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Readings StrategyChapter 1
The opening reading, ‘Complexity: The Nature of Real World Problems’, is the first chapter of
Richard Mason and Ian Mitroff’s classic book, Challenging Strategic Planning Assumptions. This
extract has been selected for this chapter to serve as an introduction to the complex nature of the
strategic problems addressed in this book. Mason and Mitroff’s main argument is that most strategic
problems facing organizations are not ‘tame’ – that is, they are not simple problems that can be
separated and reduced to a few variables and relationships, and then quickly solved. Strategic
problems are usually ‘wicked’: are faced with situations of organized complexity in which problems
are complicated and interconnected, there is much uncertainty and ambiguity, and they must deal
with opposing views and conflicting interests. Therefore, strategic problems have no clearly
identifiable correct solutions, but must be tackled by debating the alternatives and selecting the most
promising option. Mason and Mitroff call on strategists to systematically doubt the value of all
available solutions and to employ dialectics – which is exactly the approach taken in this book. In the
context of this chapter, the most important message that Mason and Mitroff have is that the variety
of opinions might make things more complex, but is also a useful resource for finding better quality
solutions.
The second reading is a 2005 Organizational Science article by Wendy Smith and Michael Tushman:
‘Managing Strategic Contradictions’. The original article combines insights on several strategy topics
in this book, such as strategic innovation, strategizing and strategic leadership; however, its main
purpose in this chapter is to discuss why strategists should engage in managing strategic
contradictions. The authors, both from Harvard Business School, represent the philosophy of this
book well.
The last reading, ‘Cultural Constraints in Management Theories’ by Geert Hofstede, has been
selected to sow seeds of further doubt about the universal validity of strategic management theories.
Hofstede is one of the most prominent cross-cultural researchers in the field of management and is
known, in particular, for his five dimensions for measuring cultural traits. In this reading he briefly
describes the major characteristics of management in Germany, Japan, France, Holland, South-East
Asia, Africa, Russia and China, contrasting them all to the United States, to drive home his point that
management practices differ from country to country depending on the local culture. Each national
style is based on cultural characteristics that differ sharply around the world. Hofstede argues that
theories are formulated within these national cultural contexts, and thus reflect the local demands
and predispositions. Therefore, he concludes that universal management theories do not exist – each
theory is culturally constrained. If Hofstede is right, this re-emphasizes the necessity to view strategic
management and strategy theories from an international perspective. Readers must judge which
strategy approach is best suited to the national circumstances with which they are confronted.
, Chapter 2
So, how should managers engage in strategic reasoning processes and how should they encourage
fruitful strategic reasoning within their organizations? Should strategizing managers primarily take an
analytic or holistic reasoning perspective? Should strategists train themselves to follow procedural
rationality – rigorously analysing problems using scientific methods and calculating the optimal
course of action? Or should strategists unleash the unconscious and make judgements based on
intuition? In the strategic management literature the debate has not yet offered a clear-cut answer
to the question of which strategic reasoning approach is the optimal one. At the centre of the
strategic reasoning issue is the paradox of logic and intuition. Many points of view have been put
forward on how to reconcile these opposing demands, but as circumstances differ, individual
strategists have to find their own way of dealing with the topic of strategizing. To help strategists
come to grips with the variety of perspectives on this issue, three readings have been selected that
each shed their own light on the issue.
As outlined in Chapter 1, the first two readings will be representative of the two poles in this debate
(see Table 2.1). The third reading addresses a more integrative style of strategizing. Selecting the first
reading to represent the analytical reasoning perspective was not very difficult. In a 2007 Strategic
Management Journal article, ‘Explicating Dynamic Capabilities: The nature and microfoundations of
(sustainable) enterprise performance’, David Teece explains the microeconomics of the dynamic
capabilities perspective, which currently enjoys the attention of most strategy scholars. While in
Chapter 4 on business level strategy the contents of this perspective will be discussed, this chapter
addresses the microfoundations of dynamic capabilities thinking. The microfoundations of the
dynamic capabilities view are in line with many – but not all – important scholars in the strategy field,
as Teece points out. True to the rational reasoning perspective, Teece argues that “sensing, seizing
and reconfiguring” should be conducted consciously, explicitly and rationally. In his view, strategic
reasoning is a “logical activity”.
The second reading in this chapter is the 2007 Academy of Management Review article ‘Exploring
Intuition and its Role in Managerial Decision Making’ by Erik Dane and Michael G. Pratt. Their
definition of intuition (“affectively charged judgments that arise through rapid, non-conscious and
holistic associations”, p. 40) has become widely accepted by scholars in organizational behaviour. The
article is probably the best scientifically developed overview on what intellective scientists are not
supposed to do: make judgemental intuitive decisions. The authors incorporate the role of domain
knowledge, implicit and explicit learning, and task characteristics on intuition effectiveness in
managerial decisions. They also explore the applications of intuition on managerial decision making.
The third reading is a 2011 Strategic Management Journal article, ‘Psychological Foundations of
Dynamic Capabilities: Reflexion and reflection in strategic management’ by Gerard P. Hodgkinson
and Mark P. Healey. The authors build on Teece’s ‘sensing, seizing and reconfiguring’ distinction, but
they challenge his microfoundations and incorporate the academic knowledge in neuroscience and
psychology on intuition in managerial decision making (as explicated in Dane and Pratt’s article). They
argue that a strategist’s thought processes are basically intuitive and reflexive rather than rational
and reflective. In their view, strategies originate in insights that are beyond the reach of conscious
analysis. They do not dismiss logic as unnecessary, but note that it is insufficient for arriving at
innovative strategies and for getting organizational members’ buy-in
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