1

Masters Programmes

Assignment Cover Sheet

Submitted by: <1356301 >

Date Sent: 31.03.2014

Module Title: Strategy In Practice

Module Code: IB92U0

Date/Year of Module: 2013/2014

Submission Deadline: 31.03.2014

Word Count: 2989 words

Number of Pages: 26

Question: What are the common tools and techniques of strategizing and organizing
and how are these used in practice?

This is to certify that the work I am submitting is my own. All external references and
sources are clearly acknowledged and identified within the contents. I am aware of the
University of Warwick regulation concerning plagiarism and collusion.
No substantial part(s) of the work submitted here has also been submitted by me in
other assessments for accredited courses of study, and I acknowledge that if this has
been done an appropriate reduction in the mark I might otherwise have received will be
made.
2
Content:

1. INTRODUCTION..5

2. CLASSIFICATION OF COMMON TOOLS BASED ON USE AND
SATISFATION.7

3. COMMON TOOLS IN DIFFERENT SETTINGS..8

4. APPLICATION OF COMMON TOOLS IN PRACTICE11
4.1 STRATEGIC MANAGEMENT FRAMEWORK12
4.2 GENERIC MODES OF TOOL APPLICATION....14

4.3. CONTEXTUAL CONDITIONS AND BRICOLAGE19
5. CONCLUSIONS.24


References25









3
List of Figures and Tables:

Figure 1: Classification of tools based on use and satisfaction
Figure 2: Organizational/Environmental/Individual Factors affecting tool usage
Figure 3: Strategic Management Framework
Figure 4: Dimensions of the Analytical mode

Figure 5: Dimensions of the Dynamic mode
Figure 6: Dimensions of the Metaphorical mode
Figure 7: Dimensions of the Facilitative mode
Figure 8: Dimensions of the Interventionist mode
Figure 9: Applications of Strategy tools in Contextual conditions
Figure 10: Dissociation of Strategy Theory in Practice













4







What are the common tools and techniques of
strategizing and organizing and how are these used
in practice?











5
1: INTRODUCTION

Strategy tools refer to the full range of ideas, concepts, approaches and
techniques that influence strategic activity (Knott, 2006, pp. 1090--1105). They
form a critical part of the 3P framework as they relate to the practices that
tacticians utilize while strategizing for the organization (Paroutis and
Heracleous et al., 2013). Currently, managers draw upon numerous strategic
tools to support rational processes of decisionmaking in the organization
(Kaplan and Jarzabkowski, 2006, pp. 9-12). It is very critical to recognize that
Strategy activity is different from other management activities in various
aspects. It is not only more unique, creative, non-programmable and non-
routine, but also more ambiguous, complex and uncertain than various
management activities (Johnson and Scholes et al., 2011). Tools assist
managers in undertaking strategic activity by provide structuring context and
framework for action in uncertain conditions (Clark, 1997, pp. 417--427). From
the practice viewpoint, it is crucial to not only recognize the common tools
used by practitioners but also to understand how they are applied while
undertaking strategy activity (Whittington, 1996, pp. 731735). This approach
will allow us to understand how various actors engage with different strategy
tools to mediate organizing and strategizing processes.
In the present business context, strategic tools and techniques form a key
component of typical MBA programmes and continue to be adopted in
practitioner-oriented strategy literature (Hill and Jones, 2013). They provide
critical insights into strategy by presenting information in a systemized way
(Hussey, 1997, pp. 97--115). According to Webster et al (1989) tools can raise
the level of strategic thinking in organizations and make the strategic planning
process more effective. Some authors like Vinzant and Vinzant (1996) have
emphasized that strategic tools are the cornerstones of strategic management.
In order to understand what are the common tools of strategizing and
organizing and how they are used in practice, one must first analyze the
effects of various environmental and organizational settings on tool usage,
then adopt a practice-based approach to understand how strategic actors
6
engage with these knowledge artifacts (Jarzabkowski and Wilson, 2006, pp.
348--367) in practice, and finally understand the relevance of strategic tools to
practitioners.
2: CLASSIFICATION OF COMMON TOOLS BASED ON USE
AND SATISFACTION
In order to understand which common strategic tools managers use for
strategizing and organizing, one must divide all the strategic tools into four
distinct categories based on usage and the satisfaction (Rigby and Bilodeau,
2007, pp. 9--16).















