According to a distinguished
professor of strategic management, H. Igor Ansoff1 (1984)
“Strategic management is a systematic approach to the
increasingly important responsibility of the Top Management
Team. To position and relate the firm to its environment,
in a way, which will assure its continued success and make
it secure from surprises.” Strategy is essentially then
a declaration of intent. It is a clear and concise statement
mapping out the direction in which an organisation or department
intends to develop over a stated period. However, is it really
that simple? Management of any firm is very complex, consisting
of a variety of different tasks, decisions and controls that
change daily due to the elaborate nature of the modern market
place, where competition can be viewed as more of a friend
than a foe.
Up until mid 1990’s, Castle Press was the leading publishing
and media group in the United Kingdom and had been for many
years. The company enjoyed years of internal stability and
its six members of the Top Management Team developed the company
into a consensus-seeking organisation where the two hundred
employees thrived on their professionalism. The employees
within the company also had an excellent working relationship,
where no one ever questioned each others’ authority
or made autocratic decisions, without first consulting the
other members of the group. In other words, was it the culture
of this company that had more influence over the intended
strategy than the intended strategy did over the culture?
And were the intended strategies the realised ones?
The strategy process that Castle initially employed involved
planning over a five-year period. Rational planning usually
consists of setting objectives, environmental analysis based
on trends, allocation of resources and continual evaluation
of all the above to create a strategy that is characteristic
of the organisations needs, goals, aims and objectives. It
is arguable as to whether Castle actually employed a rational
approach, due to the fact that much of the planning was based
on historical views, and often resulted in strong organisational
resistance, in terms of the team’s ability to alter
the organisation activities and realise new strategies. Described
by Ansoff2 (1979) as the process of “Paralysis by Analysis”.
The intended strategy, which was to plan therefore, was not
the strategy that got realised in this respect.
The other problems that Castle did not compensate for in terms
of planning, was that any signs generated by analysis, tend
to decrease in accuracy in relation to the length of the planning
period. This is based on the fact that the more likely problems
are to mature over time, increasing the severity of the issue.
In defence of Castle, the parent holding company did require
that each of the Strategic Business Units produced planning
documents once every two years. Nevertheless, if the final
plan was in fact poor, based on imprecise or even historical
believes and data, no matter how well the plan was executed,
there is no guarantee that it will improve the firm’s
performance.In the past when the environment was less complicated,
long range planning produced no harm, but since the environment
has turned turbulent, firms avoid formal planning and make
their decisions organically on the basis of managerial intuition
and experience. Mintzberg11 (1987, 1994) supports this view,
strongly urging that both intuition and creativity are vital
ingredients, particularly in conditions of less stability.In
the sectors that Castle were entering, they were successively
undergoing the transition to globalisation, requiring the
management to be more proactive and have international vision.
Mintzberg6 (1988) said “that organisations need to
reduce complexity, by reducing long range planning horizons,
in favour of reliance on intuition and experience”.
However these assume that the Top Management Team of any organisation
are objective to the past ways that the organisation operated,
and it is debatable in the case of Castle Press as to whether
or not the team were entirely detached from the historical
methods that were once in place.
In the first few years that strategic planning was around,
the ability of the firm to move into new business areas depended
on its capability to perform successfully, based on its historical
strengths. There is evidence here, however, that historical
views can and very often do, distort the outcome of a plan
within a company. The Model T car for many years, was a success,
the exact same car was built over and over again. However,
over time consumer needs soon began to change and the mass
production of the standard car became the weakness as Ford
was forced to accommodate for these changes.
Normally as markets evolve organisations have to follow suit
else they become susceptible to strategic drift. Over time,
as the environment continued to evolve, Castle’s performance
was effected. Slipping to second place in the market, was
the first sign that the past strengths of the company had
now become their weaknesses and Castle desperately needed
to make dramatic changes to its strategy in order to avoid
what was soon to happen to Marks and Spencer. “We have
been too conservative, too slow to respond to the market,
too conservative in the way we progress careers, too slow
to embrace new technology” explains the Marketing Director
of Castle Press.
