KAMPALA INTERNATIONAL UNIVERSITY

COLLEGE OF ECONOMICS AND MANAGEMENT

NAMES : ABDIRAHMAN ABDINASIR ADAN

REG.NO : 2023-01-13241

COURSE : MBA-FB

YEAR : ONE

SEMESTER : ONE

COURSE UNIT : STRATEGIC MANAGEMENT

LECTURER : Prof. MARTIN OPARAOCHA

SESSION : WEEKEND

QUESTION: Explain the ten schools of thought in strategic decision

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Introduction

Henry Mintzberg outlined ten schools of thought for strategy formulation that companies tend to
follow. Although these strategies aren’t set in place from the beginning, they begin to develop
over time as a pattern of decision making starts to form. The ten schools are design, planning,
positioning, entrepreneurial, cognitive, learning, power, cultural, environmental, and
configuration. Design, planning, and position are known as the formulating thoughts which define
what the problems are. Entrepreneurial, cognitive, learning, power, culture, and environmental are
known as the implementing schools of thought, which focus on how strategies are developed.
Lastly, configuring is on its own, and it takes a little bit from all of the other schools of thought.
Today many managing and consulting firms use a combination of these schools of thought to
form deliberate and emergent strategies.

Henry Mintzberg Ten school of thoughts

According to Henry Mintzberg, a strategy in general is defined as a pattern in a stream of

A school of thought refers to a doctrine, a feeling, an intellectual tradition collectively drawn by

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).

Ten Schools of Thought model by Henry Mintzberg are summarized as follows;

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.

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The main motto behind Mintzberg’s (1995) design school is to “establish fit”, where strategy
making basically seeks to attain a match, or fit, between internal capabilities and external
possibilities. Strategy making in this school of thought is concerned with the assessment of
strengths and weaknesses of the organization in light of the opportunities and threats in its
environment (SWOT). Thus, the central idea of strategy in this approach is to match or fit
companies’ internal factors such as strengths and weaknesses with that of environmental factors
such as opportunities and threats and therefore it has been named as fit approach to strategy.
Other authors who have identified this aspect to strategy formulation in their studies are
discussed below.

Chaffee (1985) in her ‘adaptive’ model explained the fit aspects of strategy. She stated that the
main concern of strategy in her model is to develop a viable match between the opportunities and
risks present in the external environment and the organization’s capabilities and resources for
exploiting those opportunities. In his ‘evolutionary approach’, Whittington (1993) expressed that
successful strategies appear to be those which have adapted themselves to environment and the
role of managers in his approach is to formulate strategy that best fits with the turbulence in the
environment. Thus, he was referring to the fit aspect of strategy.

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.

The ‘planning’ school of thought proposed by Mintzberg (1990) considers strategies resulting
from controlled, conscious and sequential process of formal planning where detail attention is
given to objectives, budgets, programs, and operation plans. Further, the planning school
considers strategy as deliberate and rational process and is very much within the restricted
domain of top management. In the ‘linear’ model, Chaffee (1985) discussed the planning process
where strategy emphasises upon methodical, sequential, and directed action indicating a rational
decision making process and here the role for the top management is predominant. Thus,
Mintzberg’s planning school and Chaffee’s linear model possess similar characteristics.

Richardson (1994) proposed a framework called ‘8Ps plus Environment’ to explain different
ways of strategy process. In his first ‘P’, which he named as ‘process of decision making’, he

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discussed the planning process. Strategy in this process emphasized a linear sequential sequence
of decision making which involves top management. In the ‘planning’ approach, Luoma (2014)
stresses the role of an analysis-driven strategy process and the implementation procedure with
complete reliance on structured action plans, budgets and balanced scorecards. Thus, his
approach of strategy emphasizes the planning aspect. Similar views are also reflected in
‘planning process approach’ by Näsi(1995), in ‘planning process framework’ of Gilbert et. al.,
(1988), ‘rational’ school of thought of Faulkner and Campbell (2003) and ‘rational perspective’
of Hutzschenreuter and Kleindienst (2006).

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.

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.

Mintzberg locates Porter in his ‘positioning school’ which advocates strategy formation as an
analytic process and it places the business within the context of its industry. Porter who is the
main proponent of this school of thought argued that a firm in order to succeed need to assess
both the attractiveness in an industry and its competitive position within that industry through an
evaluation using the five forces framework. Thus, he brought the context of competition out to
the industry level not in the firm level. This aspect has been discussed by Mintzberg in his
positioning school of thought. Porter proposed four generic strategies which attempt to place
firm on a well-defined ‘position’ in the economic market-place, thus strategy in this mode was
termed as ‘Positioning approach’ to strategy.

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’.

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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.

