A CRITIQUE OF PRESCRIPTIVE VIEWS IN STRATEGIC MANAGEMENT
ABSTRACT This paper presents a critique of mechanistic views to strategic management. It was done as part of the requirements for admission to study towards a Doctorate in Business Leadership in Strategic Management.
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ABSTRACT: Despite its long tradition and well known contributions, corporate strategy research is yet far from being mature. This paper proposes an innovative framework that approaches the field from the theoretical perspective provided by complexity theory. We propose to see the corporate level of the organization as the driver, pacer and framer of the overall firm's evolution process. Drive is provided by the cognitive representation of the corporate fitness landscape that is implicit in the firm's corporate plan. Pacing is a consequence of the kind of strategic initiatives ("search strategy") developed by the company. Framing is achieved through the architectural design that the corporate level implements for the firm.12/2003;
A CRITIQUE OF PRESCRIPTIVE VIEWS IN
TABLE OF CONTENTS
RATIONALE FOR SELECTING THE THEME..................................................1
IN SEARCH OF A NEW LENSES: - A REVIEW OF EFFORTS TO FIND A
THE CONCEPTUAL BASIS FOR THE CRITIQUE.......................................8
CRITIQUE OF REVIEWED ARTICLES.......................................................10
4.1 Principle 1: Strategy formation should be a controlled, conscious process of
4.2 Principle 2: Responsibility for control of strategy must rest with the chief
executive officer (or senior management).......................................................20
4.3 Principle 3: The model of strategy formation must be kept simple.............24
4.4 Principle 4: Strategies should be unique: the best ones result from a process of
creative design .................................................................................................27
4.5 Principle 5: Strategies emerge from the design process fully formulated...29
4.6 Principle 6: These strategies should be explicit and, if possible, articulated,
which also favours their being kept simple......................................................31
4.7 Principle 7: Only after unique, full blown, explicit, and simple strategies are
fully formulated can they then be implemented ..............................................32
5. INSIGHTS FROM THE REVIEW......................................................................37
The prescriptive school of strategic management treats strategy formulation
as a process of conceptual design, formal planning and analytical positioning
(Mintzberg, 1990). This school of thought has been cited as having made
significant contributions to the theory and practice of strategic management
over a number of decades. This notwithstanding, a number of authors have
started to query the dominance of prescription in strategic management and
have called for a paradigm shift towards more descriptive and organic
perspective that account for complexities that organisations have to contend
Amongst those authors who perceive a need for a shift towards an organic
perspective, is Farjoun (2001). This author states that prompted by the
limitations of the mechanistic (prescriptive) perspective, and inspired by the
advent of new ideas in the social and natural sciences, strategic
management’s second broad progression saw the emergence and spread of
This search for a paradigm shift sees other authors favouring a more eclectic
approach that seeks to develop a model for strategic management that
accommodates all the major contributions to the field. This urge to break new
ground and engineer a paradigmatic shift is evident amongst many of the
articles that have been reviewed.
The motivation behind selecting to critique prescriptive views in reviewed
articles on strategic management is in order to demonstrate that attempts at
finding a new paradigm notwithstanding, prescriptive views still retain a strong
influence. Through this critique, the author hopes to show the significant gap
that still remains to be bridged in the search for a paradigmatic breakthrough
in strategic management. The paper demonstrates that strategic management
is still fraught with conventional wisdom presented as innovation. According to
Ginter & White (2004), lessons learnt through the development of normative
and/or descriptive process models have yet to be integrated into a broad
The survival of prescriptive views in spite of evidence that a new way is
required for organisations to survive is attributed by Ackoff (2003) to the fact
that business managers tend to search for panaceas and simple solutions that
are prescribed by management gurus. According to this author, the
consequence of this is that 50% of the corporations in the Fortune 500 of 25
years ago no longer exist. This author further states that out of 23 new
corporations created in America each year, only one survives the first year.
Micklethwait & Woolridge (1996) cited in Miller & Vaughan (2001) state that
the proliferation of management theories and prescriptions is driven by two
basic human instincts-greed and fear.
This article is structured as follows: section 2 presents an overview of
reviewed articles’ attempts at finding a new strategic management paradigm.
This is followed in section 3 by a presentation of a conceptual basis that is
used to conduct the critique. In section 4, the reviewed articles are critiqued.
This paper ends with a presentation of insights in section 5.
