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Thursday, 7 November 2013

Strategic management: A critical discussion of the assertion that “Mintzberg’s 5 Ps for strategy (1987) presents an incomplete view of the topic”



The concept of strategic management is concerned with how organisations ensure their survival in the market and how they achieve their goals (Drejer, 2002). The strategic management concept is wide and complex and has in most cases not been comprehensively defined using any of the concepts developed in the market. Each of the strategic management concepts provides insights into specific dimensions. For instance, the Mintzberg’s 5 Ps concepts provide insights on strategy by exploring alternative ways of viewing it (Drejer, 2002). Other strategic development models such as the Ansoff Matrix are dedicated to the growth of the organisation and how growth strategies can be implemented (Grant, 2007). The Core Competencies model and the resource based view perspectives are on the other hand focused on the internal analysis of the organisation with the aim of establishing which resources can be used by the organisation to gain a competitive advantage in the market (Grant, 2007). Other concepts provide detailed analyses of the levels of strategy in the organisations with proper emphasis on the importance of each level of strategy and how organisations enhance their effectiveness. The same applies to the various models (Porter’s 5-forces model and the PESTEL model) which have been dedicated to the analysis of the external environment with an aim to establish the strategic position of the organisation and how the organisation can thrive in such environments (Haberberg and Rieple, 2007). The Mintzberg’s 5 Ps for strategy provide useful insights that a strategic manager could use in the strategic management process and ensure successful achievement of the desired goals. The following sections of the paper are dedicated to the study of concept with a view to determine whether or not it presents a complete view of the strategic management of organisations.     

Mintzberg’s 5 Ps for strategy are alternative approaches to strategy and provide useful insights on the practical dimensions of the strategic management process (Mintzberg, 1987). The 5 Ps can be listed as Plan, Ploy, Pattern, Position, and Perspective and are as explained below:

The view of strategy as a plan implies that strategic is a consciously intended and developed deliberately as a means of dealing with a given desire or in reaction to a set of factors (Mintzberg, 1987). This implies that the strategies are devised well before the actions are implemented and that they are intentionally derived. Mintzberg also held the view that strategy can be a ploy; where a ploy means a manoeuvre aimed at outwitting the competition. This view requires that the strategic manager has a good idea of what the competition is planning and then taking pre-emptive measures to ensure that their organisations are not adversely affected by such moves (IFM, 2011). For instance, a firm could buy patent rights to stop a rival from using the same technologies to launch new products in the market. The third P refers to Pattern and it implies that organisations can unconsciously implement a strategy by consistently repeating the same activities which end up providing them with a strategic advantage (IFM, 2011). Unlike the plan, these are unintentional and are realised after the patterns have been effectively implemented.

The view of strategy as a position refers to the idea of establishing the environmental factors and establishing the position of the organisation in the environment (Mintzberg, 1987). This implies that the environmental factors that are relevant to an organisation must be analysed and actions to ensure survival or success devised appropriately. According to Mintzberg, strategy can also be viewed as a perception (Mintzberg, 1987). This implies that the strategy defines how the organisation perceives the world and it is comprised of the shared visions of the members of the organisations as expressed by their goals and objectives (Wheelen, 2008). 

Insights into the completeness of the Mintzberg’s 5 Ps for strategy in strategic management
The concept of strategic management is too wide to b covered comprehensively by a single model. The Mintzberg’s model paints an incomplete perspective of the planning process by failure to mention the importance of the various levels of strategic management. The organisation can have strategic management conducted at the corporate level, business unit level and the operational levels (Wheelen, 2008). The corporate level strategies deal with the overall vision of the organisation while the technical level of strategy translates these overall visions into actionable steps (Grant, 2007). The functional strategies on the other hand translate the resultant strategies into routine activities within the organisation (Wheelen, 2008). The strategic management process which starts from the analysis of the environment to the generation of strategies and the implementation of the same has not been mentioned comprehensively.

While satisfying the threshold of providing the basic information, the Mintzberg’s model fails paint a complete picture on the various strategic options available to the organisation and the circumstances under which each of the strategies can be made more effective. The Porter’s generic strategies concept makes a determination of the most suitable strategies that organisations can take when faced with different conditions (Johnson, Whittington and Scholes, 2011). For instance, an organisation with ways of minimising its production cost is better off embracing the cost leadership strategies while one with access to superior technologies would be better off pursuing the product differentiation strategy (Johnson, Whittington and Scholes, 2011). One with neither of the two advantages on the other hand should embrace the concept of value addition through branding and marketing to create a brand premium for its products (QuickMBA, 2011). This model goes on to demonstrate how effectively organisations can compete irrespective of their weaknesses.   