Figure 1: Classification of tools based on use and satisfaction (Rigby and Bilodeau,
2007, pp. 9--16)
As depicted by the above diagram, strategic tools can be categorized into
Rudimentary, Specialty, Blunt and Power tools based on usage and
satisfaction. Rudimentary tools like Consumer Ethnography are usually the
underdeveloped and new tools. Strategists draw upon these tools to adapt to
changing trends but they rank relatively low in satisfaction due to incorrect
Rudimentary
Tools
Consumer
Ethnography

Low Satisfaction High






L
o
w

















U
s
a
g
e




















H
i
g
h

Blunt Tools
Knowledge
Management
Power Tools
Strategic Planning
CRM
Specialty Tools
Mergers and
Acquisitions

7
usage. Specialty tools like Mergers and Acquisitions serve a functional niche
and are highly effective when employed appropriately (Paroutis and
Heracleous et al., 2013). On the other hand, blunt tools like knowledge
management are used extensively by practitioners, but fail to be effective due
to poor implementation (Rigby and Bilodeau, 2007, pp. 9--16). Power Tools
like Customer Relationship Management and Strategic Planning are the most
important tools for practitioners as they have a proven track record of use and
satisfaction (Paroutis and Heracleous et al., 2013). These techniques form the
most valuable components of every companys toolkit as the firm seeks grow
profitably. It is vital for every company to recognize which tool is applicable for
which situation. The failure to recognize the apt tool could lead to high
dissatisfaction even if the tool is used extensively. (Rigby and Bilodeau, 2013,
pp. 8-12).













8
3: COMMON TOOLS IN DIFFERENT
ORGANISATIONAL/ENVIRONMENTAL/ INDIVIDUAL SETTING
In order to establish a deeper understanding of the common tools used for
strategizing and organizing, one must critically analyze the different
organizational and environmental settings in which managers operate. The
number and kind of strategy tools adopted by practitioners for strategizing and
organizing depends on crucial factors such as environmental trends, industry
type, individual background and geographical region.