There is also evidence that Castle intended to develop these
long-term plans incrementally. This is apparent where they
were attempting to manage the speed of environment change,
once they had realised their change of position within the
market place. However, their strategies tended to be more
concerned with operational issues as opposed to those of strategic
in nature, as it is questionable as to whether the firm was
capable of complex planning that did not involve any kind
of routine or unanimity. This may be due to the fact that
the Finance Director was the only member, essentially, of
the entire organisation, who could provide the most objective
views on the best way to tackle different problems, because
he was less concerned with the way things used to get done.
Especially considering the consensus basis that the business
already operated from and the fact that the employees were
there for many years or were from other companies of a similar
background.
Slagmulder12 however supports the notion of organisation
consensus and believes that when there is a management hierarchy,
it causes a high degree of inertia in an organisation. In
addition, strategic misalignment problems can be related to
the inefficient use of managerial resources, which is contradictory
to the view of strategic stretch, and as a consequence there
is problem of low responsiveness. Therefore when the strategic
decision process is highly centralised and bureaucratic the
good ideas from the lower levels often get killed as they
passed through the complex. Kaplan and Norton10 believe, many
firms when implementing strategy, only provide their employees
with a limited description of what they should do and why
it is important, leading to the conclusion that an organisation
would not be able to carry out a plan if employees did not
fully understand it. Supporting the view of the Top Management
Team, to always provide their employees with the full details
and get their opinions first. Whether or not this was deliberate
however, is very ambiguous, since the nature of Castle is
that of a consensus based authority, thus the strategy of
incrementation being unrealised.
Incremental change is viewed as better than planning, as
changing the strategy within the ideals allows the experience
of those in the organisation to adjust permitting the change
to take place. However, for Castle the outcome of this process
was that the strategies were adapted in line with the experience
enshrined in the organisational culture, environmental conditions
still effected performance, which is how strategic drift became
an issue. The argument here is that environmental change is
very often far from gradual as well as being difficult to
predict. This is in line with the believes of Complex and
Chaos theorists, who argue that because the market is both
complicated and unpredictable it is unlikely that managers
can know all that that there is to know about the environment
that surrounds them. The organisational world appears to be
so turbulent and chaotic that it is not possible to predict
what will happen or when, so traditional approaches to strategic
management such as planning and incrementalism, are just not
appropriate.
Alternatively Cultural and Institutional theorists, believe
that managers are subjected to organisational assumptions
and ways of doing things which results in the eventual strategic
plan being a product of these believes and not the other way
round. Ansoff1 (1984) for instance suggested, that the ability
for a management team to recognise the changes in the environment
and implement change are the result of 5 inter-related elements
of organisation. Firstly the mentality of the Top Management
Team, the culture, power structure, organisational structure,
and finally the capability of general management to do the
work. All above factors contributed to the process of strategy
development at Castle Press.
The foundation of Castles’ organisational philosophy
was its need to seek agreement before adopting any strategy.
This is variation of the command view, where the strategy
develops through the direction of essentially the feelings
of the entire organisation, but it is not a formal event.
However, it is not a result autocracy, as Castles Managing
Director felt that he was not the sole person in charge and
neither should he be, decisions should be about informed opinions
in order to ensure that employees could apply themselves to
their job without reservations.
