10.

The Strategy Process

The process of strategic decisions and how strategies are developed has been a dominant feature in the discussions within strategic management almost from the outset of research on strategic management. And remains to be so, as the difference between those who wants to plan and those who wants strategy tpo emergence has yet to be settled. In this chapter, we will attempt to shed a light how strategies are developed under the basic assumption that planning and emergence of strategy processes are not a dualism either-or but a paradox. The latter implies that any strategy process in practice needs some element of planning and some element of emergence. The learning objectives of this chapter are: To make the reader aware of the particular challenges related to developing and formulating strategies for organizations To make the reader know of the basic concepts related strategy prrocesses To introduce the reader to the considerations and methods related to the strategy process And to make the reader aware of the paradox of strategic planning versus strategic innovation.

10.1 Issues of the strategy process

Before we get to the discussion on strategy processes, it is necessary to go on a little detour in order to understand the background for the discussion between planning and emergence. 10.1.1 Are (strategic) managers rational? The title of this section asks the question of whether (strategic) managers are as rational as most strategy theory demands of them in order to apply the decision models of that strategy theory. If not, then evidently strategy theory must be changed to reflect the actual capabilities of human decision makers (and not the other way around), which serves as another reason for the evolution of new theory on strategic management as discussed in this book. In this chapter, we shall first discuss the assumptions of strategy schools regarding decision making and outline the duality between the complex school and the previous ones. Then, we will take a look at the empirical and theoretical research available on (strategic) decision making in order to decide on the question, are managers rational?, which we shall do in the final section of this chapter. Managers are rational, have clear preferences, full information, evaluate all possible solutions, and make optimal decisions has been the premise of much theory on strategy so far. If this is so, one can wonder what distinguishes managers from ordinary human beings, since most of us make mistakes, forget information, chose not to use information, and fail to consider all possible solutions; not to mention that we give up, lie, and cheat ... The problem that has initiated much of the research on newer approaches to strategy is what we prefer to call the problem of rationality. In the terms introduced in earlier chapters, the problem of rationality is that the four different schools of thought about strategic management makes different assumptions regarding the rationality of those who make strategic decisions. In this section,

three different assumptions will be outlined and discussed. Furthermore, we will make a short note on the issue of who makes strategic decisions and what the characteristics of such decisions are. Assuming rationality: the first three schools of strategy One set of concepts underlies virtually all traditional contributions to strategy theory, within this context traditional is taken to be the first three schools of thought about strategy. Usually referred to as SWOT, the conceptions of strengths and weaknesses, opportunities and threats are in the heart of traditional perceptions of strategy. As figure 10.2 will show later, these conceptions are part of virtually all proposals of formal strategy procedures in the literature. The CEO as the strategist. The ideas can be traced back to the initial contributions to strategy theory, in the first school of long range planning - where important authors include Andrews, Chandler, Drucker, and Selznick. The long range school's assumptions concerning strategic decisions is based on the belief that strategic decisions are a matter of one decision-maker (the CEO) using a few very basic ideas to design strategy in a top down manner. The initial decision-model can be illustrated in figure 10.1, which is inspired by (Mintzberg, 1994d) and (Twiss & Goodridge, 1987). Inspired by Mintzberg, (Mintzberg, 1994d), we may describe the premises of strategic decisions within the design school; 1. Strategy formulation should be a controlled, formal, and conscious process of thought. 2. Responsibility for the process must rest with the CEO: that person is the strategist. 3. Strategies must come out of the design process fully developed. 4. Strategies should be made explicit and articulated to the organization. 5. Finally, once the full-blown, explicit strategies are formulated, they must be implemented. It can be concluded that within the school of long range planning, there is generally only one strategic decision-maker and that she is perfectly capable of making perfect and rational decisions. This picture has only been changed slightly over the years, i.e. in the next two schools. As noted by Mintzberg - and evident from the previous discussions on strategic schools -the main difference is the introduction of staff-analysts to aid the CEO as strategic decision maker.

External Analysis Threats and Opportunities

Internal Analysis Strengths and Weaknesses

Creation of Strategy

Choice of Strategy

Implementation of Strategy

Figure 10.1: The typical - perfectly rational - decision model for strategic processes. Strategy as a formal planning excercise. The main difference between the first and the next two schools lies in their assumptions regarding simplicity of strategic decisions, (Mintzberg, 1994d). The latter two schools "side-step" the idea of the CEO as the strategist and brought the planners in the centre of attention as the following list of premises may serve to illustrate:

1. Strategy formulation should be a controlled and conscious as well as

formalized and elaborated process, decomposed into distinct steps, each delineated by checklists and supported by techniques. 2. Responsibility for the overall process rests with the CEO in principle: responsibility for its execution rest with the staff planners in practice. 3. Strategies come out of this process fully developed, typically as generic positions, to be explicated so that they can then be implemented through detailed attention to objectives, budgets, programs, and operating plans of various kinds. Once again we see that the strategic decision-makers are assumed to be perfectly rational and analytical people who make strategic decisions in a topdown manner. For obvious reasons we cannot offer any detail account of the decision-models behind strategy theory here, but we can only urge the reader to study (Mintzberg, 1994d) for a detailed description. Assuming Bounded Rationality the newer schools The newer schools about strategy take another approach: that of recogniszng bounded rationality of strategic decision-makers. This has a lot to do with a number of descriptive contributions offered by people like Henry Mintzberg, (Mintzberg, 1978, 1988) and James Brian Quinn, (Quinn, 1980) in which strategic management in practice is seen as a synthetically rather than analytical process. We shall return to that point later. The premises of the three newer schools approach to the strategic process is that strategic decision-making, like any other type of decision-making, is subject to

biases of the decision-makers, see the following figure 10.2 for an illustration. Such biases may include simplification, in which decisions on complex problems are made on the basis of a few simple elements, hindsight, in which decisions are made on the basis of improper analogies to past decisions, and aggregation, in which decisions are made on the basis of improper grouping of classes or types of information, (Stahl & Grigsby, 1992). Consequently, the assumption of the strategic decision-makers as perfectly rational has been abandoned on grounds of;"...the situation a strategic decision maker faces is complex and made up of far more phenomena than he/she can possible comprehend. The decision maker brings a cognitive base and values to a decision, which create a screen between the situation and his/her eventual perception of it ...", (Hambrick & Mason, 1984, p. 195). Some authors go even further to argue that top-down, rational management is impossible in practice. This is must be so because, those who are managed often have much more energy, time, and resource at their disposal to oppose against those who manage, than the other way around. An example is tax legislation, where we, the taxpayers, can spend almost indefinite resources on cheating (especially if we share our ideas and findings) compared to the resources used on controlling and managing us. Still, we find it very hard to "give up" on the idea that management is possible, it has to be since there is much need in the world today for changing matters to the better - not just the world of business organizations. Thus, a basic premise of this chapter is that management is possible, even though not in the form of rational, analytical management as prescribed by much of the literature on (strategic) management.
Limited Field of Vision Selective Perception Interpretation Managerial Perceptions Values

The Situation; all potential environmental and organisational stimuli

Cognitive Base

Strategic Choice

Figure 10.2: A model for bounded rational strategic decisions. [Adapted from (Stahl & Grigsby, 1992)]. 10.1.2 What characterizes the strategic management task? The task of strategic management is what the strategy process should deal with. Thus, to discuss what characterizes this task is relevant at this point in time. From the discussions so far, especially those in chapters 3-5, we may conclude that the task of strategic management is characterized by, at least, two things. First, it is difficult to establish cause-and-effect relations between relevant phenomena in strategic management. For instance, how will a change in the weather affect a firm? Probably very little, some would say. But, if the firm produces ice-cream, the weather can be of great importance, since the investments made during a warm summer will affect the firm for several years ahead. It is not possible to experiment in order to establish cause-and-effect relations. This mainly due to the time-horizons inherent in many strategic decisions and due to the scale of the experiment, e.g. it is difficult to build a new test-plant, not to mention 10 test-plants, as well as measure the effects of such actions. The second characteristic is that the degree of freedom in strategic

management is extremely high, i.e. there are many different ways of resolving a specific problem. For instance, if a firm faces a decrease in annual turn-over, the firm may choose to develop new products, new markets, cut costs, acquire suppliers, out source to suppliers, and many other options. None of these options are inherently "better than" others and must be investigated. Based on these two characteristics, strategic management resembles an "openended" problem, (Churchman, 1968). This is the kind of problem where objective analysis and quantitative methods cannot be utilized, (Churchman, 1968), (Checkland, 1981). Instead of analyzing the "optimal strategy", interested parties should be involved in a dialogue in order to establish the "best strategy", i.e. the strategy that motivates stakeholders to action and involves learning on the part of the participants in order to remove them for their initial lowest common dominator of opinions. Therefore, in strategic management much effort should be allocated to the formulation of the problem-situation prior to analysis of options and planning of action plans, (Drucker, 1954), (Ackoff, 1970). In other words, it is of vital importance that strategic programming (of which we know so much) is preceded with strategic thinking about the need for changing the strategies of the firm and on means to do so (Mintzberg, 1987). 10.1.3 The issues of the strategy process This brief discussion enables us to formulate a set of issues that top management need to resolve and explore as part of their strategic work. The issues are a mixture of traditional approaches to strategic planning, e.g. (Ansoff, 1965), (Aansoff & MCDonell, 1990), and (Andrews, 1960) and issues related to longterm strategic thinking, e.g. (Hambrick, 1982), (Heijden et al, 2002) (Lynch, 2005) and (Schwartz, 2001) and aims at covering understanding of both the planning and emergent approach to the strategy process. The issues are: What are the factors in the present strategy task that are of a strategy process for the organization? What is strategic planning and how can organizations planning? What is strategic thinking and how can organizations thinking? How can strategic planning and thinking be combined in order to create pragmatic strategy processes? important to the design benefit from strategic benefit from strategic a pragmatic manner in

For the individual organization, other issues may be of relevance at any given point in time, but the issues above should offer the reader a certain overview of our thinking about the strategy process