Figure 2: Organizational/Environmental/Individual Factors affecting tool usage
Firstly, the environmental trends play a crucial role in determining the
common tools and techniques applied by practitioners. The types of tools
strategists use significantly change over time with the change in business
environment (Rigby and Bilodeau, 2005, pp. 4--12). In 1993, the five most
popular techniques were Customer satisfaction, Vision and mission
statements, Total Quality Management, Competitor profiling and Pay-for-
performance (Rigby, 2001). By 2007, there was a sharpened customer focus
with companies understanding the value of acting on customer insights and
managing customers to foster brand loyalty. To keep in line with the changing
Factors
affecting
tool
usage
Environental
Trends
Industry
Type
Geographical
region
Education
Backgroud
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environmental trends, managers used tools like Customer relationship,
Customer segmentation and Core Competency tools more extensively (Rigby
and Bilodeau, 2007, pp. 9--16). Further, it is critical to understand that in the
20
th
century, organizations considered innovation more important than cost
cutting for long-term success. This shifting of priority led to an increase in use
of tools such as Knowledge Management and Scenario planning, to help the
companies prepare for both the opportunities and risks of globalization (Rigby
and Bilodeau, 2007, pp. 9--16). It is critical for practitioners to apply tools,
which are not only relevant in the present context but also help them adapt to
the changing business environment.
Another factor that significantly affects the quantity and type of tools practiced
by managers is the type of industry in which the organizations operate. The
technology, media, utilities and manufacturing companies use more tools than
not for profit organizations (NFP) and financial services (Jarzabkowski and
Oliveira et al., 2009). This trend can be justified by the difference in nature of
competitive environment and the contrasting dynamics of the sectors.
However, the reasons underpinning the higher level of tool use by companies
in various sectors may be different. For instance, the highly regulated utilities
firms use more strategy tools to create transparency by presenting strategic
information appropriately to stakeholders. On the other hand, the high level of
tool usage in technology firms can be attributed to the emergent nature of
business models and dynamism in the sector (Jarzabkowski and Oliveira et
al., 2009). It is vital to recognize that managers in different industries have
distinctive needs and they would apply different tools to accomplish their
goals. For instance, the NFP organizations use PESTLE analysis extensively
as they are highly impacted by changes in policy/legislation and
environmental issues. The lower use of Porters 5 forces in NFPs indicates
their greater focus on internal resources rather than external resources, to
provide services and gain advantage with funders. On the other hand the
manufacturing sector extensively uses value chain analysis to evaluate
inbound and outbound logistics for cost cutting purposes. (Jarzabkowski and
Oliveira et al., 2009).
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The third factor that affects tool usage by managers is the educational and
professional background of managers. To highlight the common tools used by
managers, one must move away from a rational, normative approach to more
humanistic approach. Academically trained managers, who have been
educated in business schools are heavily reliant on theoretical frameworks
such as McKinsey 7 S, value chain and Porters 5 forces (Gunn and Williams,
2007, pp. 201--216). Even though tools like resource capability analysis and
Scenario planning are applied by organizations in a very practical way, they
are most widely used by actors who are drawn from academia or have a
strong academic background. On the other hand, Professionally or Apply
Trained managers, who have years of professional experience tend to use
practical and holistic tools such as benchmarking, SWOT and Balanced
Scorecard (Gunn and Williams, 2007, pp. 201--216). In general, the greater
the level of education and management training an individual has, the more
strategy tools he will use for strategizing and organizing (Jarzabkowski and
Oliveira et al., 2009).
Lastly, the geographical region plays a vital role in establishing the kind of tool
usage adopted by managers. European managers show their commitment
towards customers and focus on the long-term picture by regularly applying
tools such as Customer segmentation and Strategic planning (Rigby and
Bilodeau, 2007, pp. 9--16). Unsurprisingly, Asian practitioners apply more of
newer tools like Consumer Ethnography and Corporate blogs due to the
strong economic growth and large number of early adopters in Asia (Rigby
and Bilodeau, 2005, pp. 4--12). As a result of employee morale and
productivity being crucial in North America, most firms widely use employee
centric tools like Employee Engagement (Rigby and Bilodeau, 2013, pp. 8-12).
Thus, the geographical region has a significant impact on the type of tools
used by the managers for strategizing and organizing.




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4: APPLICATION OF COMMON TOOLS IN PRACTICE

Most of the existing studies on strategy tools focus on the portfolio of strategy
tools and their classifications of usage based on different organizational
settings (Paroutis and Heracleous et al., 2013). By adopting a more
behavioral, humanistic and interpretivist approach to the study of strategy,
one can focus on the micro-level analysis, which is grounded in the behavior
and actions of individuals and groups. With the emergence of Strategy-as-
perspective approach, it is critical to view the practice-inspired approaches to
understand how various actors apply strategy tools in mediating organizing
and strategizing processes (Kaplan and Jarzabkowski, 2006, pp. 9-12). This
practice perspective will allow us to focus on micro-level activities and
understand how strategists strategize or how managers do strategy with the
help of tools and techniques, which are either learnt in high profile MBA
programmes or created by the actors themselves (Whittington, 1996, pp. 731-
-735).











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4.1: STRATEGIC MANAGEMENT FRAMEWORK
The Strategic management (SM) framework can provide an effective way to
explore how tools and techniques are employed in practice (Clark, 1997, pp.
417--427). Through this framework, one can understand how in practice,
managers apply large set of tools as a support role by linking them to specific
strategic tasks. In order to analyze how practitioners apply various tools
throughout the process, it is critical to understand the SM framework.















Figure 3: Strategic Management Framework (Clark, 1997, pp. 417--427)
In practice, managers use traditional common tools such as SWOT analysis,
PESTLE analysis, focus groups and critical success factors to analyze both
the operating environment and internal resources of the organization (Phase
1). For strategic analysis, managers extensively use spreadsheet modeling
Phase 1
Situation assessment
Phase 2
Strategic analysis
Phase 3
Strategic
Implementation
Evaluation of current
strategic position and
identification of strategic
issues through
organizational and
environmental analysis
Involves identifying and
selecting the best strategy
for the future.

