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1. SCHOOLS OF
THOUGHT

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INTRODUCTION
Therearemanyperspectivesontheformationofstrategywhich
havebeenevolvedoveraperiodoftime.
Severalauthorshaveprovidedvariousopinionsaboutstrategy
formulationandcontributedintheformulationofstrategyin
numerousways.
HenryMintzbergandhisassociatesaretheonefromwhose
perspectivesthesethoughtshavebeendeveloped.
Mintzbergisaglobally-acclaimedacademicianandauthoron
businessandmanagement.
Hismodeldescribeseachschoolinstrategicperspectiveand
providesacriticalviewpoint.
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HENRY MINTZBERG
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SCHOOLS OF THOUGHT
Aschoolofthoughtreferstoadoctrine(setofbeliefs),afeeling,an
intellectualtraditioncollectivelydrawnbyagroupofpeoplewho
sharecommonopinion.
Instrategicmanagement,theTenSchoolsofThoughtmodelby
HenryMintzbergisaframeworkthatexplainsapproachesof
definingastrategy.
Itcanbeintheformof:
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THE
PRESCRIPTIV
E SCHOOLS
THE
DESCRIPTIVE
SCHOOLS
THE
INTEGRATIVE
SCHOOL

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THE PRESCRIPTIVE
SCHOOLS
THE
DESCRIPTIVE
SCHOOLS
THE INTEGRATIVE
SCHOOL
1.Design school 1.Entrepreneurial
school
1. Configuration school
2.Planning school 2. Cognitive school
3. Positioning school3. Learning school
4. Power school
5. Cultural school
6. Environmental
process school
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THE DESIGN SCHOOL (Process of
conception)
Thisschoolperceivesstrategyformationasaprocessofconception
developedinlate1950’sand1960’s.
Clearanduniquestrategiesareformulated.
Strengthsandweaknessesofacompanyaremapped,alongwith
opportunitiesandthreatsinordertoformulateastrategy.
Therefore,strategyisafitbetweeninternalcapabilitiesandexternal
potentials.ThismainlydepictstheSWOTanalysisofacompany.
TheCEOisastrategistwhodevelopsstrategyandcontrolsexecution.
Strategiesbecomesuccessfulwhenprocessofstrategyformulationis
keptsimpleandformalbasedonCEO’sjudgementandthinking.
Thisworkswellinastableenvironment,wherecompetitorsmightnot
disruptthemarketsuddenly&itgivestimetothefirmtoadapt.
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
Simplification may distort reality.
High risk of resistance
Weak in fast changing environment.
This promotes inflexibility.
Under design schools thought formulation of strategy gets
separated from implementation of strategy which detaches
thinking from acting.
BASIS OF FORMULATION
Strategy is typically formulated by taking SWOT analysis as a
base.
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THE PLANNING SCHOOL ( Formal Process)
This school perceives strategy formation as a formal process developed
in 1960’s.
Strategy is seen as a plan divided into sub strategies.
The strategy formulation is played by the planners.
The thought process runs towards planning the entire strategy in a
rigorous manner, so that the firm advances forward.
The complete process and the plan which the company implements is
documented from the start to finish.
At all times the plan is referred to whenever the management wants to
take new decisions.
In planning school thought of strategy the plan is given more
importance whenever the management wants to take new decisions.
With the plan in hand, the management gets a clear direction to move
ahead, helping the company to move forward steadily.
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
Can become too static
Criticality arises when something happens out of plan. This
typically happens when plans are made years in advance, and
changes takes place either in the industry or in the organization.
When an internal or external variable changes, then the complete
plan gets affected. Hence, proper prediction is most essential
when using the planning school of thought.
BASIS OF FORMULATION
Strategy is typically formulated by takingScenario Planning as a
base.
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THE POSITIONING SCHOOL (Analytical
Process)
Thisschoolperceivesstrategyformationasaanalyticalprocess
developedinlate1970’sand1980’s.
Theentirefocusisoncontentofstrategyinordertopositionthe
firminthemarketbyanalyzingthecompetitionandindustryin
whichtheyareoperating.
Themanagementoffirmsdecidethattheywanttopositionthe
productatthetopofthemindandmakedecisionsaccordingly.
Inthiscasethefirmsneedtodeterminethecompetitionalready
presentinthemarket,andhowtopositionitself.
ThestrategyformulationisplayedbytheAnalyst.
Oncethemarketisanalyzed,therightstrategycanbeappliedto
improvethepositioningoffirm’sproduct.
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Competition and a competitive position are analysed
on the basis of economic concepts.