10.2 Empirical investigations of the strategy process

As we saw in chapter 2, the critique of the traditional strategy schools and no least their rational approach to the strategy process is often that they lack empirical evidence to support their claims. Since empirical evidence, obviously, is very important in modern strategy research, we will review some of the actual empirical investigations of the strategy process in this section. 10.2.1 The myth of rationality The idea that decision-makers are/should be rational is not unique to strategy theory. On the contrary, it is an integral part of modern Western philosophy and of our everyday life. For instance, answering the question why did you do that? will usually be in the form of I did it because I expected that my actions would have a positive outcome according to my preferences - at least, if one claims to be a normal and rational person. Thus, the myth of rationality demands a certain kind of explanations of people's behavior: teleological behavior. This implies that the strategic manager does something when she believes that the outcome would benefit her and her firm. This kind of explanations is not only used in everyday life (March, 1989), they are the basic line of argument in newspapers, in bars, and in universities. They have become basics in major parts of research on economy, psychology, sociology, and, most importantly for we, strategic management. According to March, the reason why the myth of rationality is so popular is, very simply, that since the idea is the foundation for may societal institutions, these institutions will attempt to preserve the idea, i.e. rationality is important because of its contribution to keeping society as it is (March, 1989). The obvious starting-point for this discussion is to start by asking what does it mean to say that (strategic) managers are rational? As a starting-point, we has decided to use the model of decision-making advocated by Russel Ackoff, (Ackoff, 1970, 1978/), in which the making of a decision is about ends, solutions, implementation, and control of a decision. Thus, rationality of top managers means that it must be assumed that the strategic decision-makers are able to formulate and specify the common objectives of the organization in the situation in question, formulate all possible solutions to achieving the objectives, evaluate these, and select the optimal one. Furthermore, the decision-makers should be able to determine, and take into account, the resources necessary for implementing the selected solution, design procedures and organization for the implementation of solutions, and finally control the decision once implemented. Furthermore, having assumed that the strategic decision-maker is perfectly rational, makes it possible to deduce a number of basic ideas of strategy theory regarding management. Rationality implies that strategic management consists of orders, plans, and control from managers to the rest of the organization, strategic plans and orders will have repercussions for the rest of the organization, i.e. lead to the formulation of lower level, tactical and operational, plans and orders. Strategic directions may be broad, in the form of objectives, or more detailed, in the form of rules, but the important issue is that strategic management is management from above. Regarding control, this is also a topdown process. This, furthermore, implies that the relationship between top managers and the rest of the organization is a relationship between superiors (managing) and employees (managed). This picture of strategic managers and of how strategic management above is drawn in much of the traditional literature on strategy, i.e. the first three schools

of thought about strategy, either explicitly, as in the design school's appraisal of the CEO as the strategist, or as the idea of the next two schools of planners as the centre of attention in strategic management. For the purposes within this context, the natural question is whether the picture painted of strategy and top managers is a believable one? In the next sections, the issue will be that of empirical investigations of how strategic decisions "are". There are many ways to do such empirical investigations but a rather traditional division, reflecting two completely different research traditions, is the division between survey research and case study research. we will use this division to describe and discuss results of a different character on strategic decisions. 10.2.2 Survey Investigations of the strategy process First, there exists a few major survey investigations on the practice of strategic management. According to Mintzberg, however, the number is surprisingly small, (Mintzberg, 1994d), and, to be fair, in 1979 Peter Lorange was able to cite fewer than 30 survey investigations of strategic management (Lorange, 1979). Almost all of these investigations was centered around the question of "Does planning pay ?" or in Mintzberg's words:"...if planning produces higher profits, how could anyone possibly criticize it?...", (Mintzberg, 1994d, p. 92).The results of these surveys are mixed, i.e. there appears to be no clarity as to whether strategic management should be conducted as formalized planning or not. Starbuck's conclusions on survey investigations. The results of the studies were, at best, confusing. For instance, William Starbuck cites a study by Brinyer and Norburn were they found that firm's profitability correlates only very weakly with the formality of planning (r = 0.22), (Starbuck, 1993). This is, indeed, a very weak correlation, since the optimal correlation is 1. Starbuck's conclusion is that: "... planning and strategizing generally make unimportant contributions to profits...", (Starbuck, 1993, p. 77), and the paper is an attack on leading management textbooks that: "... preach that actions produce more benefits if...", (Starbuck, 1993, p. 78): Managers construct sturdy rationalization before they act, if firms behave in consistent ways, and if managers turn long-range predictions into formal plans. With little question Starbuck has the errand to question the assumptions of the traditional approaches to the strategy process, and he points to the fact that most survey investigations have failed to produce "objective proof" to the hypothesis that formalized and rational strategic (planning) process does lead to higher (financial) performance. Furthermore, Starbuck notes that there are fundamental barriers to achieving measurable gains through strategizing, (Starbuck, 1993), of which he mentions three. First, most firms compete against skilled competitors that have access to much the same information as the firm itself. Since, these competitors can either anticipate strategic moves or react to them promptly, it is very difficult to gain meaningful (sustainable) competitive advantages through strategizing as such. Second:"... no-one can predict accurately beyond a few months ahead...", (Starbuck, 1993, p. 81). In other words, the very basis of stategic planning, i.e. forecasts, are bound to fail. Finally, Starbuck claims that nearly all managers misinterpret both their organizations and their market environments. He cites an investigation by Payne and Pugh, who compiled data that suggested that most

people (including managers) see their own firms inaccurately:"...member's beliefs about their firms correlate very weakly with measurable characteristics of their firms... [Starbuck notes that]... I was reassured to learn, as you may be, that people do know whether they are working in large firms or small ones..." (Starbuck, 1993, p. 80). Furthermore, Starbuck cites two investigations on the accuracy of managers' beliefs about their market environments to make his point more clearly, but we thinks that the point is made all ready. Regarding the conclusion, regarding survey research, Starbuck notes:"... Many studies have looked at the relationship between formal strategic planning and profitability...[and] ...the best research shows that, on the average, formal strategizing doesn't increase profits enough to discern. ... [Furthermore] ...most of these studies have been quite poor...", (Starbuck, 1993, p. 78). Some further comments on the nature of survey research and its results. As indicated above, apart from their results, there may be gounds for attacking survey investigations even further. A first comment of survey research on strategic management could be that, in our view, survey research can tell very little about the detailed processes of strategy. This has to do with the fact that a questionnaire should be designed so that it can be completed in, virtually, a few minutes - otherwise the respondents may not bother to answer. Thus, there is the question of reliability. Mintzberg notes that:"... answers come cheaply on seven-point scales. But how objective can planners be in assessing planning?...", (Mintzberg, 1994d, p. 93). One additional point of critique is, thus, that if a questionnaire can be filled out in minutes, the respondent will either make subjective answers, e.g. not bother to find the correct answers, or not respond at all. According to Mintzberg, the response rates of such mailed survey were generally in the range of 20 percent, which leads to the question of what the researchers know about their resulting sample. Even in the case of objective answers from a high number of the sample, a questionnaire investigation, still, excludes any kind of detailed explanations. Consequently, surveys should be used for investigating questions in the form of "how many" ?, i.e. quantitative information. Quantitative data may not characterize the actual processes of strategic decision-making, as we shall see, but surveys will tend to see only that. Armstrong, who reviewed some of these studies, commented that;"...in fact, I was unable, in most studies, to find any description of the...process...[of making strategic decisions]...", (Armstrong, 1982, quoted in Mintzberg, 1994d, p. 94). Thus, in summary it may be concluded that survey investigations have produced very few conclusions and that, even if they had, we would not be inclined to believe the results of such research on a subject as difficult as on strategic decisions. 10.2.3 Case study investigations Case studies, which are supposedly designed to reveal detailed processes, (Yin, 1988), have resulted in descriptions of management in practice that has very little resemblance with the picture of perfect rationality drawn above. Case study research may make it possible to achieve detailed insight by answering questions of the form "Why?" and "How?". Thus, we may naturally take a look at deeper evidence of which there exists a few: Mintzberg's initial investigation on management, his later studies of strategies in practice, Quinn's work, as well as a few others, see (Mintzberg, 1994d). Mintzberg's initial research on managerial decisions.

Back in 1973, Mintzberg spoke of what management actually is. Based on five case studies of managers, Mintzberg came up with a number of interesting conclusions, (Mintzberg, 1973) A few of the main conclusions are: The manager may be likened to the neck of an hourglass, standing between his own organization and a network of outside contacts, linking them in a variety of ways..., (Mintzberg, 1973, p. 51). Managers do not work according to procedures that have been prescribed by scientific analysis..., (Mintzberg, 1973, p. 161). The manager is his organizations generalist with the best store of non-routine information, (Mintzberg, 1973, p. 97). The manager serves as the focal point for his organizations value system. Influencers direct their statements of preference to him; he, in turn, assimilates and combines these according to the power of the source, and disseminates information on overall organizational values to subordinates who use it as a guide in decision-making..., (Mintzberg, 1973, p. 97). Mintzberg's early research on what managers actually do shows little resemblance with the picture of the perfectly rationally strategic decision-maker drawn in section 10.1, despite the great details in its results. Furthermore, the research illustrates that are doing a lot of things that are not "strategic" in any sense of the word. Later, we shall see that this descriptive research seems to correspond to more normative research on garbage-can decision-making. The "structure" of strategic decisions. A few years later, in 1976, Mintzberg and coauthors published another study on The structure of "unstructured" decision processes, (Mintzberg et al, 1976). The study was a field study of 25 strategic decision-processes which was combined with a review of related empirical literature. The starting-point for the study seems to be that:"... much of the large body of research on group decision making, carried out primarily in the social psychology laboratory, is of little use to us here...", (Mintberg et al, 1976, p. 247). One of the main reasons for the assertion is that actual decision processes are oversimplified in such research. Thus, a descriptive case study seems to be the only solution to the problem of understanding strategic decisions. The research was not easy, in fact Mintzberg attempts to discuss the reliability of their own research, mainly because strategic decision processes were found to be characterized by:"... novelty, complexity, and openendedness, by the fact that the organization usually begins with little understanding of the decision situation it faces or the route to its solution, and only a vague ideas of what that solution might be and how it will be evaluated when it is developed...", (Mintzberg et al, 1976, p. 250). Mintzberg and his coauthors manage to come up with a conceptual model for such "unstructured" decision processes consisting of three phases: identification, development, and selection, and a number of different routines, i.e. recognition, diagnosis, design, search, screen, judgment, analysis, bargaining, and authorization. Even with these very conceptual elements, each decision process will be different, and Mintzberg et al notes that"... we have, however, barely scratched the surface of organizational decision-making. Little is known about the most important routines, notably diagnosis, design, and bargaining...", (Mintzberg et al, 1976, p. 257). The McGill research: patterns of strategic decisions. Later, Mintzberg and others at McGill University attempted to track the strategies of several organizations to find out how these formed and changed. The findings of this research reinforce the conclusions above, (Mintzberg, 1994d). In general, strategy making was found to be a complex, interactive, and evolutionary process:" best described as one of adaptive learning...", (Mitzberg, 1994d, p.