To facilitate the
implementation of chosen
strategy

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and cost-benefit analysis in addition to the traditional SWOT (Clark, 1997, pp.
417--427). The critical observation to make in the final phase is not the
importance given to budgeting but the absence of SWOT analysis. One can
conclude that in practice, the traditional tool SWOT plays a crucial role in
formulating strategy rather than implementing strategy (Clark, 1997, pp. 417--
427). Further it is critical to recognize, that in practice managers adopt an
integrative approach by applying a wide variety of financial, behavioral,
marketing, research and technological tools for each strategic task. Managers
apply general tools like SWOT and Focus groups for a wide variety of tasks,
while specific technical tools like spreadsheet modeling are applied only for a
specific type of analysis (Clark, 1997, pp. 417--427). In general, practitioners
prefer to adopt basic common tools like SWOT analysis rather than complex
approaches like McKinsey 7 S framework (Gunn and Williams, 2007, pp.
201--216).













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4.2: GENERIC MODES OF TOOL APPLICATION

Knott (2006) argues that in practice, managers apply tools and techniques
according to strategic problem needs. He believes that by analyzing various
dimensions that represent the diversity of functions and characteristics
involved in tool usage, one can understand how individuals and small groups
apply strategy tools in practice. The dimensions that will help us view
strategy-tools from a practice-based perspective are tool use, application,
thinking and output (Knott, 2006, pp. 1090--1105).
Based on the inherent relationship between the characteristics of these
dimensions, managers use five generic application modes to mediate
strategizing and organizing activities. These modes put an emphasis on the
importance and centrality of user adaption of tools (Paroutis and Heracleous
et al., 2013).

Figure 4: Dimensions of the Analytical mode (Knott, 2006, pp. 1090--1105)
In the Analytical mode, managers view tools as a technique to look into
details of a specific aspect of a problem , and seek to generate a static output
by using a defined method (Knott, 2006, pp. 1090--1105). The application is
more tool-centered as the tool determines the scope and perspective, and
15
allows prescription for general guidance. This mode fosters focused thinking
as the manager looks into specific aspects of the problem and uses multiple
techniques of analysis, to look into different aspects of the same problem.
Under this mode, managers employ tools such as real option analysis and 5-
force analysis for a supportive role to back decision-making rather than
specifying a particular action (Knott, 2008, pp. 26--31).


Figure 5: Dimensions of the Dynamic mode (Knott, 2006, pp. 1090--1105)
In the dynamic mode, managers employ tools to align strategic decisions with
future conditions by making assumptions about the future environment (Knott,
2006, pp. 1090--1105). The application of tools is more need-centered as the
usage is heuristic in nature and involves significant interpretation by the
practitioner. The managers look for explanatory output to provide a rational
justification for expecting future events. Under this mode, tools like the
industry life cycle and dynamic capabilities framework are used to act as an
aid to decision making rather than a substitute (Knott, 2006, pp. 1090--1105).



16


Figure 6: Dimensions of the Metaphorical mode (Knott, 2006, pp. 1090--1105)
In Metaphorical applications, tools like analogical reasoning in unusual
conditions (radically innovative ventures or highly unstable environments) to
generate fresh thinking about a situation when analytical understanding is not
possible (Paroutis and Heracleous et al., 2013). The value of metaphorical
applications lies in the dynamic output, which is facilitative in an environment
of complexity, lack of data and uncertainty. Under this mode, managers draw
upon tools to foster creative, out of the box and divergent thinking that helps
attain experiential knowledge (Knott, 2006, pp. 1090--1105).



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Figure 7: Dimensions of the Facilitative mode (Knott, 2006, pp. 1090--1105)
To encourage creativity, structure communication and adopt a future-oriented
approach, managers use the facilitative mode of application (Paroutis and
Heracleous et al., 2013). Techniques such as SWOT, TOWS and scenario
planning are applied in a tool-centered approach, to inspire expansive thinking
about future strategies (Knott, 2008, pp. 26--31). The value gained from such
an application relates to the understanding gained by the strategist. Thus, the
managers seek output in the form of explanations relating to clarifying ideas,
issues and strategies (Knott, 2006, pp. 1090--1105). This will help them in
subsequent analysis before the decision-making process. Thus, in this mode,
tools are used in a facilitative role to collaborate and communicate rather than
to perform analysis or make decisions.