Companies must choose one out of the three generic
strategies:
cost-leadership
differentiation or
focus (niche market).
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
In the positioning school of thought, the strategy assumes that the
market will remain as it is, and it does not take into consideration
new entrants or change in business environment.
Like the planning strategy, the positioning school of thought can
also fail if there are major changes in the business environment.
BASIS OF FORMULATION
Strategy is typically formulated by taking Five Force Model,
Value chain and BCG matrix as a base.
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THE ENTREPRENEURIAL SCHOOL
(Visionary Process)
Thisschoolperceivesstrategyformationasavisionaryprocess
developedinlate1950’s.
TheentrepreneurialschoolfocusesontheCEO’svisionasthe
keydeterminantofstrategy.Theleaderhasparticular
perspective,asenseoflong-termdirection,avisionofthe
organization'sfuture.
Theprocessofstrategyformationoccursinaratherunconscious
way.Itisdeeprootedintheexperienceoftheleader.Theleader
promotesthevisionbymaintainingclosepersonalcontrolofthe
implementationinordertobeabletoreformulatespecificaspects
asandwhennecessary.
Theorganizationrespondstoleader'sdirectives.
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Example :
Entrepreneurial school are examples in small businesses which
want to make it large, or even large corporations which trust their
leaders such as Apple Incemployees trusted Steve jobs, and
The trust enjoyed by Mark Zuckerberg from his employees is
explicit. The entrepreneurial school organizations follow whatever
the CEO says.
Leadership pipeline models and situational leadership model are
best tools to keep searching for good leadership in organizations.
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
The problem with this management school of thought is only one
question: Where to find a mature, experienced, talented and
honest leader?
If organization designs its strategies based on the
recommendations by the leader of the company, the leader has to
be a visionary and the one who takes responsibilities of success
as well as failure of strategies.
BASIS OF FORMULATION
Strategy is typically formulated by taking Leadership styles as a
base.
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THE COGNITIVE SCHOOL (Mental Process)
Thisschoolperceivesstrategyformationasamentalprocess
developedinlate1940’sand1950’s.
Underthisschoolofthought,organizationsgivelotofimportance
topeople’sperceptionandtheirbehavior.
OneofthebestexamplesofcognitivestudiesistheJohari
window.Wherein,organizationscandobetterbusinessby
understandingoftheiremployees,suppliersandcustomers.
Customer’sperceptionsmatterandtherefore,theirinformation
processingshouldbegivenathought.Thisiswherecorporate
communicationplaysanimportantrole.
Oncetheorganizationknowswhattheircustomersdemandand
wantsendingtherightsignalsbecomeseasyforthem.
Thestrategyformulationisplayedbythethinkersand
philosophers.
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EXAMPLE
Even Howard-Sheth buyer behavior model is a good example of
the cognitive school of thought.
It attempts to explain the rationality of choice of the product by the
consumer under conditions of incomplete information and
reduced processing capability.
It analyses the external symptoms of behavior, reactions and
thought processes that cannot be subject to direct observation.
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
The problem with the cognitive model is that it is not practical
beyond a certain point. A top company cannot rely on surveys and
marketing research reports alone to find new ideas or to make
connections with their customers.
Fact is that every day some new product get introduced in the
market and keeping a tab on each movement in market is not
possible in the cognitive school of thought.
BASIS OF FORMULATION
Strategy is typically formulated by taking Johari Window and
Howard-Shethbuyer behavior model as a base.
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THE LEARNING SCHOOL (Emergent
Process)
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Thisschoolperceivesstrategyformationasanemergent
processdevelopedfromthe1950’s,throughthe1990s.
Organizationswhichfollowthisthoughtprocess,dependaloton
theirexperiencesandmarkethappenings.
Organizationsfollowinglearningschoolmodelmakestrategies
lookingatthepast;notnecessarilytheirownpast.Theytake
cuesfromstrategiesinmarketwhichbecamesuccessfulor
failed.
Organizationsfollowingthisschoolofthoughtlookatthingsthat
workedinmarketandtrytoimplementthesamethingovertime
withtheassumptionthatitwillworkagain.Suchorganizations
discardstrategiesthatdidnotworkforothers.
Thestrategyformulationisplayedbylearnerswithinthe
organisations.

