Schools of Thought in Strategic Management

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Strategy can be defined as the plans that businesses lay out to achieve their objectives (Sandberg, 1992). The plans that businesses set up in order to position themselves to make maximum profit include their mission, vision, goals, objectives, strategy, implementation and execution (Sandberg, 1992). For the previously mentioned plans to be successful good strategic management has to be in place. Good strategic management can be organized into three levels: corporate, business and operational levels (Ritson, 2013). The levels of strategic management can be formulated through several schools of thought. The schools of thought include the planning school, positioning school and the resource based school. The planning school of thought is a formulation that strives to make a fit between the strategy that a business has and the environment in which it is operating in (Ritson, 2013). Credit for the planning school goes to Igor Ansoff and K. Andrews (Flevy, August 2013; Ritson, 2013). The planning school is centered on a formal process that takes a rigorous approach focusing on detailed and inflexible planning (Sandberg, 1992). The planning school’s contribution to businesses is based on the ability to give clear directions and ensure resource allocation (Flevy, August 2013) . The planning school of thought is ideal for organizations that operate under tight control. Business models that use the planning school include: Scenario planning, Parenting style, Levers of control and the Theory of Mechanistic and Organic systems. The planning school of thought has limitations. There is a tendency for groupthink and can become too static. Prediction is difficult and as such it is not suitable for an unpredictable market. The ... ... middle of paper ... ...ning school places the business in the context of its industry and how it can improve its position within the industry. The resource-based school focuses on the internal resources available to the organization. It is important to understand different formulations in order to pick the perfect fit. Resources Flevy. (August 2013). Ten Schools of Thoughton Strategic Management. Retrieved February 1, 2014, from http://www.slideshare.net/flevydocs/ten-schools-of-thought-on-strategic-management Mission Statements. (2014). Retrieved January 31, 2014, from http://www.missionstatements.com/hospital_mission_statements.html Ritson, Neil. (2013). Strategic Management. In Bookboon (Series Ed.) Sandberg, William R. (1992, 1992 Spring). Strategic management's potential contributions to a theory of entrepreneurship. Entrepreneurship: Theory and Practice, 16, 73+.
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