Modern Schools of Strategy

Currently, there are various areas in science, which, while sharing common basic principles, nevertheless, place research accents in different ways, highlighting certain methodological priorities. Such areas are called scientific schools, in the case of the theory of strategic management – schools of strategic management. In the literature of recent years, the most thorough analysis of such schools is presented in the work of G. Mintzberg, B. Olsgrand and J. Lampel (Mintzberg H., Ahlstrand V.; Latfipel f. Strategy safari: A guided tour through the wilds of strategic management [40 p.7-8]. The authors preface their study with an ancient Indian parable about six blind sages who examine an elephant. One of them, buried in the back of an elephant, he appears to be like a wall, to another, who felt a tusk, he seems to be a sharp spear, the third, having examined the trunk, says that the elephant is a snake, etc. Hence the moral: in trying to prove the truth of their judgments, people do not listen to each other. The result is a general misunderstanding. Then the authors identify and analyze ten scientific schools of strategy:

School of Design: formation of strategy as a process of understanding the situation; School of Planning: Formation of Strategy as a Formal Process; School of positioning: formation of strategy as an analytical process; School of Entrepreneurship: Formation of Strategy as a Process of Foresight; Cognitive school: formation of strategy as a mental process; School of learning: formation of strategy as a developing process; School of Power: Strategy Formation as a Negotiation Process; School of Organizational Culture: Formation of Strategy as a Collective Process; School of external environment: formation of strategy as a reactive process; School of Configuration: Formation of Strategy as a Process of Transformation.

These schools, in turn, are divided into three groups. The first three schools have a prescriptive character – their adherents describe how strategies should be formed. Thus, representatives of the first school, which dominated in the 1960s (the next two arose on its basis), consider strategy as a process of informal design, i.e. design, engineering, modeling. The second school, which flourished in the 1970s, viewed strategy as a relatively independent process of formal planning. Proponents of the third school, which made itself known in the 1980s, focused not on strategy planning, but on its content. It received the name “school of positioning” because its followers considered the principles of choosing a strategy for positioning a company in the market as the most important task.

The next six schools (the second and third groups) consider specific aspects of the strategy formulation process. Their followers emphasize the study of real processes for developing strategies. The schools that make up the second group, seeking to link the strategy with the real behavior of the firm, tried to consider it as the result of anticipation of the future, an insight that allows the manager to accept risk. Thus, the strategy was associated with the processes occurring in the mind of the manager. Most consistently, this position was developed by the cognitive school, which chose cognitive psychology as its methodological basis and on this basis tried to penetrate the consciousness of the strategist.

The four schools that make up the third group try to overcome the uncertainties associated with the behavior of the individual, and deterministically analyze the process of strategic management. Thus, representatives of the school of education believed that the strategy should be developed step by step as the organization develops, self-learns. Representatives of the school of power viewed strategy as a process of negotiation between conflicting groups within the organization or between the organization and its external environment. According to the views of the proponents of the school of culture, the strategy depends on the culture of the organization, and the process of its development is a collective process. Theorists of the school of the external environment believe that the construction of strategy is a reactive process and is defined as a reaction to changes in the external environment.

The modern meaning of schools varies. Some of them have proven themselves well and hold reliable positions for analyzing the activities of companies belonging to “traditional” industries, others demonstrate the effectiveness of their methodology in newly developing, innovative business sectors, others are more suitable for designing strategic changes in non-profit organizations of municipal management [3 pp.13-15]. Therefore, it is not advisable to try to rank schools by importance or effectiveness in isolation from the real context, it is more important to learn how to apply effective methods of the entire arsenal represented by schools to solve problems that arise in specific organizations, situations and at a particular time.

A rational approach to strategic planning considers strategy as a process of consistent, systematic search for the optimal solution (model) of identifiable problems, and strategic management as “the practical implementation of the model extremely formally – almost on the verge of automatism” [11 p.52]. This approach is sometimes also referred to as “linear” (Chaffee, 1985) or “synoptic” (Fredericson, 1983).

If we consider organizations as operating in a complex and uncertain environment, then the basic methodological principle of rational explanations is the following statement: the behavior of people in the organization is determined exclusively by rational considerations, calculation, easily quantifiable benefits, therefore, the clearer the understanding of a complex situation, the more likely the correct (effective) decision. This approach is aimed at reducing the uncertainty of the situation, turning unlimited problems into limited ones, using system models (in particular, the system intervention model, which will be discussed below). Other principles of the rational approach are as follows:

Setting strategic goals that differ for different organizational levels. Without clear goals combined into a system, there are no criteria for strategic choice. However, the presence of goals provides a unitary approach to decision-making and strategy implementation; Understanding the strategic situation in which the organization finds itself is possible through the analysis process. Its subject is changes in the environment of the organization and their trends, as well as an assessment of the organization’s resources. The main question is: does the organization have the material, human, financial, informational and time resources to respond to the challenges of the environment? Such an analysis involves the use of methods for studying the directions of development of environmental factors, forecasting changes in its individual elements, using methods for studying competitors, financial analysis, etc .; Strategic decisions should be made by considering several strategic development options or possible strategies that can be followed. The “strategist” (manager) should be aware of the possible benefits and consequences of making certain decisions; These options should be measurable. Top managers should have the tool or methods of selecting the best option – the criteria for evaluating strategic options. Such criteria provide an opportunity to determine which strategy or combination thereof can be followed by corporate or business goals with minimal costs and in the optimal time, taking into account the known strengths and weaknesses of the corporation and taking into account the risks of implementing the strategy; The strategy is presented in the form of a strategic plan covering all levels of the organization, from corporate to operational; The chosen strategy must be implemented. Its implementation involves moving from general solutions to specific operational plans. The administration needs to decide how the strategy will be implemented (i.e., what “strategy strategies” will be used), the level of possible resistance to strategic change, and assess the need to transform the structure and culture of the corporation. It is also important to develop a monitoring system (benchmarks) to manage and provide feedback; Coordinated multi-level activities for the implementation of the strategy are assumed: strategic decisions are made at the highest, top level, decisions are made at the following levels to achieve the goals that make up the elements of the decomposition of the main strategic goal or mission [3 pp.18-19].