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Figure 8: Dimensions of the Interventionist mode (Knott, 2006, pp. 1090--1105)
In this mode, the practitioners use tools as a catalyst for change or a blueprint
for action rather than an input to decision making (Paroutis and Heracleous et
al., 2013). Common tools that lend themselves to interventionist application
are total quality management, benchmarking and balanced scorecard (Knott,
2006, pp. 1090--1105). It is critical for managers to recognize the various
institutional implications of this mode such as organization wide adoption and
substantial commitment of resources. Here, the managers use tools more like
an approach to apply a set of interconnected concepts and techniques for
managing a particular aspect (Knott, 2006, pp. 1090--1105).









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4.3: CONTEXTUAL CONDITIONS AND BRICOLAGE

Theoretical strategic knowledge, derived from economic and organization
theory, is simplified into knowledge artifacts such as tools, techniques and
frameworks (Jarzabkowski and Wilson, 2006, pp. 348--367). Practitioners use
these artifacts to apply strategy knowledge in action and guide the decision-
making process. The purpose of strategy knowledge is to provide a set of
tools and techniques that assist managers to undertake well-considered
strategic actions.
In the present context, organizations operate in a knowledge economy, which
is characterized by deregulation, globalization, increased rates of innovation
and technological diffusion (Paroutis and Heracleous et al., 2013).
Jarzabkowski and Wilson (2006) suggest that two contextual conditions affect
the way in which managers apply tools and techniques in the knowledge
economy. The first condition, Environmental Velocity, characterizes the
industry structure and can be identified through the speed, dynamism,
complexity and turbulence of the environment. The second condition,
Knowledge Intensity, characterizes firm behavior and can be identified by
input measures, such as Research and Development and output measures,
such as patents and product innovations.


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Figure 9: Applications of Strategy tools in Contextual conditions (Jarzabkowski and
Wilson, 2006, pp. 348--367)
The above diagram provides a design of how practitioners employ various
strategy knowledge artifacts, derived from different strategy theories,
consistently with the contextual conditions of the firms. This helps them to
simplify complex situations and provide organizations with stability. For
instance, in a hypercompetitive industry, which is characterized by high
environmental velocity and knowledge intensity, managers will adopt tools like
7S Disruption, simple rules fast decisions and various other tools that drive
flexibility, speed and innovation (Jarzabkowski and Wilson, 2006, pp. 348--
367). Thus, in practice, strategists adopt tools in accordance with the
contextual conditions of the firm to help build sustainable competitive
advantage in the knowledge economy.
One cannot invalidate managers, who consider contextual conditions while
applying the knowledge artifacts. However, at the same time, by adopting a
more practice-oriented approach one can greater insight into the role of tools
in negotiating the contextual conditions. The contextual conditions act as an
objective reality and provide the mangers a prescription to act in that reality,
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but a change in these conditions could cause the knowledge artifacts to fail to
deliver their desired objective (Jarzabkowski and Wilson, 2006, pp. 348--367).
It is important to investigate whether the use of tools by practitioners is
consistent with the theoretical purpose of the tools. The practice epistemology
helps us understand how in practice, the knowledge artifacts are dissociated
from their theoretical bases (Jarzabkowski and Wilson, 2006, pp. 348--367).











Figure 10: Dissociation of Strategy theory in Practice (Jarzabkowski and Wilson,
2006, pp. 348--367)
It is critical to understand that in practice, the use of tools and frameworks,
derived from strategy theory, is more complex than a direct application. Figure
10 depicts the dissociation process that occurs when practitioners in their
everyday practice of strategy adapt artifacts differently from what the
academics perceive them in theory. From the practice perspective, the
practitioners move away from the unidirectional application of tools and
fashion them according to situational demands, in order to make real-time
Knowledge Artifacts
Tools, Techniques and
frameworks arising
from theory
Use by practitioners
Bricolage: Adaptive,
creative, everyday
practice of strategy


