Evaluating Mintzberg’s 10 schools of thoughts for strategy formulation | The Financial Express

Evaluating Mintzberg’s 10 schools of thoughts for strategy formulation

Mintzberg is a globally-acclaimed academician and author on business and management. The model describes each school in strategic perspective and provides a critical viewpoint; it acts as a good overview for strategic management.

Evaluating Mintzberg’s 10 schools of thoughts for strategy formulation

By Vidya Hattangadi

A school of thought refers to a doctrine, a feeling, an intellectual tradition collectively drawn by a group of people who share common opinion or outlook of a philosophy/discipline/belief or social movement. In strategic management, the Ten Schools of Thought model by Henry Mintzberg is a framework that explains approaches of defining a strategy; it can be in the form of a design, a plan, positioning, consumerist, cognitive (subjective); it can be learning; it can be power-centric; it can be culture-centric; it can be environment-centric; or it can also be configured (formative).

Mintzberg is a globally-acclaimed academician and author on business and management. The model describes each school in strategic perspective and provides a critical viewpoint; it acts as a good overview for strategic management.

1. The Design School: It’s responsible for development of the Strengths, Weaknesses, Opportunities and Threats (SWOT) model. Strengths and weaknesses of a company are mapped, along with opportunities and threats. The strategy is a fit between internal capabilities and external potentials. The CEO is a strategist who develops strategy and controls execution.

A critical view of Design School: Design thinking is a process that uses creative approaches from designers’ toolkits to solve problems. While it thrives on diverse participants, there are a multitude of factors that affect the process. These include personal behaviour and emotions, how information is searched for and processed, and how design variables are considered. Not much research is gone into it.

2. The Planning School: It has its theoretical roots in system theory and cybernetics. The process runs towards planning the entire strategy in a rigorous manner so that the firm gallops ahead.

A critical view of Planning School: Criticality arises when something happens out of plan—when plans are made years in advance and changes take place either in the industry or in organisation, the process goes for a toss. Proper prediction is essential when using this school of thought.

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3. The Positioning School: Its central focus is the industrial-economic angle, with the work of Michael Porter being particularly important. Competition and a competitive position are analysed on the basis of economic concepts; companies must choose one out of the three generic strategies: cost-leadership, differentiation or focus (niche market). This school is strongly influenced by economics.

A critical view of Positioning School: Here the strategy assumes the market will remain as it is; it does not take into consideration new entrants and their energy.

4. The Entrepreneurial School: In it, the environment can be influenced and manipulated. Entrepreneurs are capable of bringing innovative products and services to the market, developed on the basis of characteristic dynamics, quite detached from the existing ‘laws’ of the market.

A critical view of Entrepreneurial School: The problem with this school is one question: Where to find a mature, experienced, talented and honest leader? If an organisation designs its strategies based on recommendations by the leader, he/she has to be a visionary and who takes responsibilities of success and failure of strategies.

5. The Cognitive School: The ‘cognitive’ has psychology as its root discipline. It considers the environment to be demanding and/or difficult to comprehend. In it, the organisation depends a lot on ‘mental maps’ for making strategies. In particular, strategy is not so much planned, but rather incremental and ‘emerging’.

A critical view of Cognitive School: The cognitive model is not practical beyond a point. A firm cannot rely solely on surveys and research reports to find new ideas or to make connections with their customers.

6. The Learning School: Psychology is at the root. The human mind is complex and unpredictable. The nature of business environment, coupled with a decentralised distribution of knowledge, makes distribution of information complex. It has been observed that organisations which follow the learning school model make strategies looking at the past.

A critical view of Learning School: More than a strategy, this school looks like steering or guiding the company on the basis of previous roadmaps. It is not advisable to depend on decisions of the past because change is constant in the market.

7. The Power School: People in power call the shots. The power centres can be customers, suppliers, workers’ unions or leaders. The power school is very political at times; the cartel that is powerful negotiates, forms alliances and works for it.

A critical view of Power School: The trouble occurs when powerful people stop listening and do not take feedback for implementing improvement measures.

8. The Cultural School: A positive culture harnesses innovations and entrepreneurial culture. In this school, strategy formation becomes subject to a company’s unique values and subjective perspectives and styles of decision-making. Strategy formation is a process of social interaction is based on the beliefs and understandings shared by members of an organisation. It’s most useful during M&As.

A critical view of Cultural School: During changes taking place in a firm, people resist it because they get used to an archetypal culture. Moreover, when a strong culture is built, direction becomes hazy.

9. The Environmental School: It’s situational, and gives importance to the environment; for example, in the IT industry, technology needs upgrades and is ever-changing. So, situational analysis is the most used tool in this school.

A critical view of Environmental School: Firms need to be agile; processes depend on the environment, which constantly changes. It is difficult for organisations to keep changing their strategies constantly.

10. The Configuration School: It’s one of the most preferred because its basic premise is that the strategy needs to be configured; it needs to be well-planned, well-delivered and well-configured.

A critical view of Configuration School: The organisation’s stable business needs to be disrupted, and the organisation has to be configured so that it reaches the successes it aims at.

The author is a management thinker and blogger

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First published on: 17-06-2019 at 02:13 IST