Adaptive Systems Within a Company’s Approach to Strategic Management

ADAPTIVE SYSTEMS WITHIN A COMPANY’S APPROACH TO STRATEGIC MANAGEMENT

INTRODUCTION

There are varying perspectives on how organisations are viewed in terms of structure, production and outputs. Some are of the view that organisations are (or supposed to be) like machines with processes and mechanisms that produce expected results, while others view organisations as a complex systems with many parts linked together, where a change in one part, even a positive minute change, can have adverse effect on other parts of the system. This article focuses on the latter part of this school of thought, emphasising that organisations today are of a more complex nature and which requires complex adaptive systems in the approach to strategic management if maximum output is desired for the organisation as well as for the human resource who make up the organisation.

Strategic management is very essential for any organisation as it provides direction and scope for the organisation to achieve long term results in maximising the use of its resources to meet the needs of the market as well as stakeholder expectations. Until the 1970s where strategic management became prominent, most organisations had not seen strategic management as a ways of dealing with complex organisational situations and did not look at issues from a strategic perspective. Many strategic concepts were developed to help in the strategic planning industry. These concepts include SWOT analysis, the concept of competitive advantage, and Porter’s Five Forces framework

Today, most organisations view themselves as complex systems and strategic planning as a way of analysing organizational mission, vision and policies and as a means of putting the organization in the right frame to handle challenges that may come along. Pascale (1999) indicated that we are now in the strategic era. This article aims to discuss how adaptive systems exist within a company’s approach to strategic management; Approaches to strategic thinking, Complexity Perspective, as well as Complex Adaptive Systems and the implications on the organisation. It focuses on the adaptive systems being used in modern times and analyses how these systems affect the overall strategic management of the company as compared with other new and emerging trends.

APPROACHES TO STRATEGY

From an strategy-as-practice point of view, strategy has been defined ‘as a situated, socially accomplished activity, while strategizing comprises those actions, interactions and negotiations of multiple actors and the situated practices that they draw upon in accomplishing that activity’ (Jarzabkowski et al. 2007, 7–8). Strategy is a very important tool in every organisation and is also view as “the direction and scope of an organisation over the long term which achieves advantage for the organisation through its configuration of resources within a changing environment to meet the needs of markets and to fulfil stakeholder expectations." Johnson, Scholes and Whittington (2011). Mintzberg and Waters (1985) explain that organisational strategies can be approached from two main models. Though some strategies may have dual characteristics, the two main modules are deliberate strategies and emergent strategies.

Deliberate strategies are the formal-based approach to strategic management where an organisation’s visions, goals and objectives are articulated in as much detail as possible, to the employees or those responsible for the achievement and realisation of these objectives. Deliberate strategies are are pre-planned and acted out as planned without much room for flexibility, adjustment or change. Mintzberg and Waters (1985) explain that for a strategy to be described as perfectly deliberate, or for the realised strategy to be as exactly as intended, at least three conditions must have been satisfied. The first condition is that there must be precise intentions in the organisation and this must expressed in full detail so that there is no room for doubts or misunderstanding on what is to be achieved. The second condition is for all actors to know their role in the achievement of the set organisational goals and the third is that the collective goals and objectives must be achieved exactly as intended without the influence of any external force.

Emergent strategies on the other hand are those strategies that are developed over time and become a habit after being done over a period of time (Johnson et al, 2011). These are not formal-based but rather, bottom up strategies that emerge as a series of decisions or a developing pattern over a period of time. For a strategy to be called a perfectly emergent one, a condition must be met. There must be consistency in the action taken over time without intention to do so. An example of this can occur ‘when an environment directly imposes a pattern of action on an organization’.