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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
Itisnotadvisabletodependondecisionsofpastbecausechange
isconstantinthemarket.
Thisstrategycanbeusedwhenthefirmisstable,andwantsto
workonautomodewhileitdevelopssomethingelseinthe
meantime.
BASIS OF FORMULATION
Strategy is typically formulated by Learning Organization and
Knowledge Management as a base.
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THE POWER SCHOOL (Negotiation Process)
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Thisschoolperceivesstrategyformationasanegotiation
processdevelopedduring1970sand1980s.
Thisschoolofthoughtispowercentered.Thepeoplewhoarein
powertakethedecisions.
Thepowercenterscanbecustomers,suppliers,worker’sunions
orleadersintheorganization.
Thepowerschoolviewsdesigningstrategyasapoliticalprocess
fornegotiating,formingalliancesandpromotingone’sown
interests.Strategyformationisshapedbyusingpowerand
politics.
Anyonewhoisknowntohavepoweroverthecompanydrivesthe
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Strategymakinginthisschoolismessyconsistingof
conflict,aggressionandcooperation.
Thestrongestmembersofanorganizationarebrought
intopositionsofleadership.Politicscanensurethatall
sidesofanissuearefullydebated,whereastheother
systemsofinfluencemaypromoteonlyone.
Thestrategyformulationisplayedbyanypersonin
powerwhohasastakeintheorganisation.
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
Theproblemwiththepowerschoolhappenswhenthepowerful
peoplestoplisteningtofeedbackfromothersandstop
implementingmeasuresofimprovement,andonlyfocusonminor
improvements.
Atsuchtimes,thepowerneedstochangehandssothatthe
companykeepsmovingforward.
BASIS OF FORMULATION
Strategy is typically formulated by Social Power and Power
distance as a base.
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THE CULTURAL SCHOOL (Collective process)
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Thisschoolperceivesstrategyformationasacollective
processdevelopedinthe1960s.
Theculturalschoolofthoughtsaysthathumancapitalismost
importantinorganizations.
Apositivecultureinthefirmharnessesinnovationsand
entrepreneurialcultureinorganizations.
Undertheculturalschool,strategyformationbecomessubjectto
acompany’suniquevaluesandsubjectiveperspectivesand
stylesofdecision-making.
Strategyformationisaprocessofsocialinteractionwhichis
basedonthebeliefsandunderstandingssharedbythemembers
ofanorganization.

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Strategytakestheformofperspective,rootedin
collectiveintentions.
Theculturalschoolbelievesininvolvingasmany
departmentspossiblewithinacompany.
Thisbecomesveryusefulduringmergersand
acquisitions.
Culturalschoolorganizationsemphasizestheroleof
socialvalues,beliefsandcultureindecisionmaking.
Thestrategyformulationisplayedbycollectivism
displayedwithintheorganisation.
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
Itisdifficulttounitepeopleinorganizations,thereareseveral
groupswithvarietyofideologies.
Togetthepeopleinorganizationunited,herculeaneffortsare
requiredanddirectionremainsunclear.
Differentculturalandideologicalperspectivesamongpeopleinthe
firmdonotencouragestrategicchange.
BASIS OF FORMULATION
Strategyistypicallyformulatedbytakingculturaldimensionsas
abase.
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THE ENVIRONMENTAL SCHOOL
(Reactive process)
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Thisschoolperceivesstrategyformationasareactiveprocess
developedinthelate1960sand1970s.
Thestrategyisanoutcomeofreactionstothechangesin
environment.Therefore,thisschoolismoreofsituation-related,
placinghighestemphasisonenvironment.
Situationalanalysisisthemostusedtoolintheenvironmental
school.
Thisthoughtprocessisusedwhenthereistotaldependenceon
environmentalfactors.
Strategyformulationisplayedbyenvironmentasthemain
entity.

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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
Underthisschoolofthought,processentirelydependsonthe
environmentwhichconstantlychanges.
Itisdifficultfororganizationstokeepchangingtheirstrategies
constantly.
BASIS OF FORMULATION
StrategyistypicallyformulatedbytakingSituationalLeadership
asabase.
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THE CONFIGURATION SCHOOL
(Transformation process)
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Thisschoolperceivesstrategyformationasatransformation
processdevelopedinthelate.
Thebasicpremiseinthisschoolisthatthestrategyneedstobe
configured.
Oneofthemostpreferredamongstthe10Schoolofthoughts
Theconfigurationschoolattemptstofindacombinationofall
aspectsofthenineotherstrategyschools.
Aspertheconfigurationschool,strategycannotbederivedfrom
simplestatisticaldataandvalues,orfromasimplesetofvalues.
Since,organizationsundergocyclesofstablephases,disturbed
phasesandtransitionalphases,thereisaneedtoperiodically
recognizetheneedfortransformationandmanagetheprocessof
transformationeffectively.

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Therefore,strategyshouldequipthefirmtoadopta
particularstructurewhichmatchestoaparticulartype
ofcontext.
Hence,dependingonthetimeandorganisational
context,theprocessofstrategymakingcanbe
conceptualdesigningorformalplanning,
systematicanalysisorleadershipvisioning,
cooperativelearningorcompetitivepoliticking,
focusingonindividualcognition,collectivesocialization,
orsimpleresponsetotheforcesoftheenvironment.
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CRITICAL VIEW & BASIS OF FORMULATION
CRITICAL VIEW
Thisschoolofthoughttriestoattainstabilityviavariousways,and
keepstransformingaslongasneeded.
Duringstability,strategyemergesfromwithinthefirm,whileduring
periodsoftransition,managementandconsultantsformthe
strategy.
However,theclarityofdistinctionbetweenphasesofstabilityand
transitionphasesisanissueinthisschool.
BASIS OF FORMULATION
StrategyistypicallyformulatedbytakingDisruptiveInnovations
asabase.
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