How is organizational direction determined? Every organization takes on some direction, in terms of what customers/clients it serves and what functions it performs for these customers. This direction is often called its purpose, Mission or realized strategy. An organization's mission is a set of statements that define the exchange relationship between the organization and its stakeholders or claimants. More specifically a mission defines the population served and the function it fulfills or the need it satisfies for that claimant. This direction, or mission, may be the result of a deliberate planning process or it may emerge as the result of a set of incremental decisions. Most Realized Strategies are the result of a combinations of Purely Deliberateand Purely Emergent Strategies. Brief descriptions of these two types of strategies follow:
Deliberate Strategy- This process starts with an analysis of a company's current mission and strategies. The most popular tool used in this process is the SWOT (Strengths, weaknesses, opportunities, threats) model. The external environment in terms of opportunities and threats, is analyzed by examining threats to the company's current position and new opportunities (new customers, new applications, unfulfilled customers needs, etc.). The analysis proceeds by examining the company's internal environment in terms of its strengths and weakness. A mission and competitive strategy is formulated that matches opportunities with strengths and plans are made to strengthen areas of weakness. The next step is to develop functional strategies that support the overall business level competitive strategy. Marketing, Human Resource, Financial, Operations, Information Systems, and R & D strategies are developed that support the business unit strategy. Finally, a control system (organizational structure) is designed to ensure that operational decisions are made consistent with the business and functional strategies. When every day decisions do not conform with the business and functional strategies, the Intended Strategy becomes an Unrealized Strategy. Many strategic plans have taken this route as they sit on shelves of corporate offices in nicely bound volumes.
Emergent Strategy- Emergent Strategies are the result of incremental decision making that achieve some degree of consistency over time and launch the organization into a direction. When decisions are made or problems are solved, they have potential strategic impact. As you remember from thePolitical Model of decision making, decision making is, by nature, a political process with various claimants attempting the influence each decision. When there is a strong control system (powerful hierarchy) that ensures that decision makers satisfy managerial constraints, intended strategies tend to become realized. However, when other influences are stronger, or there is not clear direction from above, decisions are made without regard to intended strategy and the organization takes on direction that is a result of the combined affect of these incremental decisions.
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