A number of reviewed articles attempt a break with the prescriptive view to
strategic management by suggesting the development of models and/or
frameworks that seek to move beyond this view. Ansoff (1980) presents a
model for strategic issues management which represents a shift from strategic
management approaches that focus on periodic planning and response that
typifies the prescriptive school. Rather, in his article, this author suggests a
system which responds to signals in ‘real time’.
In another paper, this author further extends his views by developing a model
that seeks to capture what he regards as the emerging paradigm of strategic
management (Ansoff, 1987). His model for a new paradigm borrows from a
number of disciplines including politics, sociology, psychology and cognitive
logic. The model also focuses on interactions between strategic and
operational behaviour, and seeks to integrate the activities of sensing,
deciding and executing in strategy making.
Other authors attempt to ameliorate some of the perceived failures of the
prescriptive approach, which have seen organisations failing in spite of well
devised plans. Amongst these are Goold & Quin (1990) who borrow from
agency theory to suggest improving the effectiveness of planning processes
through strategic control systems. In their paper, these authors acknowledge
the importance of balancing between rigidity and looseness. Their view
borrows from economics and is somewhat akin to the unifying views of the
organic school of strategic management, including complexity theories.
In their work, Caldert & Ricart (2003) seek an innovative approach to the field
of corporate strategy by drawing on the theoretical tradition of behavioural
evolutionism as enriched by complexity theory. They particularly focus on the
application of the work of Kauffman (1993) in the field of biology, to
organisation theory. These authors define a complex system as “…a system
(whole) comprising of numerous interacting entities (parts) each of which is
behaving in its local context according to some rule(s) or force(s). in
responding to their own particular contexts, these individual parts can, despite
acting in parallel without explicit interpart coordination or communication,
cause the system as a whole to display emergent patterns, orderly
phenomena and properties, at the global or collective level” (Caldert & Ricard,
Other authors that explore complexity theory to strategic management include
Grobman (2005). This author states that complexity theory is revolutionising
the way scientists look at the world, and has ontological implications as well.
According to this author, complexity theory provides a framework for
theorising about how there got to be an organisation and an environment in
the first place so that general systems theory could be applied. The author
cites Cohen (1999) as stating that complexity theory is attracting much
attention because of dramatic changes occurring in the structure and scope of
business, government and non-profit organisations. In an environment that
seems to be changing, organisations want to be more adaptable and better
able to learn from experience in order to reconfigure themselves in the face of
Grobman (2005) regards the dominant paradigm for strategic management
that is driven by general systems theory as being reductionist in its suggesting
that a system can be analysed by understanding each of its parts, and that
there was a general linear relationship between inputs and outputs. The
author cites Anderson (1999) as stating that complex systems on the other
hand demonstrate nonlinearity because each component interacts with others
via a web of feedback loops
A composite approach that differs from general systems theory is adopted by
Spanos & Lioukas (2001). In their study, they seek to unify the industry
organisation viewpoint of strategy on the one hand and the resource based
view on the other. Their study is an attempt at building a theory and model
based on a composite approach between strategy, industry and firm asset
effects. They found that both firm specific and industry effects are important in
explaining firm performance, operationalised as market share and profitability.
Synthetic thinking is also propounded by Ackoff (2003). In an interview with
the Strategy and Leadership Journal, this author identified one of the
characteristics of a new paradigm for strategic management as synthetic
thinking. According to this author, synthetic thinking provides a better
understanding of complex systems than analytical thinking does. “Synthetic
thinking is a way of thinking about and designing a system that derives the
properties and behaviour of its parts from the functions required of the whole.
The whole has properties that none of its parts have” (Allio, 2003: 21).
Ginter & White (1982) contribute to the building of a new strategic
management theory through developing a theory of learning that
acknowledges the reciprocal influence of the environment on the one hand
and organisational behaviour on the other. This represents an early attempt at
recognising the role of complexity in strategic management. The Social
Learning Theory of Strategic Management theory (SLTSM) introduces an
organic understanding and extends the general systems thinking, by including
feedback loops to the conduct of strategy.
The purpose of Ginter & White’s paper is to present a theory that will permit
existing strategy concepts to be synthesised in an integrated framework. It is
an attempt at integrating a variety of theoretical schemas, including systems
theory, contingency theory, operational and managerial role definitions. These
authors state that these schema have provided limited, if-then prescriptive
models for strategic management. The SLTSM is premised on the view that
behaviour results from the interaction of persons and situations, rather than
from either factor alone. They cite Davis and Luthans who state that social
learning posits that the person and the environment do not function as
independent units but instead determine each other in a reciprocal manner.
