STRATEGY SAFARI A GUIDED TOURTHROUGH THE WILDS OF STRATEGIC MANAGEMENT HENRY MINTZBERG BRUCE AHLSTRAND JOSEPH LAMPEL THE FREE PRESS NEW YORK >aJ&aiz. u.frmiu/i « * „.;i••/ • >- •.»• . • ••• ••a/itiktSii^i THE FREE PRESS A Division of Simon & Schuster Inc. 1230 Avenue of the Americas New York, NY 10020 Copyright © 1998 by Henry Mintzberg, Ltd., Bruce Ahlstrand, and Joseph Lampel All rights reserved, including the right of reproduction in whole or in part in any form. THE FREE PRESS and colophon are trademarks of Simon & Schuster Inc. Designed by Carla Bolte Manufactured in the United States of America 10 9 8 7 6 5 4 Permissions acknowledgments appear on pages 393-395. Library of Congress Cataloging-in-Publication Data Mintzberg, Henry. Strategy safari: a guided tour through the wilds of strategic management / Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel. p. cm. Includes bibliographical references and index. 1. Strategic planning. I. Ahlstrand, Bruce W. II. Lampel, Joseph. III. Title. HD30.28.M564 1998 658.4'012—dc21 98-9694 CIP ISBN 0-684 -84743-4 (hardcover) There are some people who begin the Zoo at the beginning, called WAYIN, and walk as quickly as they can past every cage until they come to the one called WAYOUT, but the nicest people go straight to the animal they love the most, and stay there. —A. A. Milne, in the Introduction to Winnie-The-Pooh We dedicate this book to such people who are more interested in open fields than closed cages. CONTENTS Embarkation ix 1 "And Over Here, Ladies and Gentlemen: The Strategic Management Beast" 1 2 The Design School 23 Strategy Formation as a Process of Conception 3 The Planning School 47 Strategy Formation as a Formal Process 4 The Positioning School 81 Strategy Formation as an Analytical Process 5 The Entrepreneurial School 123 Strategy Formation as a Visionary Process 6 The Cognitive School 149 Strategy Formation as a Mental Process 7 The Learning School 175 Strategy Formation as an Emergent Process 8 The Power School 233 Strategy Formation as a Process of Negotiation 9 The Cultural School 263 Strategy Formation as a Collective Process 10 The Environmental School 285 Strategy Formation as a Reactive Process I I The Configuration School 301 Strategy Formation as a Process of Transformation 12 "Hang On, Ladies and Gentlemen, You Have Yet to Meet the Whole Beast" 349 References 375 Index 397 EMBARKATION T his trip began with a paper by Henry called "Strategy Formation: Schools of Thought," published by Jim Fredrickson in a collec- tion entitled Perspectives on Strategic Management (HarperCollins, 1990). Bruce used the paper in a course at Trent University and found that it worked well. "Why don't you do a book on it?" he suggested. "Why don't we do it together?" Henry replied. They both thought that Joe would make an excellent member of the team. So the safari was launched. We did not, however, write this as a textbook or some sort of academ- ic treatise. From the outset, we believed that the book should have as much relevance for managers and consultants in practice as students and professors in the clasroom. So we set out to write an easily accessible ex- planation of the fascinating field of strategic management. Sure, some parts may appeal more to practitioners, while others may be more of in- terest to the academically inclined. This is in the nature of the beast. We did not set out to domesticate it but to make it friendly. We wanted read- ers from everywhere to join our safari. But at the same time we want to challenge you. We take risks and hope that they will invigorate you. For as we argue throughout, the field of strategic management needs to be opened up, not closed down; it needs reconciliation among its many dif- ferent tendencies, not the isolation of each. To enrich the experience of this safari, we hope to follow up with a Guidebook. We have also prepared an Instructor's Manual to facilitate the use of this rather unconventional book in the classroom. We owe many thank-yous. Bob Wallace of The Free Press must be especially singled out. In the musical chairs world of publishing these x EMBARKATION days, to be able to work with someone of his caliber, dedication, and experience is most unusual. Abby Luthin gave welcome support there as well. Kate Maguire provided great help, as she has so often in the past. (Kate labeled the manuscript "The Beast" long before it received its current title!) She was supported admirably by Elana Trager, especially in tracking down some tricky bits of information. Coralie Clement dealt with all the references and permissions, plus lots more, working across countries, authors, and problems with remarkable skill. At one point, she wrote in an e-mail, "I think it's pretty awesome that I am communicating with a Franco-Anglo-Canadian in India about a book being published in the U.S. and Europe Ahhh, modern life." Particularly wise and helpful were comments on the manuscript provided by Joelle Meiic. Thanks also go to the doctoral students of Henry's colloquium in Montreal, who made a number of helpful sug- gestions, and to Maeve Quaid, Doug Torgerson, and Melissa Nadler. We also express our appreciation to Denise Fleck for doing the index. —I — "AND OVER HERE, LADIES AND GENTLEMEN: THE STRATEGIC MANAGEMENT BEAST" A fable to begin, often referred to, seldom known: THE BLIND MEN AND THE ELEPHANT by John Godfrey Saxe (1816-1887) It was six men of Indostan To learning much inclined, Who went to see the Elephant (Though all of them were blind) That each by observation Might satisfy his mind. The First approached the Elephant, And happening to fall Against his broad and sturdy side, At once began to brawl: "God bless me but the Elephant Is very like a wall." The Second, feeling of the tusk, Cried, "Ho! What have we here So very round and smooth and sharp? To me 'tis mighty clear This wonder of an Elephant Is very like a spear!" The Third approached the animal, And happening to take The squirming trunk within his hands, Thus boldly up and spake: "I see," quoth he, "The Elephant Is very like a snake!" The Fourth reached out an eager hand, And felt around the knee, "What most this wondrous beast is like Is mighty plain," quoth he; " 'Tis clear enough the Elephant Is very like a tree!" [...]