110). Furthermore, strategic change was found to be uneven and unpredictable, with major strategies often remaining relatively stable for long periods of time, sometimes decades, and then suddenly undergoing massive change. Regarding the process of making strategic decisions, Mintzberg notes:"... The process was often significantly emergent, especially when the organization faced unpredicted shifts in the environment, and all kinds of people could be significantly involved in the creation of new strategies. Indeed, strategies appeared in all kinds of strange ways in the organizations studied...", (Mintzberg, 1994d, p. 110). In another contribution, Mintzberg has noted that many of the most important strategies, found in the McGill research, seemed to grow up from the "grass roots" rather than all having been imposed in a top down fashion, (Mintzberg & McHugh, 1985). It was the findings of this research which enabled Mintzberg to write his famous HBR article on strategy making a craft, (Mintzberg, 1987), and to propose the notion of strategies a patterns of behavior resulting from planning, unrealized and emergent strategies in total, (Mintzberg, 1978). Consequently, strategies may be the result of very intuitive and create process or, perhaps, simply emerge. The metaphor for this notion of strategic decision-processes, in sharp contrast with the one of architecture in the traditional schools about strategy, has been taken to be that of crafting. To quote from Mintzberg's famous HBR article:"... Imagine someone planning strategy. What is likely to spring to mind is an image of orderly thinking ... the keynote is reason - rational control, the systematic analyses of competitors and markets, of company strengths and weaknesses, the combination of these analyses producing clear, explicit, full-blown strategies... Now imagine someone crafting strategy. A wholly different image likely results, as different from planning as craft is from mechanization. Craft evokes traditional skill, dedication, and perfection through the mastery of detail. What springs to mind is not so much thinking and reason as involvement, a feeling of intimacy and harmony with the materials at hand, developed through long experience and commitment. Formulation and implementation merge into a fluid process of learning through which creative strategies evolve...", (Mintzberg, 1987, p. 66). Since then, a number of other papers have discussed the notion of crafting strategy. For instance, Huntsman describes a practical experience of separating strategic and tactical issues, (Huntsman, 1994), an idea which seems to correspond with the results of the McGill research as it was concluded that planning does not create strategy so much as to program a strategy that already exists:"... companies plan when they have intended strategies, not in order to get them. In other words, one plans not a strategy but the consequences of it. Planning gives order to vision, and puts form on it for the sake of formalized structure and environmental expectation. On can say that planning operationalizes strategy...", (Mintzberg, 1994d, p. 111). Still, it is Mintzberg's basic argument that planning does not improve strategy making, but rather constrains the basic entrepreneurial characteristics of strategy making. Quinn's research: logical incrementalism. Another one of those who have focused on the strategy formation process is James Brian Quinn, who found rationality (and formal planning) conspicuous by its absence. The starting-point for Quinn-s idea of logical incrementalism is what is refers to as strategic anomalies of traditional schools of thought about strategy, (Quinn, 1980), i.e. that traditional (rational) methods essentially foreclose radical innovation; shorten the effective time horizon considered, etc. In short, Quinn seems to claim that traditional approaches to strategy are much too bureaucratic and focused on short-term financial results. For instance, Quinn cites the example of Pilkington Brothers where a completely new technology, float glass, was developed to change an entire industry. Quinn quotes the chairman of Pilkington

to say that the technology took 12 years to break-even on cash flow and that, having known this in advance, few "accountants" would have accepted the development of the technology, (Quinn, 1980, p. 174). In his research, Quinn probes into the strategy formation process of a number of large firms and, based on his findings, he proposes the notion of logical incrementalism to describe strategy formation. Quinn concludes;"...My data suggest that when well-managed major organizations make significant changes in strategy, the approaches they use frequently bear little resemblance to the rational, analytical systems so often described in the planning literature...", (Quinn, 1980, p. 38). Quinn's research lead to his proposal of the notion logical incrementalism to denote successful strategies in practice - a process of the gradual evolution of strategy driven by conscious managerial thought. In other words, rather than major strategic revolutions, managers seemed to formulate and implement strategies in small, incremental, steps. Quinn offers two reasons for this. First, most planning was carried out bottom-up by managers responding to the narrow needs of their units' products, services, or processes within a longstanding framework of assumptions, and so on. Second, plans were "properly designed" by most managers to be flexible:"intended only as frameworks to guide and provide consistency for future decisions made incrementally during shorter term operating cycles...", (Quinn, 1980, pp. 40-41). Regarding planning, Quinn notes that formal planning proved inflexible. To often, formal planning resulted:"... primarily in either formless wordy statements of principle or detailed budgeting plans...", (Quinn, 1980, p. 154). Nevertheless, Quinn did manage to find a role for planning, similar to the one suggested by Mintzberg, and Huntsman, above. In practice, planning:"... provided a mechanism through which earlier strategic decisions were confirmed ... [in other words, planning helps to]... codify as well as formalize and calibrate agreed-upon goals, commitment patterns, and action sequences...". (Quinn, 1980, p. 41).

10.3 Alternative views of the strategy process

We will now turn to some other contributions to the area of (strategic) decision theory: the theoretical contributions. Such contributions are not based on study of empirical practice, but are more hypothetical in nature. In practice, this may not be the case entirely as the distinction between empirical and theoretical research is hard to maintain completely. Thus, the contributions included in this section may very well be based on empirical studies, but are theoretical suggestions as to how (strategic) decisions are actually made in reality. Of course, the idea of decisions being made as a result of deliberate, rational and "economic" action is not the only one being advocated in the literature. At least three other ideas can be found: The idea of decisions being controlled by the logic of identity through a system of organizational structures, rules, roles, and habits. The idea of decisions being strongly influenced by the interactive environments of which the decisions are part. The idea that the outcome of a decisions is not an important foundation for understanding how decisions are made. We will discuss these three ideas shortly in this section. 10.3.1 Decisions as controlled by the logic of identity

Of course, there has been modifications to the original Rational Economic Man model of decision making, but most of these modifications either still assume consistent preferences and bounded rationality in making choices, or add the complication that numerous actors may have conflicting preferences, (March, 1989). Such models underestimate the importance of reason in an alternative description of decisions - a description that concerns identity, responsibility, role, and rules. Much behavior of decision makers mirrors the routine-like manner in which decision makers go about solving their tasks. For instance, in most cases many members of an organization act according to certain rules, even though it is obvious that they thereby do not serve their own interests, (March, 1989). Much behavior in organizations is standardized in work routines, professional standards, quality standards, cultural norms and organizational structures. Thus, it may be more relevant to discuss decisions in the light of duties and roles than in the light of proactive, consequence-guided choices. According to James March, when organizations and individuals make decisions, it seems to be of major importance to detect or establish some rules that it would be "appropriate" to follow. Instead of looking at (all) possible choices and their consequences, decision makers match situation and identity by asking: Situation. What kind of situation am I in? Identity. What kind of person am I? Matching. What would it be appropriate for a person like me to do in a situation like this one? Such rule-based behavior is not intentional in strict terms as it does not stem from an attempt to maximize the decision makers own interests and from calculations of future consequences of the choice in question. Rather, rule-based behavior is created when a variant (and often blurred) set of conditions are used on a variant (and often blurred) set of situations. The rules of this perception of decisions may be seen as a collection of different perceptions of how the world functions, who you are, and how one is to behave, i.e. the rules are a cultural matter. The culture is developed over time and contains knowledge created through earlier experiences and analyses. Furthermore, a culture is very difficult to analyze and map and this has made it interesting to look at how the rules are created and developed. Three different theories have been offered, (March, 1989): 1) rules and roles may be perceived as the result of a settlement between rational actors, i.e. the process which creates rules is a rational decision process. 2) An organization or a society may be perceived as a system which learns from its experiences and which slowly changes the rules for behavior based on the reactions of the environment. 3) Thirdly, the change of rules may be perceived as the change in combination of rules selected among rules which (by themselves) are not changed. Most researchers, who have studied development of rules, claim that neither of the three theories for the development of rules offers any reliable guarantee that the rules of an organization will be optimal at any point in time. This, in turn, counters the tempting proposal that in a fight for few resources, only the rules which caused "optimal" decisions will be able to survive, i.e. survival of the fittest of rules. Still, most researchers do not believe this to be the case, (March, 1989). 10.3.2 Decisions in interactive structures The picture drawn of orderly and rational decision making in organizations does not take into account the confusion and complexity which actually surrounds the decision maker: at lot of events take place simultaneously, procedures changes and are not understood properly, alliances, preferences, and perceptions change;

