Luffman, Lea, Sanderson & Kenny in Strategic Management – an analytical introduction 3rd edition, Published 1996 Blackwell publishers Ltd P65 In the process of planning a strategy, it is important to appreciate that decisions are not taken in a vacuum, but that any action taken by the business is likely to be met by a reaction from those affected. It is critical, therefore, that the effects of such reactions should be valued before taking decisions. Such an evaluation may lead to the abandonment of the project, to a contingency plan, or to making plans, which minimise the effects of possible reactions”.
Slack, Chambers & Johnston (2001) Operations Management says there are two well-known procedures of operations strategy: > The Hill Methodology – based on the idea of making connections between different levels of strategy making, from corporate objectives through marketing strategy, operations objectives and structural and infrastructural decisions. > The Platts-Gregory Procedure – based on identifying the gaps between what the market requires from an operation and how the operation is performing against market requirements.
There are many different views and definitions on operations strategy, none of these perspectives alone gives the full picture of what operations strategy is, but together they provide some idea of the pressures which go to form the content of operations strategy. One View on strategy is that of Michael Porter (1987) “From Competitive Advantage to Corporate Strategy” Harvard Business Review, July – August & (1996) “What is Strategy” Harvard Business Review, Vol. 74, November – December. He states “Strategy is about positioning, performing different activities or performing similar activities differently from rivals.
It should be distinguished from operational effectiveness, which is about performing similar activities better. Strategy is about gaining competitive advantage, which can then be used to occupy a profitable position in the industry”. Porter argues that competition in business is a war of positioning – the Positioning View (externally focused – the organisation attempts to fit with the environment). Another view on strategy is by John Kay (1993) Foundations of Corporate Success, a British economist who asked why companies in the same industry with similar resources perform so differently.
Kay says, “Strategy offers some of the answer. Strategy is about match between companies’ internal capabilities and its external opportunities and threats”. Kay distinguishes between reproducible and distinctive capabilities (similar to Porters positioning based view). Distinctive capabilities (relationships, reputation and strategic assets) are “those characteristics of a company that cannot be replicated by competitors, or only replicated with great difficulty.
” This is a resource-based view of strategy (RBV) (internally focused strategy based on using internal resources, skills and competencies to take advantage of environmental opportunities). Another theorist with the same view as Kay is Lynch (2002) Corporate Strategy (2nd Ed); “The linking process between the management of the organisation’s internal resources and its external relationships with its customers, suppliers, competitors, and the economic and social environment in which it exists. ”
Johnson & Scholes (2002) Exploring Corporate Strategy also uses a RBV on strategy; “Strategy is exploring the direction and scope of an organisation over the long term; which achieves advantage for the organisation through its configuration of resources within a changing environment, to meet the needs of markets and to fulfill stakeholder expectations. ” A third view on strategy is that of Henry Mintzberg (known as the guru of bottom-up management). Mintzberg, Lampel, Quinn & Ghoshal in The Strategy Process (4th Ed) say, “There is no ‘one best way’ to create strategy, nor is there ‘one best form’ of organisation.
Quite different forms work well in particular contexts. We believe that exploring a full variety systematically will create a deeper and more useful appreciation of the strategy process. ” Mintzberg maintains “formalising a strategy implies a sequence from analysis through procedure to action. Certainly we do think in order to act; but also we sometimes act in order to think. We experiment; those experiments that work converge into patterns that become strategies. ” To Mintzberg, the essence of strategy making is the process of learning as we act. It is this view that I think TD Travel Group best fits in with.
Mintzberg says, “Strategies can form as well as be formulated”. To formulate strategy would involve an internal and external analysis (usually involving a SWOT and PEST analysis). The managers at TD Travel Group have not actively done this, therefore their strategy has formed rather than formulated. The strategy has developed from the actions of the managers and their organisational routines, this is known as Emergent Strategy based on real-life experience rather than theoretical positioning. TD does not have any strategy written in any one place.
The processes they have used to arrive at their total strategy have evolved as internal decisions and external events have created a shared consensus for the MD’s. Another name for this is ‘bottom-up’ management. Peters ; Waterman also expressed doubts about the usefulness of formal planning systems in their book In Search of Excellence and Mintzberg’s Rise and Fall of Strategic Planning presents a direct attack on traditional perspectives of strategic planning suggesting that emergent strategies may be just as successful as the intended strategies that are the output of a formal planning process.
In the article “Crafting Strategy” Harvard Business Review July – August 1987, Mintzberg concludes that managing strategy is “to craft thought and action, control and learning, stability and change. ” He discusses his viewpoint in detail with some great insights and examples: “Like potters at the wheel, organisations must make sense of the past if they hope to manage the future…. thus crafting strategy, like managing craft, requires a natural synthesis of the future, present, and past.
” Amazingly enough this article was published in the same issue of the Harvard Business Review (July-August 1987) as Michael Porter’s ‘From Competitive Advantage to Corporate Strategy’. Both have almost completely opposite views on strategy and both won the McKinsey Award. In Mintzberg’s 5 P’s (Plan, Ploy, Pattern, Position, Perspective), TD would fit in with his definition of pattern the best. “Strategy is a pattern – specifically, a pattern in a stream of actions.
Strategy is consistency in behavior, whether or not intended. The definitions of strategy as plan and pattern can be quite independent of one another: plans may go unrealised, while patterns may appear without preconception. ” A companies mission is crucial in considering strategy. “Missions describe the purpose of the organisations basic functions in society, in terms of the products and services it produces for its clients” a quote from Mintzberg, a leading writer in organisation and behavior.