Please enable JavaScript.
Coggle requires JavaScript to display documents.
Rational strategy - Coggle Diagram
Rational strategy
Ansoff (1990) suggested that organisations are purposive, that they have an intent to achieve something. An objective was a means by which success or failure could be identified and he split these objectives into four categories
Economic
The efficient use of available resources to convert inputs into outputs giving the opportunity to measure this quantitiatively
Non-economic
The ability to satisfy the expectations of stakeholders; this can be both quantitative and qualitative
-
Flexibility
Sufficient latitude in the prescribed plan to enable an organisation to survive and manage different forces
Johnson et al. (2017) reported that strategic management needs to include but also differentiate between the day to day operational (shorter term) decisions made by managers and the process often undertaken by the same managers of making strategic (longer term) decisions. They suggest that strategic management has four core aspects
Analysis
The collection and interpretation of appropriate data to enable the understanding of reality, resource and expectations
Choice
The evaluation of the strengths and weaknesses of different potential options arising from the analysis and the ability therefore to establish a method of how to choose a preferred option
-
Control
The establishment of a method of monitoring outcomes of each stage of the process of strategic development
-
There are a number of core attributes that are normally attached to the thinking behind rational strategy
A rational strategy will be created at the top of an organisation, by the leaders and/or those who have accountability for an organisation
A rational strategy starts with the entirety of an organisation, before it can be broken down into smaller constituent parts
A rational strategy will contain conscious choices that have been made concerning the length of the plan, the levels of risk, opportunities and threats offered by the environment and the realistic availability of resources
-
Crafting and intuition
Ohmae (1982) discusses the development of strategy in a range of Japanese companies suggesting that human traits of creativity and obsession were as important as a rational and logical approach in the formation of strategy
-
Competition
Porter (1980) considered the competitive markets within which organisations operated and suggested that the underlying rationality of their strategic development was often geared to enabling an advantage over the various competitive forces
-
Strategy does not just happen, it requires management by people
The rational view of strategic management is based upon the presumption that the people undertaking the strategic management will always act in a logical, structured and proactive manner