A Critical Analysis of Various Schools of Thought in Strategy Theory

Strategy possible action is a multi-disciplinary academic field with competing schools of thought based on often-incompatible assumptions, including level(p) the basic definition of the field of study. This is highlighted by the many attempts in the work decade to identify main paradigms, and search for new approaches.Mintzberg (1990 1998) has put antecedent a taxonomy of assumptions and approaches, identifying ten main schools of thought, of which three argon normative and in concert constitute the classical approach to business strategy. The other seven are descriptive in nature. Mintzberg named these schools the design, plan, localize, entrepreneurial, cognition, learning, power, cultural, environsal, and configuration schools (Haugstad, 1999).This paper will evaluate the design, homework, and position schools (the classical view) as a single approach, contrasting it with a cross of the learning and the cultural schools (the imagery-based view, according to Mintzbergs cl assification).1.0 The Classical Approach to StrategyThe second Industrial Revolution saw the emergence of mass national markets as developments in technology leadd means to production hereto unavailable. Economies of scale and stage setting provided the rationale for large-scale investment, and thus the emergence of strategic investment, and competitive strategy, as a means to shape market forces and affect the competitive environment.Subsequently, serviceman War II supplied a vital stimulus to strategic intellection in business as well as military domains, because it highlighted the riddle of allocating scarce resources across entire economies (Ghemawat, 1999).The work of Andrews, Christensen, Smith, Selznik, and Learned et al in the 1950s form the design school (in Mintzbergs taxonomy), while Ansoff by dint of his work on corporate strategy is seen as the founder of the planning school (Haugstad, 1999).The original design school outlook was that of essential enclothe betwee n a companys internal resources and capabilities (strengths and weaknesses) against an external environment (possibly hostile, providing threats as well as opportunities).This gave rise to a framework that came to be referred to as organise, representing a major step forward in rescue explicitly competitive thinking to bear on questions of strategy (Ghemawat, 1999 pg 6).The SWOT gained quick acceptance as management practice, but did not provide satisfactory closure to the problems of actually defining a firms distinctive competence, and resource allocation for abundant-term development versus short-term gain.Igor Ansoffs book, Corporate Strategy, was seminal in establishing the planning schools approach. Ansoff subscribed to the fit approach of the design school, but emphasized resource allocation in relation to a common thread that he defined as a firms mission or its commitment to exploit an existing need in the marketplace (Ghemawat, 1999).The planning school also emphasized a formal planning march resulting in detailed programming of the organization (Haugstad, 1999). Ansoff and others also worked to translate the logical system built into the SWOT framework into complex sequences of questions that needed to be answered in the development of strategies.Adam Marshall combined the concepts of add on and demand analysis in 1890 into the Marshallian scissors, which featured a downward-sloping demand curve and upward-sloping supply curve. He also introduced the concept of price elasticity of demand.Supply-demand analysis was readily incorporated into economics and marketing courses at business schools, though it seems to extradite had less impact on the teaching and practice of business strategy. early(a) economists of what became known as the Harvard School argued that the structure of some industries might consent incumbent firms to earn positive economic profits over long periods of time.Thus an attentions structure would determine the conduct of buyers and sellers and, by implication, the patiences performance in terms of profitability, efficiency, and innovation.Michael Porter, in his framework for industry analysis, generalized the supply-demand analysis of individual markets in several important viewrelaxation of the assumptions of homogeneity (of product) and large numbers (of competing sellers)shifting attention from 2-stage vertical chains, each consisting of a supplier and a buyer, to 3-stage chains made p of suppliers, rivals, and buyerscatering for potential entrants and substitute products.Porters work formed the hindquarters of what became known as the position school of business strategy. This school recognizes unless three generic strategies cost leadership, differentiation, and focusing. Thus, the school sees strategy as the infusion of an attractive industry (Porter, 1980), and good positioning within this industry (Porter, 1985).