... competitive advantage in the selected area of activity 28 STRATEGY SAFARI Feasibility: The strategy must neither overtax available resources nor create unsolvable subproblems Finally, virtually all of the writings of this school make clear that once a strategy has been agreed upon, it is then implemented We show implementation in the diagram as flaring out from formulation, to suggest that after the appraisals... discussion of strategy inevitably ends on a knife-edge For every advantage associated with strategy, there is an associated drawback or disadvantage: 1 "Strategy sets direction." Advantage: The main role of strategy is to chart the course of an organization in order for it to sail cohesively through its environment Disadvantage: Strategic direction can also serve as a set of blinders to hide potential dangers... plan—looking ahead, with strategy as pattern—looking at past behavior 10 STRATEGY SAFARI FIGURE l-l STRATEGIES AHEAD AND BEHIND Strategy as plan (intended) Strategy as pattern (realized) Now, both definitions appear to be valid: organizations develop plans for their future and they also evolve patterns out of their past We can call one intended strategy and the other realized strategy The important question thus... stable states, then strategy making has to describe the leap from one state to another And so, another side of this school describes the process as one of transformation, which incorporates much of the huge prescriptive literature and practice on "strategic change." These schools have appeared at different stages in the development of strategic management A few have already peaked and declined, others... In other words, people took some of these ideas and elaborated them in terms of other assumptions about the strategy process (often, as we shall see, in contradiction to Andrews's own stated beliefs): for example, by adding the formality of the planning school and the analyses of the positioning school, or, in the work of Hamel and Prahalad, the adaptability of the learning school Premises of the Design... chaos can ensue as people pull in a variety of different directions 16 STRATEGY SAFARI THE STRATEGY BEAST: AREAS OF AGREEMENT (adapted from Chaffee, 1985:89-90) • Strategy concerns both organization and environment "A basic premise of thinking about strategy concerns the inseparability of organization and environment The organization uses strategy to deal with changing environments." • The substance... conclude that strategies are to organizations what blinders are to horses: they keep them going in a straight line but hardly encourage peripheral vision All this leads to our final conclusion, which is that strategies (and the strategic management process) can be vital to organizations by their absence as well as their presence (See the accompanying box.) Strategic Management as an Academic Discipline Also... School: The Positioning School: strategy formation as an analytical process The Entrepreneurial School strategy formation as a visionary process The Cognitive School: strategy formation as a mental process The Learning School: strategy formation as an emergent process The Power School: strategy formation as a process of negotiation The Cultural School: strategy formation as a collective process The Environmental... MBA strategy courses as well as a great deal of the practice of strategic management Professors, consultants, and planners worldwide have filled untold numbers of blackboards and flipcharts with its famous notion of SWOT the assessment of Strengths and Weaknesses of the organization in light of the Opportunities and Threats in its environment At its simplest, the design school proposes a model of strategy. .. than pursuing a strategy (read plan) of diversification, a company simply makes diversification decisions one at a time, in effect testing the market First it buys an urban hotel, next a restaurant, then a resort hotel, then another urban hotel with a restaurant, then a third of these, and so on, until a strategy (pattern) of diversifying into urban hotels with restaurants has emerged As implied earlier, . process of conception strategy formation as a formal process strategy formation as an analytical process strategy formation as a visionary process strategy formation as a mental process strategy. formation as an emergent process strategy formation as a process of negotiation strategy formation as a collective process strategy formation as a reactive process strategy formation as a. literature and prac- tice on " ;strategic change." These schools have appeared at different stages in the development of strategic management. A few have already peaked and declined, others