Rumelt, Schendel & Teece (1991) contribute to the search for new
frameworks by drawing on economic thinking to explain enduring company
success. Their effort at presenting a synthesis between strategic management
and economic thinking results in an adoption of a resource based view and its
focus on factor market influences on firm performance. In addition to invoking
agency theory, these authors consider the contributions of other economic
influences on strategic management including game theory, transaction cost
economics and evolutionary economics.
Other authors that use the resource-based view to develop a unifying
research programme are Mahoney & Pandian (1992). Their integrated
research programme draws from economics, diversification strategy
explanations and industrial organisation. Their economics perspective draws
from agency theory, property rights, transaction costs, evolutionary economics
and game theory. In this article, these authors introduce an evolutionary
viewpoint to strategic management and define strategy formulation as
consisting of the constant search for ways in which the firm’s unique
resources can be redeployed in changing circumstances.
Prahalad & Hamel (1994) emphasise the need for learning and for managers
to change their dominant logic if firms are to survive the radical environmental
changes that characterise the current business environment. In their push for
the re-examination of traditional strategy paradigm, they emphasise the need
for managers to be able to anticipate the future, in a vain similar to that of
Clancy (1990). In order to assist managers, these authors present checklists
that present environmental factors that need to be anticipated. They point out
that old ways of doing strategy no longer work and that there is a need for
new lenses, including the use of game theory, chaos theory, war and
The role of chaos theories in strategy processes is acknowledged by Hamel
(1998), who states that writings on the process of strategy making have
tended to focus on the content of strategy and have overlooked the conduct of
strategy. Industry structure analysis is one example of this limited focus.
In addressing the over emphasis of strategic thought, primarily prescriptive
views, on the content of strategy, Venkatraman & Cannilus (1984) present
evidence of recent studies that have integrated the content and the process
conceptualisation of the concept of fit in strategy. They demonstrate that it is
possible to apply the concept of fit by looking at it from both an inter-
organisational (external) and strategic choice (internal) perspectives. They
also seek to move the application of the concept of fit beyond the traditional
bi-variate interactions (strategy and culture, strategy and management style,
strategy and structure etc) towards an understanding of fit as characterised by
a larger array of elements. To this end, these authors apply the Mckinsey 7s
model to show organisational congruence.
Munive-Hernandez, Dewhurst, Pritchard, & Barber (2004) develop a
comprehensive model for defining a corporate strategy, constructing a
strategy document and strategy implementation by applying a combination of
methodologies and tools. This model seeks to make a break with the
predominant focus on strategy content.
In the same vain, Caldert & Ricart (2003), developed a dynamic framework of
corporate strategy based on three interlinked sets of processes, viz. senior
management cognition, which they refer to as framing the fitness landscape,
corporate search strategy or strategic behaviour and architectural design.
Farjoun (2001) also develops an organic model1 which takes account of the
complex interactions and self influences amongst key strategic management
constructs of firm organisation, firm environment, firm strategy and firm
performance. This presents a holistic view of strategy that replaces the
conventional distinction between content and process.
The concept of strategy emergence, which represents another significant
break with prescriptive views, is propounded by Nichols (2000). This view
acknowledges that strategy evolves over time as intentions accommodate
reality. This author acknowledges the definition of strategy as plan, pattern,
position and perspective. The same views on strategy are expressed by
Mintzberg (1987) who holds the view that multiple definitions can help
practitioners and researchers alike to manoeuvre through the field of strategic
management. Farjoun’s O-E-S-P model also extends the concept of strategy
by recognising the existence of emergent strategies which may not be a result
of deliberate planning.
Attempts at breaking with the past are also evident in writings by authors from
other management disciplines. Writing from a marketing perspective, Clancy
(1990) makes a forecast of ten developments which will separate winners
from losers in advertising in 2020. Amongst these is the importance for the
1 The O-E-S-P model, conceptualizes of the interaction between the constructs as evolving or random
and best captured by the notion of continuous co-alignment
marketer to anticipate competitive defences and then develop and test
offensive strategies designed to overwhelm the competitor, more along the
lines of game theory.