problems, solutions, occasions, ideas, people, and results are mixed in so many ways that their interpretation becomes uncertain and their relations blurred; actions in one part of the organization seems only loosely coupled to actions in another part; solutions seem only ollosly coupled to problems; decisions are not implemented; decision makers seem to wander in and out of decisions. The confusion has made James March (originally with Pierre Romelaer) illustrate organizational decision process as "weird football games":"...imagine a circular, sloping field with numerous goals and a number of people playing football. Many different players (but not everybody) can participate (or leave) in the game at different points in time. Some people can throw new balls into the game or remove existing balls. While they take part in the game, each of the players attempt to hit all the balls that pass them into whichever goal they prefer and away from the goals that they wish to avoid...", (March, 1989, p.63). Such descriptions has made a number of researchers view organizations as large systems of internally related subsystems, who are all integrated into large, complex super-systems of industries and markets. The results of an organization seems to be created by their systemic characteristics to a much higher extent to by recognizable preferences and interests of individual actors. Furthermore, most organizations exist in dynamic surroundings: as the organization changes, so does the environment in interaction with the many organizations in it. Thus, results of the actions of one organization is not decided through one decision process, but in complex networks of interacting organizational systems and subsystems. Another aspect of such of view of organization is that the view of an organization as a hierarchy must be abandoned, organizations are perhaps better described as networks of relations, (March, 1989). In an organization characterized as descried above, decision processes must be loosely coupled, i.e. when and where a decision is made must be contingent on just how much time and effort decision makers are willing to invest in a particular decision, when there are so many decisions and situations demanding attention at a constant basis. This has made March & Olsen suggests the so-called garbage can model for decision-making, (March, 1989). The model assumes that opportunities for making decisions, problems, solutions, and decision makers are caused by environmental (outside) stimulations at certain points in time. Problems and solutions become related to certain decisions, and thereby to each other, not because of means-ends relations, but because they happen to be present at the same time, (March, 1989). Order is based on the logic of timing sequences, rather than on hierarchical or consequential logic. In the final analysis, almost any solutions can be linked to almost any problem - if they occur at the same time. This is the kind of decision processes, which seem to fit the chaotic picture of an organization outlined by the "weird football game" above. 10.3.3 Decisions as artefacts. Within all of the theories for decision-making discussed so far, a basic premise is that decision processes are about making decisions, i.e. the outcome of a process is an important characteristic of the importance and structure of that process. History is written as a number of related decisions, and it is often assumed to those who study decisions that the decision process must be seen in light of its outcome, that decision-makers enter the process in order to affect the outcome, and/or that the meaning of life is to make decisions. However, another interpretation is that decisions are filled with processes, which are not related to the outcome of the process: information, allegedly gathered to make a decision, is not used, disagreement on organizational policies is turned into indifference regarding the implementation of those policies, and so on. This has given rise to the idea that decision processes only to a certain extent - and often only by

accident - is about making decisions. Instead, a decision process creates, (March, 1989): An opportunity to make clear virtues and truths, to find out or interpret what is happening, what the decision makers have been doing and what justifies their actions. An opportunity to reward and punish for something that has happened and, thereby, an opportunity to use, challenge, or reaffirm friendships, relations of trust, disagreements, power, or status. An opportunity to socialize, to educate young members of the organization. An opportunity to have fun, i.e. to enjoy the pleasures of being part of a decision process. These ideas has a third alternative theory of decisions to view the outcome of the decision process as an artifact, something not as central to the making of a decision as could have been expected. Thus, decision making is seen as a context, in which one can develop and validate one's interpretation of life and one's part in life. An organization is, therefore, both a temple and a number of holy rituals, as well as a means for producing goods and services, (March, 1989). The rituals of decisions link routine doings to basic assumptions about the nature of things, i.e. of reality. They make sense. Thus, the third theory of decisions view decisions as a symbol, a way to make sense of the organization and its actions.

10.4 Hall of Fame Russel Ackoff and Henry Mintzberg

When considering great divide in research on the strategy process, few people today stand out more clearly than Henry Mintzberg and Russel Ackoff. Henry Mintzberg has consistently and along several paths struggled to clarify and educate us on the fallacies of (strategic) planning as well as tried to find new ways to organize and manage modern corporations. In doing so, Mintzberg has become a worldwide celebrity and management guru that has had a profound influence on the area of strategic management among others. With the death of people like Herbert Simon and H. Igor Ansoff with whom Mintzberg has had several widely published discussions over the years, Russell Ackoff today stands out as the last of the great stalwarts of traditional (strategic) planning. As Ansoff was portraited in chapter 4, it is natural for us to choose Ackoff for the Hall of Fame in this chapter, as Ackoff to this day advocates the virtues of planning based on a background in systems theory a discipline that Ackoff claims can handle the complexity of even modern and global organizations. Perhaps surprisingly, these two researchers from different sides of the great planning

divide agree on one thing the way we educate and train managers to fit into modern organizations is flawed and should be altered significantly. Henry Mintzberg Today, Henry Mintzberg is the Cleghorn Professor of Management Studies at McGill University in Montreal, Canada, where he has been affiliated for a number of years while visiting a number of other institutions through out the world, including London Business School. As a testimonial to his fame, Henry Mintzberg has been called a lot of things over his career - influential, innovative, iconoclast. Business magazine Fast Company even likened him to Mick Jagger believe it or not Mintzberg himself likes to present his careerand lifes work as an emergent process, butit is possible to identify several threads of issues that Mintzberg has worked on consistently for more than 40 years as a an academic (Mintzberg, 1993), most notably: Managerial work Forms of organizing Strategy formation Managerial work Before the oil-crisis of 1973/1974 shook the confidence of planners everywhere, a young Henry Mintzberg completed his Ph.D. on the managerial work of five managers, who Minztberg studied by close observation as a fine example of the value of detailed, case-driven research. Based on his findings, Mintzberg was since able to write and publish his book The Nature of Managerial Work (Mintzberg, 1973). Mintzbergs findings which have since been duplicated many times since were contra dictionary to the rational model of managerial decision making, as Mintzberg failed to find real life managerial problem formulation, analysis, formulation of alternative courses of action, informed choice of the best alternative and implementation. In fact what Mintzberg found was to him so different from not only the model of the Rational Economic Man (REM) of the 1950s but also to the idea of the manager as a satisfying man trying to live up to the idea of the rational economic man. To Mintzberg, REM was beyond repair and Mintzberg turned his attention to the importance of organizational politics as an important part of managerial work culminating with the book Power in and around organizations the years later (Mintzberg, 1983a). Forms of organizing As someone very good at structuring things into the right boxes, perhaps it should not be surprising that Mintzberg also was interested in organizational structures. In the 1970s, Mintzberg developed a coherent framework for describing different organizational configurations and became one of the largest influences of modern organization theory based contingency thinking. This included a framework for analysis as well as the proposal of a number of

archetypes of organizational structures originally five as in the practitioners book on the subject Structure in 5s (Mintzberg, 1983b) and since then supplemented with a number of other configurations which was a documented in the book The structuring of organizations (Mintzberg, 1979). Strategy formation Mintzberg himself readily admits that he has spent most of his adult life studying organizations, yet at the same time tried to escape from those organizations. This admittance to his personal distaste of being managed perhaps explains the outset of the next interest of Mintzberg strategy formation. At the very early outset, Mintzberg was intrigued by planning and the application of scientific method to strategy formation, as witnessed by the title of his very first academic paper The science of strategy making (Mintzberg, 1967) published as a doctoral student in 1967. At that time, Mintzberg was as taken in by Ansoffs A Concept of Corporate Strategy (Ansoff, 1965) with its heavy emphasis on strategic planning and Mintzberg even published a paper entitled A Framework for Strategic Planning, (Mintzberg, 1972). However, all of this was to change. Inspired by his work on what managers do in practice, Mintzberg began to question the virtues of strategic planning both empirically, e.g. (Mintzberg & Waters, 1982) and conceptually, e.g. (Mintzberg & Waters, 1985). The list of publications is long and culminated in Mintzbergs great attack on strategic planning in 1994, where Mintzberg at the time commented on and tried to create the (Rise and) Fall of Strategic Planning (Mintzberg, 1994). Russell Ackoff Russell Lincoln Ackoff (who was born in 1919) is still Anheuser-Busch Professor Emeritus of Management Science at the Wharton School, University of Pennsylvania. Ackoff is a pioneer in the field of operations research, systems thinking and management science and has had a profound influence on the way we think about strategy processes today. As in the case of Mintzberg, it is possible to identify several intertwined subjects that Ackoff has worked on, namely: Operations Research The nature of science Systems theory and planning Operations research Not surprisingly, Ackoff has enjoyed a distinguished career in Operations Research both as an academic and as a practitioner. His book Introduction to Operations Research, co-authored with West Churchman and Arnoff from 1957 appeared as a pioneering text that helped define the field. However, by the 1970s, Ackoff became critical of what he perceived as the technique-dominated Operations Research field, and advocated for more participative approaches. This started with his A Concept of Corporate Planning from 1970 parts of which deals with strategic planning. The criticisms of Ackoff towards the operations research area were mainly picked up in Britain, where they helped to stimulate the growth of problem structuring methods, such as Soft systems methodology from Peter Checkland and others.

The nature of science Much of Ackoffs work on the nature of science is based on his belief that a need to synthesize findings in the many disciplines of science arises because these disciplines have been developed with relatively unrelated conceptual systems. Scientific development has resulted in the grouping of phenomena into smaller and smaller classes, and in the creation of disciplines specializing in each. As disciplines multiply, each increases in depth and decreases in breadth. Collectively, however, the disciplines extend the breadth of scientific knowledge. Ackoff also advocates that the real world does not come to us in disciplinary form. Thus, scientific disciplines are the ways we study phenomena; they emerge from points of view, not from what is viewed. Systems theory and planning The two first subjects of Ackoffs work seems to flow together in what has been the bulk of his work his work on systems theory and planning. As early as 1972 Ackoff wrote a book with Frederick Edmund Emery about purposeful systems (Ackoff & Emery, 1992) which focused on the question how systems thinking relates to human behavior. Individual systems are purposive, Ackoff stated, and knowledge of aims of systems can only be gained by taking into account the mechanisms of social, cultural, and psychological systems. Ackoff also characterize dhuman systems as purposeful systems whose members are also purposeful individuals who intentionally and collectively formulate objectives and are parts of larger purposeful systems according to the definition: A purposeful system or individual is ideal-seeking if it chooses another objective that more closely approximates its ideal. An ideal-seeking system or individual is necessarily one that is purposeful, but not all purposeful entities seek ideals. The capability of seeking ideals may well be a characteristic that distinguishes man from anything he can make, including computers. Please note that if one change the word system with the word organization in the definitions above, Ackoff comes very close to resemble the tradition of Herbert Simon and others who tried to save the rational economic man from his downfall at the same time. Therefore, Russell Ackoff is firmly against what Henry Mintzberg has to say about the nature of managerial work and strategic planning and has tried to apply his systems thinking to the world of strategic management. Books such as Re-Creating the Corporation (Ackoff, 1999), The Democratic Corporation: A Radical Prescription for Recreating Corporate America and Rediscovering Success, (Ackoff, 1994) and Creating the Corporate Future (Ackoff, 1981) serve to illustrate Ackoffs undeterred belief in the application of systems theory to deal with the challenges of the strategy task. New ways to educate managers There is one area in which Ackoff and Mintzberg curiously agrees management education. Both agree that we need to change the way in which we educate the managers of the future, but their different proposals as to what is to be done serve to illustrate their basic differences yet again.