DISSOCIATION
Adaption of
artifacts through
use in practice
22
judgments (Jarzabkowski and Wilson, 2006, pp. 348--367). In the process of
strategizing and organizing, the managers have little concern for theoretical
origins and make innovative use of knowledge by adapting existing artifacts
to their own use. This practical adaption of tools to satisfy managers own
ends without any particular regard for the theoretical purpose of the tool is
defined as Bricolage (Certeau, 1984). It is critical to understand that
Bricolage does not constitute deviance from or ignorance about the proper
application of the tool. On the contrary, it is a more pragmatic approach that
involves a high level of practitioner skill and helps the strategists deal with
uncertainty and ambiguity about future strategy.
It is vital to recognize Bricolage as a part of everyday reflexivity and creativity
of practice rather than an unusual or rare behavior. Chesley and Wenger
(1999) give an appropriate example of Bricolage by depicting how the
balanced scorecard was implemented in the public agency National
Reconnaissance Office. The model was adapted to fit the organizational
context as innovation and learning was changed to customer satisfaction,
indicating that the customers were the most important stakeholders for the
public organization. The concept of financial management was expanded to
include budgeting as the organization had to meet a budget rather than make
a profit. The managers tactfully applied the theoretical tool to provide a
language to discuss strategy and drive organizational change. It is critical to
understand that the adaption of a tool to foster strategic conversation and
drive change, rather than to serve a methodical diagnostic purpose does not
make it less actionable (Jarzabkowski and Wilson, 2006, pp. 348--367).
Academics focus on the theory behind each tool, while the strategists are
more concerned with the application of these artifacts in the practical world.
This does not imply that prescriptive and direct uses of tools do not or should
not occur in practice. Some practitioners do sought the contextual and
theoretical use of tools to guide decision-making, but most of them creatively
modify them to meet their desired purpose.
Even though many authors have questioned the use of traditional tools in the
knowledge economy, strategists continue to use established artifacts, such as
Porters 5 forces, as they have linguistic, technical and cultural legitimacy
23
(Campbell, 1997). Since traditional tools are robust, its technical legitimacy
cannot be questioned before use. Further, these tools get cultural acceptance
as are widely disseminated in strategy textbooks, MBA courses and media.
Linguistically, these tools are easily recognizable and understandable, which
makes it easier for purposes of mutual intelligibility. Thus, the old strategy
tools, which are theoretically presumed to be less useful in dynamic
contextual conditions, continue to be regularly applied in practice
(Jarzabkowski and Wilson, 2006, pp. 348--367).


24
5: CONCLUSION
Various environmental, organizational and individual settings affect the
common tools adopted by practitioners for strategizing and organizing. There
is no set of common tools that can be applied by a strategist, as relevant tools
must be adopted in accordance with the strategic need, business context and
intent of use. In practice, the application of strategy tools goes way beyond
direct application and is more of a complicated, dynamic phenomenon. The
use of strategy tools cannot be pinned down to one purpose, as strategists
employ tools for facilitative, supportive, communicative, analytical and
decision-making purposes. A practice-oriented approach emphasizes that
less attention should be paid to the kind of tools used and more to the actual
use of tools, and the adaptions made to the tools by the strategic actors when
dealing with strategic issues. Such an approach has implications for tool
originators, communicators and managers. For tool originators, such as
authors, it is important to specify how managers could modify tools without
comprising on the underlying theoretical concepts. The tool communicators
(teachers of MBA programs) must encourage students to reflect on creative
adaption of tools. Lastly, the managers must be flexible and focus on
reinventing tools to fit specific purposes (Knott, 2008, pp. 26--31).
It is important for strategists to understand that Tool is a means to an end, not
an end itself (Knott, 2006, pp. 1090--1105). They must recognize the
strengths and weaknesses of every tool to combine it with the right tools in the
right way at the right time. The organizations must support this by putting in
place a rational system for integrating, selecting and implementing tools. To
successfully implement a strategic tool, an organization must ensure a strong
top-down support and make the tool implementation a major initiative rather
than a limited effort. A strategy tool will only assist strategic activity rather than
providing a substitute for capabilities or experience of the manager. It is not
correct for theoretical tools to dictate management actions but it is time for
result-oriented managers to control their business by creatively and actively
managing strategic tools.

25
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