The positioning approach has been the central idea in Richardson (1994)’s ‘strategy as position’
perspective. In his perspective, he claims that the aim of the organization is to occupy an
attractive and productive position in its environment – to gain competitive advantage. The central
idea in McKiernan (1997)’s ‘competitive positioning approach’ is the analysis of the competitive
environment using Porter’s five-force framework. This process assists firms to identify potential
profitability of an industry and choosing appropriate generic strategy for acquiring competitive
advantage. Thus, McKiernan (1997) also supported Mintzberg’s positioning school of thought in
his competitive positioning approach.

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.

In the ‘power school’, MIntzberg (1990) considered strategy is developed through a process of
negotiation between power holders within the company, and/or between the company and its
external stakeholders. He emphasized that some important stakeholders, with the use of power
and politics can influence or negotiate strategies in favour of their interests. Thus, the strategy in
this form may be termed as ‘Stakeholder’s approach’. Freeman (1984) defined stakeholders as
“any group or individual who is affected by or can affect the achievement of an organization’s
objectives”. The stakeholder approach as explained by Freeman and McVea (2001), suggests that
managers formulate and implement processes which satisfy all and only those groups who have a
stake in the business. Further, they added that the central task in this approach is to manage and
integrate the relationships and interests of stakeholders, which is very much essential for the
long-term success of the firm.

Richardson (1994) viewed his ‘power’ school of thought is related to the stakeholder approach
where he explained that powerful stakeholders can influence organizational activity and they can
also exercise their power to determine what the organization will do. In this school of thought,

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strategy calls for skills in stakeholder analysis and in the formulation of proper political
bargaining process which will attract the stakeholders to contribute to the development of the
organization.

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.

Strategy formation is viewed as a fundamentally collective and cooperative process and the
strategy reflects the corporate culture of the organisation. It is formulated through a process of
social interaction, based on the beliefs and understandings shared by the members of an
organization.

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.

The strategy is a response to the challenges imposed by the external environment and
organisations respond by adapting to the environment. Strategies are positions in market and if
the conditions which gave rise to the growth of the firm change, the organisation is doomed.

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.

This school of thought tries to attain stability via various ways, and keeps transforming as long
as needed. The configuration school partially resolves the conflict between emergent and
deliberate strategy schools by incorporating both aspects of strategy formation. The Emergent
strategy is formed from within the organization during periods of stability. Deliberate strategy is
formed by management and consultants during periods of transition. It states that deliberate and
emergent strategy both have their thoughts and ideas which at times are conflicting. The

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configuration school is criticized as being too rigid in its distinction between phases of stability
and transition phases.

One of the most preferred amongst the 10 School of thoughts is the configuration school because
the basic premise in this is that the strategy needs to be configured. The strategy allows the firm
to move from one position to another, hence simple set of values will not help this movement. As
per the configuration school, strategy needs to consider a lot of facts and cannot be derived from
simple statistical data and values. The configuration school attempts to find a combination of all
aspects of the nine other strategy schools. An organization stands on the basis of a stable
configuration of its characteristics.

Conclusion

The process of strategy formulation has evolved in divergent ways and accordingly researchers
have expressed the strategy process in various ways. Several scholars have attempted to organise
their ideas about strategy formulation into a coherent model, or group of schools. These schools
of thought or similar classifications have discerned different opinions about the strategy
formulation or strategic approaches.

Researchers have reviewed the ten schools of thought of Minzberg and have accorded that each
of the schools provided different ways of strategy formulation. Mintzberg made an extensive
discussion over the ten schools of thought which provided a very good starting point to unravel
the insights of the strategic approaches. In this study, the different approaches to strategy were
obtained from Mintzberg’s classification.

Comparing the central tenets of the strategic approaches obtained from Mintzberg’s
classifications with those provided by other authors, this study could detect six approaches to
strategy. The approaches are Fit approach, Planning approach, Emergent approach, Positioning
approach, Resource based and finally, the Stakeholder approach. Each of these strategic
approaches to strategic has its distinct characteristics and emphases.

It was also found out that amongst the approaches, planning appeared in most of the
classifications followed by positioning and emergent, and these approaches can be considered as
dominant strategic approaches. However, this conclusion needs to be confirmed empirically.

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References

Aldrich, H.E. (1979), Organization and environments. Englewood Cliffs, N.J.: Prentice- Hall,
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Elfring, T., & Volberda, H.W. (1994), Schools of thought in strategic management:
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Thought in Strategic Management 12-13.12.

Faulkner, D., & Campbell, A. (2003), Competitive strategy through different lense. The Oxford
Handbook of Strategy, 1, 1-20.

Hutzschenreuter, T., & Kleindienst, I. (2006), Strategy-process research: what have we learned
and what is still to be explored. Journal of Management, 32(5), 673-720.

Karlöf, B. (1987), Business strategy in practice. Wiley. Chichester.

Mintzberg, H. (1990), Strategy formation: Schools of thought. Perspectives on strategic