Management education, according to Mintzberg, should be given to those actually working as managers, as opposed to the current practice of training young students with no practical experience in management theory. "Leadership, like swimming, cannot be learned by reading about it," Mintzberg likes to say and he has made it his personal mission to reform the way mangers are educated with books such as Managers Not MBAs (Mintzberg, 2004) and Strategy Bites Back (Mintzberg, Ahlstrand & Lampel, 2005) to prove it. At McGill University, Mintzberg helped design the International Masters in Practicing Management that has now been running for over ten years and that seeks to expose practicing executives to new ways of thinking in series of international modules. Not surprisingly, Ackoff sees systems theory as the answer to redefining education of managers and argues that the complexity of modern organizations cannot be dealt with by analytical means. This is where systems theory comes in as a different methodo logical approach to managerial work. For instance, Ackoff has developed the term F-Law to describe each in a collection of subversive epigrams, (Ackoff & Addison, 2006), that expose the common flaws in both the practice of leadership and in the established beliefs that surround it. According to Ackoff f-LAWS are truths about organizations that we might wish to deny or ignore - simple and more reliable guides to managers' everyday behavior than the complex truths proposed by scientists, economists, sociologists, politicians and philosophers.

10.5 Rethinking strategic planning strategic thinking

Continuing along the lines of new approaches to the strategy process, we will devote special attention the more constructive aspects of Henry Mintbergs work on rethinking strategic planning. Afterall, it is Minzberg who has been instrumental and influential in helping shape the modern notions of the strategy process as more than just linear and rational. Furthermore, we will look at the work of James G. March, as he has, also, some interesting thoughts on the strategy process. 10.5.1 Mintzbergs Rethinking of Strategic Planning. Henry Mintzberg, who has contributed immensely to the descriptive research on (strategic) decision-making, has also proposed what he terms a rethinking of strategic planning. In light of the evidence on rationality, Mintzberg has proposed to alter much of the theory on the strategy process. Within this context, strategic planning is taken to be synonymous with traditional and rational approaches to strategy

Strategic plannings fall from grace. Regarding strategic planning, Mintzberg notes:... if the concept is not exactly dead, it has certainly fallen from its exalted pedestal..., (Mintzberg, 1994a, p. 12). This is due to three so-called fallacies of strategic planning. ! The fallacy of predetermination. To engage in planning, Mintzberg notes, an organization must be able to either control its environment, to predict its course, or simply to assume its stability. If this is not the case, it makes little sense to commit the organization to inflexible actions of a (strategic) plan. According to Mintzberg, as well as Starbuck earlier, the evidence on forecasting not encouraging:... the forecasting of discontinuities, such as technological innovations or price increases, is, according to Spiros Makridakis, a leading expert in the field, practically impossible..., (Mintzberg, 1994a, p. 16). Thus, the theory of strategy as planning assumes stability in the environment of firms. ! The fallacy of detachment. In much traditional strategy theory, the formulation of strategies is detached from its implementation, and a hierarchical division between strategic, tactical, and operational plans (and actions) are supposed. Mintzberg notes:... with all the necessary data packaged conveniently and delivered regularly, senior managers need never get off the pedestal that planning puts them on, nor need planners leave the comfort of their staff offices. Together they can formulate -work with their heads - so that all the other hands can then get on with the implementation..., (Mintzberg, 1994a, p. 16-17). But, according to Mintzberg, detached managers (together with abstracted planners) do not make bad strategies, they make no strategies at all ... ! The fallacy of formalization. The question within this context is whether a formal planning system can recreate the process of the genius entrepreneur by means of analytical tools for developing strategy? Mintzberg answers the question by:... the facts are ... that none of those fancy planning charts ever contained a single box that explained how strategy is actually to be created - how the synthesis of those genius entrepreneurs, or even ordinary competent strategists, is to be recreated..., (Mintzberg, 1994a, p. 18). In other words, strategic planning has more often ruined strategic thinking. Together, the three fallacies constitute:... plannings grand fallacy ... because analysis is not synthesis, strategic planning has never been strategy making ..., (Mintzberg, 1994a, p. 19), or, in other words, theory on strategic planning has not been based on the facts of managerial life. No amount of elaboration will ever enable formal procedures to forecast discontinuities, to inform detached managers, to create novel strategies. But, then what to do, Henry? Rethinking strategic planning: Mintzbergs suggestions. The diagnosis on the work discussed so far, much of Mintzberg's own, is clear: strategic planning (and planners) work around the actual making of strategies, see figure 10.3. In Mintzberg's own words, strategic planning:"... is a means to programme the consequences of strategies already created in other ways, notably through the vision of a leader or the learning of people who take actions...", (Mintzberg, 1994b, p. 22).

Inputs to the Process

Strategy Formation

Outputs of the Process

Support for the Process

Figure 10.3: Rational Planning works around the actual formation of strategies. Based on this diagnosis, Mintzberg proposes to base strategy-making on the empirical facts of strategy, i.e. let managers take full responsibility for formation of strategies (in an informal, non-rational manner) and assign new roles to planning and planners. Strategy formation. Mintzberg writes very little on this issue, perhaps because it thinks that irrational, creative, and intuitive strategy formation cannot be captured in any textbook. Still, he notes:"... When companies understand the difference between planning and strategic thinking, they can get back to what the strategy-making process should be: capturing what the manager learns from all sources (both the soft insights from his or her personal experiences and the experiences of others throughout the organization and the hard data from market research and the like) and then synthesizing that learning into a vision of the direction that the business should pursue...", (Mintzberg, 1994d, p. 107). New roles for rationality/plans and planners. Regarding "the planners", i.e. those staff-persons who, in Mintzberg's world, are responsible for strategic planning, he proposes a whole set of new roles, see figure 10.4. Mintzberg proposes two roles for plans and three for planners. This author has chosen to interpret this as a proposal for when and where to apply techniques of rational decision-making, i.e. analysis, commitment, and the like.
Plans as simulations Plans as controls Scrutinizing Strategies Strategic Analysis External Communication and Control

Strategy Formation
Finding Strategies Internal Communication and Control Elaborating and Converting Strategies

Figure 10.4: New roles for rational decision-making. [Adapted from (Mintzberg, 1994b)]. Figure 10.4 illustrates Mintzberg's proposals regarding rational decisions that:"... logically tale a position, not inside the strategy-making process ... so much as around it ... [planners] ... can feed into it, especially the results of formal analysis; they can purses its consequences, particularly by programming the

strategies it produces; and they can support it by adding and encouraging strategic thinking and strategic acting...", (Mintzberg, 1994b, p. 22). Let us take a look at those new roles for planners/rational decision-makers. Strategic programming. According to Mintzberg, strategic programming is carried out to elaborate and operationalize formally the consequences of the strategymaking process. This corresponds to the findings of Mintzberg's own McGill studies of strategy, as well as James B. Quinns research on logical incrementalism, that planning may be applied to codification, elaboration, and conversion of strategies: Codification means clarifying and expressing the strategies in terms sufficiently clear to render them formally operational, so that their consequences can be worked out in detail. In other words, planning is to make all the implicit assumptions explicit, consider all the major hurdles, make sure that everything is taken into account and that the inconsistencies and incoherencies are uncovered and eliminated:"... planning thus brings order to strategy, putting it into a form suitable for articulation to others in the organization...", (Mintzberg, 1994b, p.23). Elaboration mans decomposing the codified strategies into sub strategies, adhoc programmes of various kinds, and overall action plans, i.e. specifications of what has to be done to realize each strategy as intended. Conversion means considering the effects of the strategic changes on the operations of the organization. Here what Mintzberg calls a "great divide" has to be crossed, from the ad hoc world of strategies to the routine world of budgets and objectives. Objectives have to be restated and budgets reworked, and policies and standard operating procedures reconsidered, to take into account the consequences of the specific changes in action. One point needs to be emphasized regarding this role of rational planning of strategies:" ... strategic programming is not a 'one best way', or even a good way, except under specific circumstances. It makes sense when viable intended strategies are available, in other words when the world is expected to hold still or change predictably while these strategies can unfold, so that formulation can logically precede implementation... ", (Mintzberg, 1994b, p. 24). In other words, organizations do not always need clearly codified and elaborated strategies. Typically, only mature, bureaucratic organizations in mature industries, i.e. Mintzberg's "machine bureaucracy", need this kind of rational strategic planning. In other circumstances, strategic programming can do an organization harm by pre-empting the flexibility that may be needed to learn from an unpredictably and changing world. Communication media. If planning is programming, then plans may serve in two capacities: as media for communication and as devices for control. Both of these applications draw on the analytical character of plans, namely their representation of strategies in decomposed and articulated form. As such, plans can be excellent media to communicate not just strategic intentions but also what each subunit and individual in the organization must do to realize them. Communication can be external as well as internal, with plans being used not only to promote the efforts of insiders, but also to seek the tangible as well as moral support of influential outsiders. The latter means informing important outsiders, i.e. financiers, suppliers, government agencies, and so on, about the substance of plans so that they can help the organization to realize them. Plans as control devices go beyond informing people of intended strategy and its consequences, specifying what behaviors are expected of particular departments and individuals in order to realize strategy, and the serving as

