Mintzberg's 5Ps of Strategy

Started reading Strategy Safari as per my July reading plan. The book gives an overview different schools of thought on strategy formation. Over the next few days, I plan to summarize the main tenets and the critique of the same for each school of thought. As the authors claim, the book is a field review as opposed to a literature review.

The word strategy is so influential, yet when you ask someone to define strategy, the answer varies. Explicit definition of the same could help in better understanding of this complex topic. Here are the 5 definitions that Mintzberg offer:

1. Strategy is a Plan: Strategy can be defined as a direction, a guide or a course of action to get from here to there.
2. Strategy is a Pattern: Here strategy is defined as consistency in behavior over time (a company that perpetually markets the most expensive products in its industry pursues a high-end strategy).
Strategy as a pattern is looking at past behavior, whereas strategy as a plan is looking ahead.
3. Strategy is a Position: This way the strategy is described as locating particular products in particular markets (McDonald's Egg McMuffin for the breakfast market).
4. Strategy is a Perspective: Here the strategy is defined as an organization's fundamental way of doing things (The HP way, for example).
Strategy as a position looks down to the spot where the product meets the customer, as well as out-to the external market place. As perspective, in contrast, the strategy looks in-inside the organization, but it also looks up-to the grand vision of the organization. Changing position within a perspective may be easy; changing perspective, even while maintaining the position is not.
5. Strategy is a Ploy: Here the strategy is defined as a specific "maneuver" intended to outwit an opponent or a competitor.

Organizations develop plans for their future and they also evolve patterns out of their past. Mintzberg call the former intended strategy and the latter as realized strategy. Further, intentions that are fully realized are called deliberate strategies and those that are not realized are called unrealized strategies. More often than not, a pattern is realized which was not expressly intended. This is called emergent strategy. Hardly strategies are purely deliberate, just as few are purely emergent. One means no learning, the other means no control. All real-world strategies need to mix these in some way: to exercise control while fostering learning. Emergent strategies are not necessarily bad and deliberate strategies good. What is needed is the ability to predict as well as the need to react to unexpected events.

We will now look at a framework developed by Richard Rumlet for evaluating alternative strategies. It is described in a series of tests:

Consistency:The strategy must not present mutually inconsistent goals and policies.
Consonance:The strategy must represent an adaptive response to the external environment and to the critical changes occurring within it.
Advantage:The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected area of activity.
Feasibility: The strategy must neither overtax available resources nor create unsolvable subproblems
We shall now look into the advantages and disadvantages of the strategy:

1. Strategy sets direction, but can also serve as a set of blinders to hide potential dangers.
2. Strategy focuses efforts, there may be no peripheral vision and can become heavily embedded into the fabric of the organization.
3. Strategy defines the organization, but defining it too sharply results in the rich complexity of the system being lost.
4. Strategy provides consistency, but could hinder creativity.

Mintzberg has identified 10 different schools of thought on strategy formulation and implementation. We will explore them one by one. In the next part, I'll summarize the methodology of the Design School.


Thank you very much,
RamP!