01-03-2010, 01:06 AM
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Different views of strategy by MICHAEL E. PORTER
Different views of strategy
MICHAEL E. PORTER
Quote:
Introduction:
The readings in this first section introduce business strategy in two ways. The first is by diving into a particular definition of strategy, allowing the reader to get a sense of what the big issues are through some provocative statements by one of the most well known strategy theorists. The second way is by stepping back and considering different approaches to the study of strategy and the assumptions that underlie them. The reading by Porter fulfils the first task while the readings by Whittington and by Mintzberg and Waters fulfil the second task.
Porter claims that strategic decisions are ones that are aimed at differentiating an organization from its competitors in a way that is sustainable in the future. This is different from decisions based on operational effectiveness which are aimed simply at doing existing activities better. The reading serves as a good starting point by providing a ‘working definition’ of strategy which will undergo many changes as the readings progress. For example, the reading by Abernathy and Wayne in Chapter 10 will indirectly challenge Porter’s distinction by allowing for the possibility that even decisions based on operational effectiveness, such as learning curve strategies, may be strategic under certain types of conditions, for example when technology changes slowly. What types of decisions are strategic depends on the context and that context changes over time, for example over the ‘industry life-cycle’. Thus, strategy is both about doing new things as well as doing existing things better.
The reading by Whittington steps back and compares how different theories of strategy answer the questions ‘What is strategy?’ and ‘How do strategies come about?’. He exposes the different assumptions underlying the different theories regarding human nature and the relationship between individual action and the environment. His description allows deeper insight into the difference between the ‘Design’ school of strategy, which holds that strategy can be planned, and the ‘Emergent’ (or Processual) view of strategy, which holds that strategy is not the result of rational calculation but of experimentation and trial and error. The reading by Mintzberg and Waters provides an excellent example of the Processual view.
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