simulations of a sort to feed back into the strategy formation process as comparisons of expectations with actual performance. Additionally, there exist a whole set of games played around the exercise of planning itself as a device for control: investors who expect planning from companies going to public financial markets, governments that demand it of the organizations they fund, and so on. Here it is not the results of planning as much as the organization's very engagement in the planning exercise that becomes the form of control, or the illusion of control. Finders of strategy. As Mintzberg has pointed out, see section 10.3, a strategy can be deliberate, i.e. consisting of the specific intentions of senior management that have been arrived at through formal, rational analysis and planning, and a strategy can be emergent, meaning that a pattern formed among different actions without conscious intention (of senior management at least). In other words, strategies can develop inadvertedly, often through a process of organizational learning, (Mintzberg, 1994b). The important lesson within this context is that deliberate strategies are not necessarily good and emergent ones bad, this should be evident from the discussions so far in this working paper. However, having made this conclusion, an important role of strategic planners becomes that of helping to find the emergent strategies of the firm, perhaps in the activities of the firm. In other words, planners can be "interpreters of action", (Mintzberg, 1994b). Regarding this role of planners, Mintzberg comments:"... the evidence of all careful research ... is that strategies, at least rich, successful ones, are not often forthcoming on silver platters, ready to be operationalized. ... Or else, in the truly complex, decentralized, 'learning' organization ... strategies may have to bubble up from below... (Mintzberg, 1994b, p. 25). This is where planners adept at soft analysis can come in: to find the results of such organizational learning, emerging patterns, so that they can be scrutinized for the benefit of the organization. Planners as analysts. Effective top managers, i.e. strategy formaters, have great knowledge of the pulse of their organization and its external context through access to soft data. However, as previously noted, managers lack the time and inclination to study hard data and carry out analyses of specific issues of (strategic) consequences on ad hoc basis. According to Mintzberg, someone has to do that as well as make sure that the consequences of such studies are considered in the strategy-making process and:"... planners are obvious candidates for this task; they have the inclination to do the analysis, the time it requires, and the predisposition to consider hard facts...", (Mintzberg, 1994b, p. 26). Planners can, thus, analyze hard data, drawing on whatever techniques that seem appropriate, and feed the results to managers on an ad hoc basis, as and when the need for hard data analyses arise - not as definitive recommendations as much as factors to be considered alongside others. Much of this kind of analysis will necessarily be "quick and dirty" as this is the time frame of strategic decisions/top managers. According to Mintzberg, much of such analysis will pertain to the market, i.e. the so popular "industry analyses", (Mintzberg, 94b), but internal analyses are important as well. Regarding internal analyses, Mintzberg discusses the possibility of making "simulations" of internal objects, e.g. the company's distribution system. This may be in the form of computer simulations, but also in the form of games, scenarios, and so on.

Strategic analysis can also involve the scrutinization of strategies, which is not just their "evaluation" which implies a somewhat formal and even quantitative process, but the assessment of their overall viability. This, of course, should pertain to all kinds of strategies, not just the formal ones. Planners as catalysts. Finally, planners have to encourage the strategy formation process, not in order to make it a formal planning exercise but to encourage whatever form of strategic behavior that fits the situation of the firm most naturally. Mintzberg notes that once planning as the "one best way" of making strategies is replaced by a broader conception, then the catalyst role can take on new significance:"... in my experience, the planners in some of the most effective planning departments have become the organizations' conceptual thinkers about strategy formation ... which means, of course, that they are sometimes critical of formal planning...", (Mintzberg, 1994b, p. 27). The role of catalyst may require using provocation to raise new issues for top management, or perhaps simply "whispering in the ear of the Gods", to paraphrase James Brian Quinn, building awareness about new options and gain support for changes. A few critical remarks on Mintzberg. Considering the time, energy, and skills that Henry Mintzberg has used on falsifying the notion of rational strategic decision making, i.e. planning, we cannot help but to find it a bit disappointed to study his proposals for "rethinking" strategic planning. One reason for disappointment is that his suggestions are not breaking with the past or, to quote H. Igor Ansoff:"... Henry will be disappointed if he consults one of a number of modern books and discovers that his ... framework for planning .... is a nave reinvention, not only of other existing schemes but also of what is practiced on many large successful firms...", (Ansoff, 1994, p. 31). Ansoff is somewhat right: the schools of strategic management have evolved from strategic (long range) planning until this day. This is his basic statement in the contribution quoted above and in another paper attacking Mintzberg, (Ansoff, 1991). However, in our view the "modern books" to which Ansoff refers can only be found in the latest schools on strategy, where authors make different assumptions regarding the rationality of strategic decision makers, about firms, about environments, and so on. Thus, much of the past work on strategy must be led to go in order to reconstruct the concept of strategy in a more realistic light. The work on perfectly rational (strategic) decisions is one example of contributions that we cannot apply directly if we have different assumptions regarding the strategy process. This does not mean, however, that we cannot learn from (some of) the earlier contributions, some of their ideas may well be applicable to boundedly or non rational (strategic) decision-making. Another point of disappointment for me is that Mintzberg make his proposals for "rethinking" around the black box of strategy formation. He does not attempt to open the black box of strategy formation, i.e. to find out how (strategic) decisions can be made under the assumptions of bounded rationality. Fortunately, this has been done by, among others, James G. March. 10.5.2 James G. March's "Technology of Foolishness". James G. March, another of the contributors to alternative descriptive theories for decision making, has also made a normative contribution: the technology of foolishness. With this contribution, March deeply penetrates how individuals should decisions, i.e. goes inside the black box of strategy formation so untouched by Mintzberg, see figure 10.

Starting-point: three ideas of rational decision-making. March's starting-point is that the assumptions of rationality has been an extremely successful hypothesis in terms of academic recognition, actually, March sees that idea as one of the foundations of Western Civilization and notes that a majority of theories within science today seems to believe what March calls the "creed of rational choice", (March, 1989). The creed goes something like this, (March, 1989): Human beings make choices. If done properly, choices are made by evaluating alternative solutions compared to established objectives on the basis of full information. The alternative, which thereby is concluded to be the most attractive, is chosen. The process of making choices can be improved by modern technology. Technology makes it possible to improve quality of both solution search, of information, and of the analyses, which go into the evaluation of alternatives. Even though empirical practice may not live up to this ideal, it is an attractive model for how persons, organizations, and social systems should make choices. This creed leads to three ideas of Western Civilization that March find questionable: Objectives are determined a priori to making a decision. The necessity of consistency between objectives and choices. Rationality is better than, for instance, creative or intuitive procedures. March's argumentation against the creed of rationality is based on what he calls "the problem of objectives", (March, 1989). The reasonable person is forced to have objectives, it is expected that the person make choices based on objectives, that objectives are internally consistent, and that there is consistency between objectives and choices. It is expected that a social system integrate individual objectives to one collective objective. The creed of rationality assumes that individuals, organizations, and social systems already have values and objectives. But where do these objectives come from? Furthermore, objectives change over time and the character of these changes affect the quality of human and societal development as well as the outcome of decision processes. Thus, a theory on choices must somehow justify why changes of objectives are not taken into consideration? March cites three classical justifications, (March, 1989). The first is that the development of objectives, and the making of choices, are two independent processes, both conceptually and behaviorally. The second is that the model of choice is never gone through in practice and that the deviations from the model actually excuses the problem of changing objectives. The third justification is that the idea of changing objectives is incomprehendable for any normative theory of decision-making. Regarding the former two justifications, March does not agree, while the latter is the very basis for his proposal of the technology of foolishness. The argument that development of objectives and making of choices are independent processes seems to be all wrong. When people make a choice, the process is just as much a matter of discovering new objectives, as a matter of acting in consistency with existing objectives. In other words, a theory which presupposes that objectives exist prior to choice must be wrong, see section 3 for "evidence" on such statements. The second argument that the rational model is incomplete is more convincing. There seems to be "wholes" in the system, which assumes rationality: there is incomplete information, inconsistent objectives, and a number of external processes affecting the development of objectives, most notably intuition and tradition. However, the problem with the second argument

is the disturbing fact that in turns the incompleteness of the rational model into a great strength: as we get better and better at handling the techniques of the model, the "wholes" get smaller. The third argument is perceived as misguiding by March, (March, 1989). The question, and starting-point for the technology of foolishness, is why don't we ask how persons establish "good" objectives rather than how they make "good" decisions? The technology of foolishness. The technology of foolishness investigates another viewpoint on the normative question of how decision makers should behave than the viewpoint that objectives are given in advance of choices. What if we choose to perceive making decisions as a way to generate interesting objectives at the same time, as we perceive objectives as a way of justifying choices/actions. In other words, persons and organizations need to do things that they have no reasons to do, i.e. to be "foolish". Not always, but sometimes decision makers should act, before they think. To be "foolish" implies asking which of the mistakes that I am about to make now will have desirable consequences for my values and objectives? The question is almost unthinkable: not only are we asked to predict the consequences of action on our values, we are also asked to evaluate them. In what sense can we talk about "good" changes of objectives? We are actually ask to either specify a set of objectives that we can use to evaluate alternative objectives - in which case we end back in the original, rational situation - or choose among alternatives now based on a set of values that we will have sometime in the future. This makes little sense as long as we accept the creed of rationality and the model of rational decisions. If we do not, it becomes very difficult to articulate the alternative model in the terms used in the rational model Instead, we will take a look at some of the prerequisites for technology of foolishness. Imitation, use of force, and hindsight/rationalization. As March as challenged the dogma of given objectives, he claims that we are forced to reconsider some of our deepest prejudices, that it is bad to imitate, use force, and hindsight/rationalization, as these prejudices is based on the idea of rationality in decision-making. Imitation is not necessarily a sign of a weak character, imitation contains the predication that if we imitate someone's actions and values, we will stand relatively good chances of discovering attractive new objectives. To make imitation more desirable, we need to know more about whom to imitate, e.g. in what situations should one imitate someone with values close to ones' own? Force or duress is not necessarily an attack on individual authonomity, it can also be a means for increasing individuality. This is something clearly recognized with dealing with children, but the dangers of manipulation and misuse of force are vast. What we need is a theory for when force will lead to actions that render new attractive objectives possible. Hindsight and rationalization are not necessarily a way to avoid moral evaluation; it can be a way to investigate the possibilities for changing values. When we miss good reasons for choosing between different actions, it can be sensible to develop some sort of definition of how close to the rational perspective that "irrational" actions are. There are many and well-known dangers of imitation, force, and hindsight, we should be able to develop better methods than those, (March, 1989). However, no matter what methods we develop in the future, it is almost certain that they will undermine the decision models based on assumptions of a priori objectives, consistency, and rationality. The methods will imply some sort of way to

