic Planning in a Turbulent Environment: Evidence from the Oil Majors, Strategic Management Journal, Vol. 24, No. 6 (June, 2003), pp. 491-517

Hamel, G. and Prahalad C.K. (1994), Competing for The Future, Harvard Business School Press, Boston

Hill C. and Jones G. (2009), Strategic Management:  An Integrated Approach, South Western Cengage Learning, Mason, Ohio, United States

Mintzberg, H. (1994), The Rise and Fall of Strategic Planning,  Harvard Business Review, January – February 1994

Mintzberg, H. and Waters J. (1985), Of Strategies, Deliberate and Emergent, Strategic Management Journal, Vol. 6, No. 3, pp. 257-272

Mintzberg, H. (1987), Crafting Strategy, Harvard Business Review, July-August 1987

McKeown, M. (2012), The Strategy Book, FT Publishing, Harlow

Mintzberg, H., Ahlstrand, B. and Lampel J. (2008), Strategy Bites Back, It is a lot more, and less, than you ever imagined, Prentice Hall, Pearson Education, Harlow

Piercey, N. (2009), Market-Led Strategic Change, Fourth Edition, Oxford: Elsevier

Rumelt, R. (2012), Good Strategy Bad Strategy, Profile Books, London

Rushton, K. (2013), A glimpse into the world of Google, Daily Telegraph 

Shell, (2013), Shell Scenarios

Taghian, M. and Shaw, R. (2012), Marketing Planning And Business Performance: An Empirical Study Of Large Australian Organisations, Deakin Business School

Thompson, J. (1993), Strategic Management: Awareness and Change, Second Edition, Chapman and Hall: London

Van de Vliet, A. (1995), UK: ASDA'S Open Plan

Whittington R. (2001), What is Strategy – and does it matter? , Thomson Learning: London

Wheeler D. and Sillanpaa (1997), the Stakeholder Corporation, Pitman Publishing, London 

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