This essay seeks to identify the advantages and disadvantages of both schools of strategic management and come to a conclusion as to why using both schools of strategic management in conjunction with each other will lead to an improvement in an organisations performance.
Discuss the advantages and disadvantages of
using prescriptive and emergent strategies?
According to Johnson et al (2014, p.3) strategy is defined as “the long-term direction of an
organisation”. The formation of strategies is said to be described in two schools. The first
school is prescriptive which describes the approach to strategy as a comprehensive step-by-
step process whereby an organisation has defined objectives and goals reached through
analysing the environment which is then implemented. The second school is emergent
which is categorised as a strategy whose objective is ambiguous in nature and developed
through the course of its firm’s existence. The philosophy behind this is that strategy
development is difficult to anticipate due to the turbulence levels and complexity of the
environment (Perrot 2008). Thus, this essay seeks to identity the advantages and
disadvantages of both schools of strategic management and come to a conclusion as to why
using both schools of strategic management in conjunction with each other will lead to an
improvement in an organisations performance.
A Prescriptive approach is seen as a more viable option to many organisations. Maritz et al.
(2011) found that companies still plan ahead which implies that strategic planning is
important. A good strategic plan allows management in organisations to understand what
resources are required to make further development in acquiring these resources to achieve
their goals (Ansoff 1988 cited by Andersen 2000). However, a major downfall of the
prescriptive approach to strategy is that it assumes the future is predictable when in fact the
environment is unstable and uncertain. Conversely, according to Ansoff and McDonnel
(1990 cited in Lynch 2012) when assessing the dynamics of an environment, the forces
driving strategic directions will be based upon the industry they are in. Different industries
could have a turbulence level ranging from 1-5; indicating when turbulence is low,
predictability of the future is possible, compared to far more unpredictability when
turbulence is high. Hart( 1992) also states that organisations that operate in stable
environments are most likely to adopt a prescriptive approach to strategy. The funeral
services industry is an example of a mature stable industry (Valueline 2018) as it is expected
, to grow to 2.85bn in 2019 from 2.05bn in 2014. Growth rates are driven by rising death
rates, personalisation, and conditions of the economy overall (Mintel 2014).
Another disadvantage of this model is that it fails to complement today’s organisational
cultures and runs on a top-down approach where employees at lower levels are not
included in decision making process (Quin 1980 cited by Johnson et al. 2014). As a result,
the creativity amongst employees in an organisation can be limited, meaning they will not
be able to use their innovative nature to enhance organisations ability when responding to a
problem or an opportunity. Creativity to innovate and take the lead in markets can be
stifled. An example of this is Kodak. When the company employees put together the first
digital camera to present to Kodak’s board of directors, the idea of going digital did not
astonish them as they believed in purposing their company around photographic film. As a
result of not paving the way for new technology Kodak filed for chapter 11 bankruptcy.
(Usborne 2012)
However, Cheng et al. (2010) further states that organisations that play a part in aspects of
national culture, for example organisations in the public sector, are more conducive to a
prescriptive approach whereby organisations leaders runs on a top-down approach. The
NHS is a prime example of an organisation that embraces strategic planning by
implementing 5-year strategic plans that can help guide the organisation to adapt to the
changes in the health care sector and continue to provide patients with high quality care.
(NHS 2017). This has a positive effect of the organisation in managing its reputation.
The emergent approach is based on an organisations ability to continuously learn the
emergent activities in the environment (Mintzberg and Waters 1985). A strategy that is
emergent in nature is said to initiate positive, transformational decision making and
recognises that it is the market and external environment that lead the evolutionary process
to corporate strategy (Leitner 2014). An example of this is when Marconi, a British
telecommunications company, decided to not explore the idea of an outdated analogue
system to a more digital system of the UK telecommunications network. BT was then
approached by Huawei a Chinese company:
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