comprehend present actions being taken according to a set of unknown, future values. Ways to have "reasonable fun". Another prerequisite for the technology of foolishness is some sort of way to temporarily cancel rational demands for consistency. Even though we know what foolish things we want to do, we still need a mechanism to make it possible for us to avoid the logic rational reason. But only for a while. To March, reasonable fun makes it possible to experiment, but with a recognition of reason, (March, 1989). The technology of foolishness accepts an obligation to, at some point, to either stop the game or to integrate it into the world of reason in a meaningful way. The rules are only temporarily cancelled. We believe that is a very important statement, alternative approaches must not ignore the need for decision-makers to actually make a decision every once in a while. There is a pragmatic need for not experimenting all the time, but to make decisions, commitments, and take actions, a need for applying rational decisions. Perhaps, what we need to recognize is that, in order to do so, some foolishness is needed in order to establish the objectives necessary and experiment with alternative paths. This is, to me, the true role of technology of foolishness, as it gives us very little chance of making decisions. Instead, we get the chance of experimenting with decisions, simulating decisions, and learning about decisions. But most people are deeply influenced by the rational dogma, so how to we cancel rationality for a while? March proposes five procedures for a start, (March, 1989): Treat objectives as hypotheses. Rational theory makes it possible to question everything but the main issue: our objectives. But what is we designed the decision process as a period of time, in which we could test different hypotheses about objectives. If we could experiment with alternative objectives, we may stand a good chance of discovering complex and attractive combinations of values that one of us would have imagined in advance. We can discuss intuition as real. We do not know what intuition is, perhaps it is even several things or maybe it is an excuse to do something that cannot be justified by means of present values and consistency. Maybe intuition is an unexplainable way take into consideration the dimensions of human sensibility that are not organized according to rationality. At nay rate, intuition allows us to see possible choices outside what can be justified rationally. We can treat hypocrisy as a passing stage. Hypocrisy is inconsistency between expressed values and actual behavior, and the attitudes against hypocrisy mainly stems from two sources: 1) antipati against inconsistency in general, and 2) ethical considerations, i.e. not provide sinners with an excuse. However, according to March, a bad person with good intentions can be a person experimenting on how to become a good person. Thus, it seems more reasonable to urge experiments than to insult experiments. We can treat memory as an enemy. The "rules" of consistency and rationality imply the ability to remember and in most case god memory leads to good decisions. However, the ability to forget may also be useful. If the decision maker does not know what she did yesterday, or what others in the organization to today, she can, at the same time, act within the rational system and do foolish things. We can treat experience as a theory. Since learning can be seen as a set of conclusions drawn based on concepts for action and consequences developed by ourselves, experience can be changed retrospectively. In other words, we can experiment with different versions of history and, thus, different starting-points for new, rational or not, decisions.

A few critical remarks on James March. Each of the five procedures temporarily cancels the rational system, they make fun and foolishness, (March, 1989). They make most sense in situations where the virtues of traditional rationality has been overemphasized and they represent a real break with rational decision-making theory. On the other hand, March's theory also implies a potentially dangerous use of powerful means best known from studies of behaviorally disorder than from studies of human growth. Consider the following implications of March's technology of foolishness. Reconsideration of the role of managerial decisions. The interpretation of the decisions being made in an organization is one of the most important sources of developing the organization's objectives. And a characteristic of "good" managerial decisions is that they lead to more interesting value-basis for the organization. Thus, decisions should no longer be seen as something deduced from a set of a priori objectives. Maybe decisions should also be seen as a way to introduce chaos into the prevailing attitude of the organization and its actions. A new view of planning. There are many virtues of planning, but a plan may be more effective as an interpretation of earlier decisions than as a program for future decisions. Planning can be used in the organization's struggle for a new consistent theory of itself and its objectives. Within this context, planning can be a learning device interpreting experiences into today's context and helps to evaluate values and objectives. Furthermore, this points towards a reinterpretation of the concept of evaluation, i.e. evaluation criteria need not be given in advance of the decision-making process. Acceptance of "having fun" in organization. In order for an organization to do experiments on objectives and values, the organization must support people who master and enjoy inconsistent behavior, i.e. to have fun. Organizations should, perhaps, temporarily cancel control, coordination, and communication, the old concepts of classical organization theory. In conclusion, we see James March's proposals as a genuine break with rational decision-theory and emphasize that technology of foolishness offer a few methods/procedures for creating changes when maintaining concepts such as choice-of-action, and so on. But, on the other side, March's technology of foolishness does need to be "managed" somehow, someone must decide when to be foolish and when to be rational. These are almost March's own words. It is my feeling that March, in contrast to Mintzberg, has not considered what is to "around" his way of making decisions, is it to be Mintzberg's "planners", a jester, or whatever?, when are experiments with values over?, what is enough in foolishness? These are some of the questions that the concluding section will probe into as I propose to combine the contributions of Mintzberg and March into one approach to making strategic decisions.

10.6 Conclusions
So what have we learned about the strategy process? 10.6.1 What does the evidence show us? Of course, no-one can claim to take an unbiased view of the evidence presented in this chapter unless one is perfectly rational. Still, this section has taught us, at least, three things. First, survey research does not seem to have produced any certain conclusions regarding the effects of formalized planning on profits, i.e. no support for the premises of strategic decisions within the second and third schools of strategy. This may have to do with the fact that survey research is not fit to investigate detailed processes of strategic decisions. Thus, the results of survey research cannot tell us much about strategic decisions. Case study research is better fit to investigate the object of strategic decisions and the evidence presented, results of formal research rather than anecdotal story-telling of former top managers, firmly indicates that the picture of managers as highly rational is not supported by factual evidence. Instead, the picture of strategic decision-makers is, at best, one of a boundedly rational human being who tends to forget information, fail to use available information, without consistent or explicit preferences, only consider a few (typical) solutions, only make partial analyses of alternatives, and make decisions based on very little. Third, even though much theoretizising on managerial decision-making has been based on assumptions of rationality, some alternative theories can be found. Such theories, discussed in section 10.4 and 10.5, are based on the descriptive research discussed in section 10.3, and draw a picture of decision-makers much similar to the boundedly rational assumption. This certainly points towards the need for alternative theories of (strategic) decision making - of which we have presented a few - and a new view of decision making in strategy theory. There is just one problem with this belief: the discussion of rationality is based on the belief that we can rationally prove that decisions are not rational... Otherwise, it would not have meaning to present evidence on rationality and discuss descriptive research versus normative research. In other words, this chapter has made us confused on a more abstract level than before. 10.6.2 What about the strategy process, then? What can we conclude on the strategy process, then? Well, as already indicated, the ideas of strategic planning and strategy as an emergent process are not a dualism but a paradox. In practice, they need to be integrated into whatever managerial activity that is conducted in the organization at the time.

Richard Lynch (Lynch, 2005) has made the most constructive contribution to the strategy process by formulating two approaches to the strategy process that need to be integrated, see figure 10.5.

Figure 10.5: Two approaches to the strategy process. The top process is what Lynch refers to as the normative process the planning process in which the activities of analysis, formulation of the strategy and the implementation of the strategy are assumed to be separate activities. Often this is not an option, hence Lynch has proposed a so-called emergent process that combines much of thinking of Mintzberg, March and others into a process model. In the bottom process, analysis is separated from formulation and implementation of the strategy. We shall discuss this later, for now it serves as a sufficient conclusion on the strategy process. 10.6.4 What about strategic management, then? Please note that we have said precious little about strategic management as a managerial activity in this chapter. This is deliberate, even though the conclusion that strategic management needs to include a lot of considerations on organizational change and change management seems fairly logical in light of the discussions in this chapter. However, there is a lot more to strategic as a managerial activity and we will look at this subject in its own right in chapter 12 of this book.

10.7 Case and end of chapter reflections

In chapter 6, section 6.6, we reviewed the history of the company Vestas, the worlds leading manufacturer of Wind Turbines for the creation of wind energy as part of our lessons from success. Please re-read that section if need be. Below, we will build on that section and specify the current strategic situation of Vestas

in order for you to consider what kind of strategy process, Vestas might need for its strategic management. 10.7.1 What is the industry, anyway? For Vestas, defining what industry it competes in is far from trivial. Vestas started out in alternative energy until a distinguishable wind-turbine industry emerged in the late 1970s. However, as wind-turbines become more and more efficient and prices for conventional energy rises the price if wind energy is fast approaches that of conventional energy. Thus seems to have he implication that windturbines become part of the energy industry a much larger and more mature industry with new competitors and a lot more at stake. The implications are staggering for instance, what is the market share of Vestas? In the wind-turbine industry Vestas is the market leader with a market share of about 30%. In the energy industry, Vestas will be a very small player indeed. Recently, in 2008, it seems as if Vestas CEO, Ditlev Engel, sees the future of Vestas as part of the energy industry rather than the wind-turbine industry. The current strategy of Vestas has the heading of Number One in Modern Energy, which seems to question the historical roots of the corporation and points firmly towards the future. 10.7.2 External challenges for Vestas Vestas and other vigilant organizations routinely apply the methods of external analysis, including scenario technique, to access their external challenges. For our purposes here, we will outline the most important themes in brief and leave out the external analysis: The energy industry is the subject of a lot of political attention these days, due to the fact that conventional energy sources seems to be running out and that oil prices are very important for the world economy and can be used to achieve national political aims. As always, politics is extremely volatile and Vestas needs to be on top of a large number of political issues in a large number of countries around the world. Competition is fierce in the energy industry both between traditional players and between traditional players and new-comers to the industry such as Vestas. This is an entirely new ball-game for Vestas and one that they need to consider very carefully in the years to come. Growth in energy consumption is large and constant on a worldwide basis albeit most of the growth happens in newly developed countries far from the Western world in which Vestas feels the most at home. The makes it necessary for Vestas to grow at the same rate and to consistently adjust its strategic position in the industry. Technological changes are also constant and challenging. The technology of windturbines is still evolving at a staggering pace in terms of size and timing. Thus, Vestas needs to developed and produce a new generation of wind-turbines every 5-6 years, which is rather fast. Furthermore, a wind-turbine is in itself a complex system of a large number of individual technologies of which each may also need to be changed radically for each generation of wind-turbines. This is where size comes into play. Each new generation of wind-turbines is significantly larger than the last generation making it necessary to change sub-technologies very often at a constant basis.