Mintzberg’s (1990) discussion of the design school serves as the bases for
analysing the articles. As already stated, the critique seeks to demonstrate
that in spite of attempts by a number of writers to develop new approaches
and/or paradigms for strategic management the prescriptive perspective still
wields a lot of influence, even amongst some of those authors that purport to
seek new paradigms.
Mintzberg (1990) identifies ten schools of thought in strategic management.
Three of these he identifies as prescriptive in orientation. These treat strategy
formation as a process of conceptual design, of formal planning and of
analytical positioning, with the latter including research on the content of
competitive strategies. Six other schools are identified by this author as
dealing with the strategy process in a descriptive way. These include the
entrepreneurial school, the cognitive school, the learning school, the
environmental school and the configurational school.
Although his article is addressed to the design school, “this school’s basic
framework underlies almost all prescription in this field and, accordingly, has
enormous impact on how strategy and the strategy making process are
conceived in practice as well as in education and research”, (Mintzberg, 1990:
The following basic prescriptive principles are discussed by Mintzberg (1990)
and are used as a basis for demonstrating the level of inertia in strategy
research, writing and practice as reflected in the articles reviewed in the next
section of this paper. The principles are:
1. Strategy formation should be a controlled, conscious process of
thought, i.e. action follows once strategies have been fully formulated
and strategy is associated with intentionality and deliberateness.
2. Responsibility for that control and consciousness must rest with the
chief executive officer. That person is THE strategist, i.e. to this school,
ultimately there is only one strategist, and that is the manager who sits
at the apex of the organisational hierarchy. Mintzberg (1990) cites
Heye (1985) who states that this is a command and control mentality
that allocates all major decisions to top management, which imposes
them on the organisation and monitors them through elaborate
planning, budgeting and control systems. This also relegates
environment to a minor role of input to strategy formation but not an
intrinsic part of the process, to be accounted for and then navigated
through but not interacted with (Mintzberg, 1990)
3. The model of strategy formation must be kept simple: The idea that
one way to ensure that strategy can be controlled in one mind is to
keep the process simple.
4. Strategies should be unique; the best ones result from a process of
creative design: This means that it is the specific situation that matters.
Strategies have to be tailored to the individual case (Mintzberg, 1990).
He further cites Andrews (1965) that in each company the way in which
distinctive competence, organisational resources, and organisational
values are combined is or should be unique.
5. Strategies emerge from the design process fully formulated: there is no
room offered to incrementalist (evolutionary) views or emergent
strategies. There is a view for instance that strategy as perspective
appears at a point in time, fully formulated, ready to be implemented.
This relates to the view that the process reduces to choice. The
implication is that the strategist is able to line up alternative strategies
to be evaluated so that one can be definitively chosen.
6. These strategies should be explicit and, if possible, articulated, which
also favours their being kept simple: This view holds that strategies
should be explicit to those who make them and that they should be
articulated so that others in the organisation can understand them. The
strategy must be specific enough to require some action and exclude
others. This means that strategies have to be kept rather simple in
order to facilitate this articulation.
7. Only after unique, full-blown, explicit, and simple strategies are fully
formulated can they then be implemented: This means that there is a
sharp distinction between the formulation of strategies on the one hand
and their implementation on the other. According to Mintzberg (1990),
this is consistent with classical notions or rationality – diagnosis,
prescription, then action, representing the separation between thinking
and acting. The author further makes the point that the focus of this
school is on implementation not achievement, the assumption being
that given proper implementation, achievement is a foregone
conclusion. This according to Mintzberg (1990) is associated with the
premise that structure must follow strategy.
This section presents a critique of the reviewed articles using the seven
principles of Mintzberg (1990). The focus of the section is to demonstrate the
extent to which many of the reviewed articles have been influenced by the
prescriptive views that are based on these seven principles.
Many of the articles that have been reviewed adhere to the principle that
strategy formation should be a controlled and conscious process, with little or
no space for strategy emergence. The underlying viewpoint is that action
follows only once strategies have been fully formulated and that strategy is
associated with intentionality and deliberateness.
This view of deliberateness, driven as it is partly by the assumption that it is
possible to predict the future, is evident in Ansoff ‘s (1990) assertion that one
of the factors that have made it desirable to separate what he refers to as
strategic issues analysis from annual strategic planning is that organisations
may not need the cumbersome paraphernalia of annual planning in cases
where the basic strategic thrusts are clear and relatively stable and whose
environment is stable.
