Strategy making : the approach matters

Abstract

PURPOSE – More than ever, businesses need to get their strategy right. Part of achieving this is the approach to strategy making that is chosen. The purpose of this paper is to describe how strategy making happens on the continuum of deliberate practice versus emerging strategy.

DESIGN/METHODOLOGY/APPROACH – Through in-depth interviews with “strategy informants” (CEO’s) in businesses and questionnaires to respondents (managers) in the same organizations, statistical techniques have helped us draw interesting conclusions about their strategy making approaches, its elements and factors moderating the choice of strategy making approach. Through factor analysis, the construct of strategy making is informed by three concepts namely: “performance consensus”, “ends and means specificity” as well as “ends and means flexibility”.

FINDINGS – “Ends and means specificity” was associated more with the deliberate strategy approach while “ends and means flexibility” was associated more with the emerging strategy approach. “Performance consensus” was neutral and therefore relevant to both approached. Approaches also show differences depending on the following characteristics: “Degree of risk taking preferred”, “comfort with stability and predictability” as well as “primarily autonomous or individual behavior preferred”. Finally, strategy making approach is moderated by “firm size”, “CEO influence” and “environmental uncertainty”.

ORIGINALITY/VALUE – Knowing the appropriate strategy making approach gives managers flexibility. There is no need to choose one approach above the other but rather to be aware of benefits that can be derived from both. The fast changing environment places pressure on the use of emergent strategy, therefore performance consensus is critical contributor to successful use thereof.