The strategic management process consists of an ongoing cycle of activities, which are reciprocal and in reality may temporally overlap and not be clearly demarcated.
As described in Figure 3 the one-time mode of the process, dealing with a specific strategy or decision, is adequately captured in the flow of the traditional design model. Added in the organic view are several emphases. First, the chosen strategy guides strategy execution, which affects performance directly, and indirectly, through its effects on organizational (e.g., organizational structure) and environmental elements (e.g., industry structure). Second, an alternative and complementary path to strategy realization is an emergent strategy that can be interwoven with the formulation process or bypass it altogether. Emergent strategy can be based on other coordinating mechanisms such as core values, simple ‘rules’ and the like, and on the interaction between top management’s perspective and lower-level management’s feasibility assessment. Realized strategy takes its final form—a particular mix of coordinating measures—through real-time mutual adjustment to organizational and environmental forces and performance signals. Third, the flow cycles back in that performance influences organizational and environmental elements and realized strategy, and joins them as new informational inputs to strategy formulation. In the one-time mode of strategy, both performance and realized strategy shape future choices through learning and the provision of inputs stemming from emerging strategy or strategy experiments. In the cycle, thought and action continuously and reciprocally feed each
other.[14]
The recurrent mode of strategic management reflects the idea that strategic management is not a given process but one that needs to be initiated, cultivated and occasionally modified, and is ongoing: its uses are not confined to a single cycle or a particular strategy. Three tasks of strategic management are particularly pertinent to its continuous nature. First, facilitating the formulation of strategies, for example, by establishing market and competitive intelligence devices or by managing the formulation process itself: staffing, hiring external consultants, dividing responsibilities between management and board, and establishing the desired degree of decision conflict. Second, facilitating the emergence of strategies, for example, by encouraging bottom-up contributions, cultivating supportive organizational culture, rewarding rich communication flows, and the like. Third, enhancing the implementability
of strategies, through delegating responsibilities, encouraging participation, and strengthening the firm’s capacity for change, for example. These three tasks influence the first-order, more frequently repeated activities of formulation and realization. They can also be revisited under special circumstances. For example, the firm may need to take action through double-loop learning (Argyris and Schon, 1978) upon learning of consistent problems in a major aspect of its strategic management: the firm’s response may be too slow due to a lengthy implementation process or it may not have the right mechanisms to encourage creative strategies.
Rooted in organic notions of time, interaction and integration, and as shown in Figure 3, the organic model of strategic management emphasizes several themes. We focus on four in particular.
First, a key feature of the model is that firm organization and firm environment interact with each of the subprocesses of strategic management. The roles of different elements of the firm’s environment and firm organization are not confined to being inputs to strategy, but extend to being a context for facilitating strategy, interacting with the actual process of realization, and partly being products of strategy itself. Specifically, external action–interaction sequences are important in strategy realization at the same time that internal social, cognitive, cultural, and political processes play a role in strategy formulation. Furthermore, administrative issues and implementation may require formulation and planning too, and content issues need to include the choice of strategic moves and paths (see also Inkpen and Choudhury, 1995). Each of the strategic management subprocesses combines both social and analytic considerations. A more holistic view of strategy replaces the conventional distinction between content and process.
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