The strategic issues management procedure developed by Ansoff assumes
that it is possible to accurately predict trends both inside and outside the
enterprise. This extends to the prediction of when exactly the time of impact of
an issue will occur so that organisations can time their responses to occur
before this time. The assumption is also that it is possible to know for sure
what the impact of the issues will be on the enterprise.
In his article, Clancy (1990) also uses information about the state of
advertising in 1990 to predict what advertising will be like in 2020. This author
discusses 10 developments which will radically transform advertising.
According to this author, the doors of Eldorardo, the golden city will be open
to firms that successfully managed these developments. This forecast was
based on the assumption that historical trends observable in 1990 will
Ansoff’s presentation of the steps for Strategic Issues Management (SIM),
reflect strong rationality in another way. According to this author, steps for
conducting SIM include an analysis of environmental trends, internal trends
and performance trends, followed by an assessment of threats, opportunities,
strengths and weaknesses which then allow for the determination of the
impact and/or urgency of an issue. Extensive starting lists of the respective
trends are also presented. This shows the weight that this author places on
the role of rationality and conscious thought processes in strategic
In his support of the Gresham Law of planning, which states that if left
uncontrolled, the operational activity suppresses the strategic activity, Ansoff
(1980) further betrays a preoccupation with the implementation of strategies
as relying on a conscious process of control.
In keeping with the view that strategy is a rational process of thought, Ansoff’s
paradigm further links the scientific optics used by firms in conducting strategy
to environmental factors in a deterministic way, which in turn calls for the
rational analysis of the environment.
Strategic management as this conscious process of thought that is informed
by environmental determinism and rationality is also upheld by Goold & Quinn
(1990). These authors cite Simon (1987) as viewing the senior manager as
scanning the business situation and, from an assessment of all relevant
factors, arriving at a judgement of an appropriate response. This rationality
visualises a contemplative senior manager who is able to know what all the
relevant factors to consider in strategy making are. This person (the senior
manager) is also able to choose properly, from strategic choices that avail
themselves from their reflections. Through this rational contemplative
exercise, the scope of strategic management is reduced to individual
Rumelt et al. (1991) also see firms as having choices to make if they are to
survive. According to these authors, those which are strategic include
selection of goals, the choice of products and services to offer, the design and
configuration of policies determining how the firm positions itself to compete in
product markets, the choice of an appropriate level of scope and diversity,
and the design of organisational structure, administrative systems and policies
used to define and coordinate work. Further, these authors see strategy as
not necessarily a single decision or primal action, but as a collection of
related, reinforcing, resource-allocation decisions and implementing actions.
There can be no place for the role of chance and emergence in this design
Rumelt et al. (1991) further explain the role of economics in strategic
management and continue to place emphasis on rational decision-making.
These authors present a rationality that is required by making use of a
sophisticated view of equilibrium. The Nash equilibrium is where each actor
does the best he or she can with what they individually know and control,
especially when coupled with uncertainty, asymmetric information and
unequal resource endowments, permitting a broad range of intriguing
outcomes or looked at another way, different picks on the competitive
landscape (Ghemawat, Collis, Pisano & Rivkin, 1999). The troublesome
nature of uncertainty is thus adequately dealt with by a sophisticated process
that sees independently acting actors making conscious choices based on
information in their possession. This game theoretic rationality and its
attendant assumptions that all players are rational is also evident in the
papers by Camere as well as Saloner, reviewed in Rumelt (1991).
Strategic management is concerned with co-ordination and resource
allocation inside the firm (Rumelt, et al.; 1991). This is opposed to the
industrial organisation view that posits the primacy of industry in determining
firm performance. Both these perspectives are influenced by economics, with
the former focussing on factor markets and the latter on product markets for
explanation. Both are rational standpoints for explaining strategic
management based on different deterministic perspectives.
The influence of economic rationality on the resource-based view that is
propounded by Mahoney & Pandian (1992) is clearly demonstrable in their
article. The article draws linkages between the Resource Based View and the
different branches of micro-economics including transaction cost, agency
theory, evolutionary economics and property rights. These authors also show
the complementary nature of RBV to the industrial organisation paradigm of
S-C-P, i.e. the Bain (1968) and Porter (1985) framework. They do this by
showing that the product market and the resource market are two sides of the