How Complexity Theory can Enhance the Formation and Implementation of Strategy in an Organisation

This essay discusses the nature of complexity theory and how it may enhance the formation and implementation of strategy in an organisation. Authors such as Michael Porter or Sloan have shaped the established conventional (or Classical) approach to understanding strategy and the analyses here consider how complexity theory contrasts and, yet, complements the Classical perspective.

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Comparing the Rational and Political Models of Strategic Decision Making

Noorderhaven (1995) defines strategic decisions as those which concern “the goals of an organisation as well as the means to reach these goals”. These decisions are distinguished from the more routine day-day decisions of an organisation because they are often unprecedented and contribute to an organisation’s success: Strategic decisions require substantially more ‘effort’ than routine decisions.

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Making Sense of Apple’s Strategy

Written in response to the article ‘Apple iThrone’ (Jan 29th 2015) in The Economist. The ‘Four Schools’ of Strategy Whittington (2002) proposed four categories of strategy: Classical, Evolutionary, Processual and Systemic. With roots from the Enlightenment and a ‘Scientific Method’ approach, the Classical school is a systematic top-down approach whereby rational strategy formulation, performed by senior managers, is then later performed to maximise profits. The implementation is closely monitored to ensure objectives are reached and sufficient resources available and utilised. The Classical school depends on the “rational economic man” and assumes that people are all motivated uniformly toward profitability. The approach inherently separates the formulation of strategy (by a small few) from the implementation (by the many) and with the goal of long-term planning, does not consider that strategy can emerge from trial and error nor must adapt to a dynamic environment. Whittington describes the Evolutionary perspective where markets determine, in Darwinian fashion, which companies will survive i.e. continue to maximise profitability. As markets determine the strategies companies must adopt, this downplays the value of managers as strategists to concentrating on efficiency e.g. cost control. Similar to Darwin’s Natural Selection, the perspective relies on a diversity of companies/products from which[…]

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Why business managers should understand strategy.

Chandler (1962) offers a generalised explanation of strategy: “The determination of the basic long-term goal and objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary for those goals.” Jabrowski et al. (2007, pp.7-8) proposes strategy as “situated, socially accomplished activity”. As decision-makers, Managers are charged with the responsibility of implementing an organisation’s aims, its mission or realising its vision (perhaps determined by directors or stakeholders). The aims for an organisation can vary but are usually focussed about being effective, which can be profitability or effective expenditure – both often via attaining competitive advantage. Mintzberg (1985) argues that strategy concerns all aspects of a business and that distinguishing between trivial detail (“tactics”) and important decisions (“strategy”) may only be an artificial product of hindsight. Therefore as any decision could have strategic consequence; it is of primary importance that managers understand strategy – to better inform, even the routine/operational, decision making processes. Mintzberg (1996) proposed 5 Ps to understand strategy, as summarised in the table below: Plan A deliberate course of action, made in advance of actions. Ploy A specific manoeuvre to outwit a competitor Pattern Strategy can be realised from consistency of behaviour (deliberate[…]

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