These and many other external challenges points towards a very dynamic and challenging situation of Vestas. None the less, many of the changes are quite predictable and could be both planned for and anticipated. 10.7.3 Internal challenges of Vestas By similar argument as in section 10.7.2, we will outline the most important themes in brief and leave out the internal analysis: Vestas needs to become a truly global corporation in its approach to different national cultures and in its ability to deal with international media and politics. This is a far cry from being a national and even small industrial company from a far corner of the world. The same goes for Vestas strategic scanning. It is no longer sufficient to know and look out for a few rather local and well-known competitors. In the future, Vestas needs to be able to comprehend the strategic situation in the industry and maneuver among corporate giants many time its own size. Vestas needs to grow and develop its organization at a staggering pace. For instance, Vestas needs to more than double its size in terms of employees over the next three years by adding 30.000 employees. Obviously, recruiting this many alone is a major challenge. As if recruiting enough people is not enough, Vestas also needs to put the many new people to work in productive ways. This points towards the need to develop the competencies of the organization under very challenging conditions. The image of replacing two out for engines on a Boing 747 while actually flying the plane comes to mind. At the same time, Vestas needs to create a new corporate culture fit to a global player in the energy industry. This is a very interesting challenges as it goes far beyond simply changing an existing culture. Due to the growth rates of Vestas, it may be argued that the organization does not actually have a consistent corporate culture at present. Too many new faces have been brought onboard and not learned the virtues of the old culture. But to build a new corporate culture while hiring very large numbers of new employees is certainly a challenge in itself. 10.7.4 Case questions and end of chapter reflections Now that you have a cursory view of the historical background (section 6.6) and strategic challenges of Vestas, please consider the following questions for reflection: How many of the challenges of Vestas evolve in predictable ways and how many are beyond predictability? How complex is the strategic situation at Vestas seen from a top management perspective low, medium or high? Overall, would you recommend Vestas to choose a normative (planned) strategy process or an emergent strategy process? Why? Given that the answer to question 3 above probably was a combination, what combination of the strategy schools of chapter 2 would you recommend to Vestas? Why?

10.8 Further reading

Ackoff, R. L., Creating the Corporate Future: plan or be planned for, John Wiley & Sons: New York, 1981

Ackoff, R. L., Ackoff's Fables: Irreverant Reflections Bureaucracy, John Wiley & Sons: New York, 1991

on

Business

and

Ackoff, R.L., The Democratic Corporation A Radical Prescription for Recreating Corporate America and Rediscovering Success, Oxford Univ. Press: New York, 1994 Ackoff, R.L., Re-Creating the Corporation: a design of organizations for the 21st century, Oxford Univ. Press: New York, 1999. Ackoff, R. L. & Gharajedaghi, J., Managing Chaos and Complexity: a Platform for Designing Business Architecture, Oxford Univ. Press: New York, 1999 Ansoff, H. I., Strategic Issue management, Strategic Management Journal, vol. 1, pp. 131-148, 1980 Ansoff, H. I., The Emerging Paradigm of Strategic Behavior, Strategic Management Journal, vol. 8, 1987 Ansoff, H. I. og Hayes, R. L., From Strategic Planning to Strategic Management, Wiley and Sons, 1976 Barnett, W. P. og Burgelman, R. A., Evolutionary perspectives on strategy, Strategic Management Journal, vol. 17, 1996 Barney, J., Types of Competition and the Theory of Strategy, Academy of Management Review, 11, 1986 Bass, B., Organizational Decision Making, Irwin, 1983 Beer, S. & Nohria, K., Cracking the Code of Change, Harvard Business Review, May-June, pp. 57-68, 2000 Bonn, I., Developing Strategic Thinking as a Core Competency, Management Decision, vol. 39, no. 1, pp. 23-40, 2001 Chia, R. & Tsoukas, H., On Organizational Becoming: Rethinking Organizational Change, Organizational Science, vol. 13, pp. 567-582, 2002 Cyert, R. M. og March, J. G., A Behavioral Theory of the Firm, Prentice-Hall, 1963 Dean, J. og Sharfman, M., Procedural rationality in the strategic decision-making process, Journal of Management Studies, Vol. 30, pp. 587-610, 1993 Edwards W., The Theory of Decision Making, Psychological Bulletin, 51, pp. 380-417. 1954. Eisenhardt, K. M. og Zbaracki, M. J., Strategic Decision Making, Strategic Management Journal, Vol. 13, pp. 17-37, 1992 Eisenhardt, K.M. & Sull, D.N., Strategy as simple rules Harvard Business Review, January-February, pp. 107-116, 2001

Fredrickson, J. W., The comprehensiveness of strategic decision processes: Extension, observations, future directions, Academy of Management Journal, Vol. 27, pp. 445-466, 1984 Fredrickson, J. W. og Mitchell, T. R., Strategic decision processes: Comprehensiveness and performance in an industry with an unstable environment, Administrative Science Quarterly, Vol 27, pp. 399-423, 1984 Graetz, F., Strategic Thinking versus Strategic Planning Towards understanding the complementarities. Management Decision, vol. 40, issue 5/6, pp. 456-462, 2000 Heijden, K. van der, Bradfield, R., Burt, G., Cairns, G., and Wright, G., The sixth sense, John Wiley & Sons, 2002 Heracleous, L., Strategic Thinking or Strategic Planning?, Long Range Planning, vo. 31, no. 3, pp. 481-487, 1998 Hussey, D., Creative Strategic Thinking and Analytical Process: Critical Factors for Strategic Success, Strategic Change, vol. 10, no. 4, pp. 201-213, 2001 Killing, P. & Malnight, T., Must Win Battles, IMD perspectives for Managers, no. 106, pp. 1-4, 2004 Kotter, J. P. Leading Change: Why Transformation efforts fail, Harvard Business Review, March-April, pp. 24-38, 1995 March, J., Exploration and Exploitation in Organizational Learning, Organization Science, vol 2 nr. 1, 1991 March, J. G. og J. P. Olsen, Ambiguity Universitetsforlaget Bergen, 1976 and Choice in Organizations,

March, J. G. og H. A. Simon, Organizations, Wiley og Sons, 1958 Markides, C., "Strategy as Balance: From "Either-Or" to "And"." Business Strategy Review, vol. 12, no. 3, Autumn, pp. 1-10, 2001 Mintzberg, H., The science of strategy-making, Industrial Management Review, Spring, 1967 Mintzberg, H., The Nature of Managerial Work, Harper & Row, 1973 Mintzberg, H. The structuring of organizations, Prentice Hall, 1979 Mintzberg, H. Power in and around organizations, Prentice Hall, 1983a Mintzberg, H. Structure in 5s, Prentice Hall, 1983b Mintzberg, H. & Waters, J., Tracking strategy in an entrepreneurial firm, Academy of Management Journal, no. 3, 1983 Mintzberg, H. & Waters, J., Of strategies, deliberate and emergent, Strategic Management Journal, 1985

Mintzberg, H., Crafting Strategy, Harvard Business Review, July-August, 1987a, pp. 402-420 Mintzberg, H., The Strategy Concept I: Five Ps For Strategy, California Management Review, Fall 1987b, pp. 11-24 Mintzberg, H., Rise and Fall of Strategic Planning, Prentice Hall International, 1994 Mintzberg, H., Ahlstrand, B. & Lampel, J., Strategy Safari, Prentice Hall, 1998 Mintzberg, H. Managers, not MBAs, Prentice Hall, 2004 Mintzberg, H., Ahlstrand, B. & Lampel, J., Strategy Bites Back, Prentice Hall, 2005 Mintzberg, H. and Lampel, J., Reflecting on the Strategy Process, Sloan Management Review, Spring Issue, pp. 21-30, 1999 Liedtka, J.M., Linking Strategic Thinking with Strategic Planning, Strategy and Leadership, vol. 26, no. 4, 30-35, 1998 Quinn, J. B., Intelligent Enterprise, The Free Press, 1992 Quinn, J. B., Strategic Goals: Process and Politics, Sloan Management Review, Fall, pp. 21-37, 1977 Quinn, J. B., Strategic Change: Logical Incrementalism, Sloan Management Review, Fall, pp. 7-21, 1978 Quinn, J. B., Strategies for Change: Logical Incrementalism, Irwin, 1980a Quinn, J. B., Managing Strategic Change, Sloan Management Review, Summer, pp. 3-20, 1980b Quinn, J. B., Managing Strategies Incrementally, The International Journal of Management Science, pp. 613-627, 1982 Simon, H. A., Administrative Behaviour, Wiley, 1957 Simon, H.A., Models of Man, John Wiley, 1957 Simon, H.A., The New Science of Management Decision, Harper og Row, 1960 Starbuck, W. H., Strategizing in the Real World, International Journal of Technology Management, vol. 8, no. 1/2, 1993. Stopford , J. M. and Baden-Fuller, C., Corporate Rejuvenation, Journal of Management Studies, vol. 27, no. 4 July, pp. 399-415, 1990