Both emergent and deliberate approaches to strategy have their pros and cons. There is no generally accepted consensus on which of the two strategies is better. It is up to the organisation to determine which approach to use in achieving organisational goals and objectives. Most organisations are easy to fall for the use of deliberate strategies as it outlines exactly what needs to be achieved and ways to achieve them. In Computershare Pan Africa Ltd for example, the main approach to organisational strategy is the deliberate approach. This is because the company mainly deals with the stock market and there are specific systems and processes that must be followed. This helps all actors in the organisation know exactly what to do to attain organisational success and client satisfaction. The actors however, also developed emergent strategies in meeting customer satisfaction by the use of modern trends such as social media to interact with customers and even conduct surveys to help understand better their needs. This trend was initiated by employees in a quest to improve customer satisfaction as most employees needed this to be able to earn more commission.

The above analysis and example indicates that no one organisation can be perfectly deliberate or emergent. A bit of each of the strategies help in achieving organisational goals and as suggested by Mintzberg and Waters, these two (emergent and deliberate strategies) form the poles of a continuum along which real-world strategies will fall. Mintzberg and Waters introduced a variety of types of strategies that fall in this continuum. These are; the planned strategy, entrepreneurial strategy, the ideology strategy, the umbrella strategy, the process strategy, the unconnected strategy, the consensus strategy and the imposed strategy.

• With planned strategy, those at the centre of authority are the policy makers and they articulate these policies as precisely as possible to the actors of the policy and make sure these policies are implemented with little or no distortions whatsoever. This plan must be implemented in environments which is at least predictable or as Galbraith (1967) describes the 'new industrial states', organisations that are powerful enough to impose their plans on their environments.
• Entrepreneurial strategies are the strategies usually used by entrepreneurs. This is where one person in control of the business imposes visions, goals and directions he or she feels will help the organisation achieve success on the actors of the organisation. This strategy is usually used in small scale businesses but is also sometimes adopted by large scale businesses where one leader is in control.

• Ideology strategies, as the name goes, are developed on collective or individual visions and ideologies. Ideology strategies can be adapted or changed. In Computershare Pan Africa Ltd, there is a system Business Improvement Group (BIG) where all employees meet together and bring out new ways of looking at certain aspects of the business to improve customer satisfaction. The ideologies are sometimes individual and sometimes collective and could be adapted or changed pertaining to its impact on the organisation.

• The umbrella strategy is usually developed by leaders who do not have overall control over the actors in the organisation. This strategy helps to set guidelines and boundaries and allows other actors work around these guidelines and boundaries. An example of this kind of strategy occurs in architectural firms where clients relate exactly what they want and the architects work with those guidelines to produce what is needed by the actor.

• The process strategy is quite similar to the umbrella strategy as in, the leadership does not have total control of the strategy formulation of the organisation. However with the process strategy, the leadership does not set boundaries but rather exercises indirect influence by determining those who get to make the strategies.

• The unconnected strategy, is a very straightforward kind of strategy. This kind of strategy can be adopted when there is a subunit or an individual who is loosely attached to the rest of the organisation. This individual or unit can undertake unconnected strategies that will have little or no significance on the whole group.

• The consensus strategy develops from mutual adjustments as individuals in an organisation learn from each other and may also be as a result to environmental influences. There arise a consensus usually which is not pre-determined and this mutual consensus becomes a strategic approach to complex systems in the organisation.

• The imposed strategy is usually an outcome of external impositions on an organisation by an individual or a group that has greater influence. For example, the government can set out a policy that can cause a company to develop certain strategies to help in their operations in order to sustain their operations. Sometimes, imposed strategies are also a result of environmental impositions on the organisation. The actors of the organisation develop strategies to deal with these impositions so that there will be continuity in the organisation.

The above emergent and deliberate strategies each have their own implications on the organisation depending on how they are implemented and the outcomes on organisational development. In order to know which of these strategies is ideal in a given organisation, strategic planning is definitely the way forward and effective implementation of the strategies arrived at.

COMPLEXITY PERSPECTIVES

Complexity as described by Mitleton-Kelly (2001), “is associated with the intricate inter-twining or inter-connectivity of elements within a system and between a system and its environment”.  Milteton-Kelly further explains that “no individual or organisation is powerless – as each action permeates through the intricate web of inter-relationships and affects the social ecosystem”.

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