Therefore, the realised strategies were a repercussion of
the culture within the organisation. The effects of “the
way things always get done” had important implications
for the development of strategy at Castle. The cultural influence
caused major problems in relation to managing change because
the actions required to avoid strategic drift tended to fall
outside the constraints of the cultural web4. This was one
of the major repression’s to the incremental approach
that was intended, as the influence of the cultural web, resulted
in Castle challenging any decision or outcome of the planning,
which also meant that very few of the intended strategies
ever got realised. The Production Director said, “I
think that we should experiment more and when there’s
an opportunity we should take it”
Changes in legislation, and of competitor activities, should
influence the nature of the strategy that is employed by an
organisation. The different ways that foreign governments
control their countries should have also effected the final
strategy in place. But Castle appeared not to have realised
this factor. The political view implies that strategies develop
as a result of the activities among powerful internal or external
interest groups. The head office, the main external interest
group, was responsible for indicating the key issues and objectives
of the organisation, however this was extent to which the
control extended. The main form of control for the organisation,
therefore, was internally generated and was the basis of the
relationship between the individuals, which had built up over
twenty years, meaning the main functioning was on the premise
of these social networks, sustaining the cultural web theory.
The strategy employed needs also to be suited to the type
of organisation according to Mintzberg6 (1988). He explored
how strategy-making and its processes can be seen to work
in various different types of organisations, in which he identifies
their to be five kinds. Castle best fits the description of
an Adhocric firm, which according to Mintzberg is characterised
by management who are reluctant to plan and who only respond
to problems that are urgent by nature. This is arguably a
question of culture once more and is reminiscent of Burns
and Stalkers Organic Organisation5, which focussed on the
organisation and environment relationship. Here two structures
were distinguished, mechanistic which is highly bureaucratic
and secondly organic, a flexible and informal firm, with a
good deal of sharing of responsibility with the lower ranked
staff having considerable influence delegated to them. The
latter best describes Castle, as a firm that has been allowed
to grow naturally, with very few, if any, constraints.
To sum up, Peter Drucker1 argues that the market has reached
a new age of discontinuity, where firms are increasingly confronted
with unexpected changes, especially in the global market place.
We are no longer in the mass marketing era, so internal focus
and introverted perspective has shifted to an extroverted
one, where power struggles in firms are part of corporate
make up. Unable to accommodate new operational tactics Castle
failed to make the necessary internal changes as the drive
towards consensus left little room for power and politics.
The members each knew what they wanted to achieve based on
the guidelines submitted by the parent company to “go
for growth”. Guidelines, which left very little constraints
on how they should achieve this goal, which is perhaps a contributing
factor to why there was no one specific strategy employed
by the organisation.
It can be concluded that strategic management requires both
entrepreneurial behaviour and incremental behaviour. In other
words effective strategic management is developed as a result
of this equilibrium, where changes to strategy and organisation
should be introduced incrementally, corresponding with the
notion of strategic fit. The management team did attempt to
implement new monitoring and review systems, but it can equally
be argued that they spent far too much time planning and very
little time being proactive, following the need once more
for more balance and control.
The intended consequence of pursuing any explorative path
is to make the decision situation less difficult to deal with
once the outcome of the exploration is known. However, sometimes
feelings of uncertainty may be reduced through time without
any conscious action on the part of the top management team,
events may or may not unfold, trends may become more apparent,
or the intentions of other parties may be revealed, supporting
the idea that competitors are essentially friends. However,
when it was realised that the internal configuration of Castle
had to be transformed, Castle were not in a position to undergo
these changes as a consequence of the organisational culture
and routine. They were also unable to take the risks, and
unable to make substantial changes to their strategies, perhaps
because of the number of different strategy processes that
they employed, but certainly due to the lack of balance between
the management team and its right to exercise control over
its employees. In short, to be equally entrepreneurial and
incremental. This may also be an explanation as to why each
of the members of the team had a different view on the actual
strategy that was being employed.
Finally, there is considerable doubt aimed at whether or
not it is even possible to employ just one strategy for the
entire organisation, mainly due to the complexity of organisations
and the markets. Bringing to light the fact that it’s
not the strategy that may determine the success of the organisation,
but how effective the firm is at implementing those strategies.
Which is without doubt a product of the edification within
an organisation, and it’s true, that saying and doing
are two very completely different things.
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