A GUIDED TOURTHROUGH THE WILDS OF STRATEGIC MANAGEMENT HENRY MINTZBERG BRUCE AHLSTRAND JOSEPH LAMPEL THE FREE PRESS NEW YORK I &A", 4&d< There are some people who begin the Zoo at the beginning, called WAMN, 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 THE FREE PRESS A Division of Simon & Schuster Inc. We dedicate this book to such people who are more interested in open 1230 Avenue of the Americas fields than closed cages. New York, NY 10020 Copyright O 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 10987654 Permissions acknowledgments appear on pages 393-395. Library of Congress Cataloging-in-Publication Data Mintzberg, Henry. Strategy safari : a guided tour through the w~ldsof strateg~c management I Henry Mmtzberg, Bruce Ahlstrand, Joseph Lampel. p. cm. Includes bibl~ographicalreferences and ~ndex. 1. Strateg~cplannmg. L Ahlstrand, Bruce W. 11. Lampel, Joseph. Ill. Title. HD30.28.M564 1998 658.4'0124~21 98-9694 CIP ISBN 0484- 847434 (hardcover) .- r& ? "5d&s-&?r&&* CONTENTS Embarkation ..........................ix "And Over Here, Ladies and Gentlemen: The Strategic Management Beast" ............. .1 The Design School ..................... .23 Strategy Formation as a Process of Conception The Planning School ................... .47 Strategy Formation as a Formal Process The Positioning School .................. .81 Strategy Formation as an Analytical Process The Entrepreneurial School ................I23 Strategy Formation as a Visionary Process The Cognitive School .................. .I49 Strategy Formation as a Mental Process The Learning School ................... .I75 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 his trip began with a paper by Henry called "Strategy Formation: I I The Configuration School .................301 TSchools of Thought," published by Jim Fredrickson in a collec- Strategy Formation as a Process of Transformation tion entitled Perspectives on Strategic Management (HarperCollins, 1990). Bruce used the paper in a course at Trent University and found I2 "Hang On, Ladies and Gentlemen, that it worked well. "Why don't you do a book on it!" he suggested. You Have Yet to Meet the Whole Beast" ..........349 "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 References 375 launched. lndex 397 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 ~ublishingthese 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 "AND OVER HERE, current title!) She was supported admirably by Elana Trager, especially in tracking down some tricky bits of information. Coralie Clement LADIES AND GENTLEMEN: dealt with all the references and permissions, plus lots more, working THE STRATEGIC MANAGEMENT BEAST" across countries, authors, and problems with remarkable skill. At one point, she wrote in an e-mail, "I think it's pretty awesome that 1 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 MCric. 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. "To be perfectly frank, I'm not nearly as smart as you seem to think I am." A fable to begin, often referred to, seldom known: The Fifth, who chanced to touch the ear, Said: "E'en the blindest man THE BLIND MEN AND THE ELEPHANT Can tell what this resembles most; by JohnGodfrey Saxe (I 8 16- 1887) Deny the fact who can, This marvel of an Elephant It was six men of lndostan Is very like afan!" To learningmuch inclined, Who went to see the Elephant The Sixth no sooner had begun (Though all of them were blind) About the beast to grope, That each by observation Than, seizing on the swinging tail Might satisfy his mind. That fell within his scope, "I see," quoth he, "the Elephant The First approached the Elephant, is very like a rope!" And happening to fall Against his broad and sturdy side, And so these men of lndostan At once began to brawl: Disputed loud and long, "God bless me but the Elephant Each of his own opinion Is very like a wall." Exceeding stiff and strong, Though each was partly in the right, The Second, feeling of the tusk, And all were in the wrong! Cried, "Ho! What have we here So very round and smooth and sharp? Moral To me 'tis mighty clear So oft in theologic wan, This wonder of an Elephant The disputants, I ween, Is very like a spear!" Rail on in utter ignorance The Third approached the animal, Of what each other mean, And happening to take And prate about an Elephant The squirming trunk within his hands, Not one of them has seen! Thus boldly up and spake: "I see," quoth he, "The Elephant Is very like a snake!" e are the blind people and strategy formation is our elephant. The Fourth reached out an eager hand, WS ince no one has had the vision to see the entire beast, every- And felt around the knee, one has grabbed hold of some part or other and "railed on in utter ig- "What mostthis wondrous beast is like norance" about the rest. We certainly do not get an elephant by adding up its parts. An elephant is more than that. Yet to comprehend the Is mighty- ,. plain, " quoth he; whole we also need to understand the parts. "'Tis clear enough" the Ele~hant I Is very l~kea tree'" The next ten chapters describe ten parts of our strategy-formatio I *%,k &* 4 STRATEGY SAFARI 'AND OVER HERE. LADIES AND GENTLEMEN: ...' J beast. Each forms one "school of thought." These ten chapters are schools, together with the single adjective that seems best to capture framed by this first chapter, which introduces the schools as well as each one's view of the strategy process, are listed below: some ideas about strategy itself, and a last chapter which returns to the The Design School: strategy formation as a process of whole beast. conception The Planning School: strategy formation as a formal process Why Ten? The Positioning School: strategy formation as an analytical In a colorful article entitled "The Magic Number Seven, Plus or Minus process Two: Some Limits on Our Capacity for Processing Information," psy- The Entrepreneurial School: strategy formation as a visionary chologist George Miller (1956) asked why we tend to favor a quantity process of about seven for categorizing things-for example seven wonders of The Cognitive School: strategy formation as a mend process the world, seven deadly sins, and seven days of the week. This reflects The Learning School: strategy formation as an emergent our cognitive makeup, he concluded: seven is about the number of process "chunks" of information that we can comfortably retain in our short- The Power School: strategy formation as a process of term memories." Three wonders of the world would fall a little flat, so negotiation to speak, while eighteen would be daunting. But those of us interested The Cultural School: strategy formation as a collective in strategy are, of course, no ordinary mortals-at least in terms of our process cognitive capacities-and so should be able to comprehend, say, one The Environmental School: strategy formation as a reactive more than the magic number seven plus two. Accordingly, this book process proposes ten schools of thought on strategy formation. The Configuration School: strategy formation as a process of Cognition aside, in reviewing a large body of literature, ten distinct transformation* points of view did emerge, most of which are reflected in management practice.