The Mintzberg’s model also makes a brief mention of the importance of evaluating the environment when coming up with strategies. However, this brief mention is insufficient in providing a reliable framework within which the organisation can thoroughly evaluate the environment and come up with corresponding strategies. The PESTEL model and the SWOT analysis models come in handy to compensate this deficiency. The PESTEL model is useful in analysing the macro environment and basically describes the conditions in the national economy (De Wit and Meyer, 2010). In the increasingly globalised world, the model can be applied to the analysis of the global economy (De Wit and Meyer, 2010). The PESTEL model analyses factors such as the Political factors (which describe issues relating to governance and the political forces in an economy); economic factors (referring to issues such as economic growth, purchasing power of customers and others); socio-economic factors (describing demographic structures, tastes and preferences, societal dominant concerns, as well societal perceptions towards organisations); technological factors (describing the level of technological advancement in an economy); environmental factors , and the legal factors-describing the existing laws that affect the conduct of business (De Wit and Meyer, 2010). The analysis of these factors enables the formulation and implementation of strategies that can easily help in the achievement of the organisational goals.

The Mintzberg’s model has also been variously faulted on its emphasis on the monitoring of the competitors’ movements without paying attention to other factors in the industry. Strategic management experts propose the use of a more balanced approach of industry analysis which considers the actions of the competitors are just one of the components of the industry (Grant, 2007). One such strategic tool is the Porter’s 5 forces model for the analysis of the industry. This model helps in analysing the industry and it focuses on the level of rivalry among the competitors, the threat of entry into the industry, the threat of substitutes for the organisation’s products and services, the buyer power, and the supplier power (Wheelen, 2008). This balanced view ensures that the organisation can come up with reliable strategies that have factored in all the relevant elements in the industry in question. Whereas the Mintzberg’s model does not disallow the use of this comprehensive approach, it provides scanty details which paint an incomplete view on how the ‘position’ of the organisation should be analysed.    

The Mintzberg’s model fails to pursue the question of core competencies in a manner that creates a better understanding of the same. The resource based view of the organisation uses the VRIN framework to explain how the organisation can ensure that their core competencies are used in creating a competitive advantage for the organisation (Drejer, 2002). According to the VRIN framework, the resources possessed by the organisation must be valuable, inimitable, rare, and non-substitutable for them to be used to create a competitive advantage (Drejer, 2002). Being valuable implies that the benefit offered by a resource must be higher than the cost of acquiring or maintaining it while being rare implies that the resource is not easily available. Inimitability implies that the resource in question cannot be replicated by competition while the non-substitutable attribute implies that the functionality of the given resource cannot be achieved by the use of other resources at the disposal of the competition (Barney, 2010). 

Mintzberg’s 5 Ps for strategy cannot stand alone when it comes to the analysis of the strategic capabilities of the organisation. Models such as the SWOT analysis model must be used in order to ensure that the organisation is well equipped in determining its internal strengths and weaknesses and how these can be exploited to advance organisational goals (Barney, 2010). An organisation’s strengths are the internal capabilities that can be harnessed to yield a strategic advantage for the organisation. Weaknesses on the other hand are factors that make the organisation vulnerable to the competition. The knowledge of strengths and weaknesses enable the organisation in question to come up with strategies that harness potential from their strengths while diminishing the impact of their weaknesses (Haberberg and Rieple, 2007). Such knowledge also enables the organisations to come up with ways of either eliminating their weaknesses or turning them into sources of strength (Haberberg and Rieple, 2007). For instance, an organisation whose weakness is the reliance on the use of natural hands may suffer from its ability to automate its processes and reap the benefits of scale. However, such an organisation can make use of this expertise to come up with unique designs that sell at a premium and hence generate remarkable profit margins. The SWOT analysis model is also important in identifying the opportunities and threats in the environment where the organisation can either make use of their strengths to exploit the arising opportunities or come up with ways of minimising the damage brought about by arising threats (Barney, 2010).

As can be seen from the alternative views of strategy and the strategic management process, there are several points of view that have not been factored in or completely ignored by the Mintzberg’s 5 Ps for strategy. This is not to say that the Mintzberg’s model is not useful in strategy. Contrary to this, it must be appreciated that this model provides useful insights on strategy and how organisations can pursue strategic management to enhance their survival in the market. With an emphasis on the five elements of Plan, Ploy, Patterns, Position and Perception; the model covers the main aspects of strategy and the strategic management process. However, these processes have been mentioned in brief and in a manner that fails to bring out the complexity of the specific dimensions. For instance, the analysis of an organisation’s resources must be done comprehensively and this may be difficult to achieve in the absence of the relevant strategic models such as the SWOT and the VRIN frameworks. The same applies to the analysis of a firm’s environment where it is necessary to follow the provided frameworks to ensure that such an analysis is comprehensive and reliable.
In conclusion, it must be appreciated that the Mintzberg’s model provides great insights into strategy and the strategic management process. However, the picture painted by the same is largely incomplete and other strategic concepts must be pursued to bridge the information gap.

For more theory and case studies on: http://expertresearchers.blogspot.com/

Barney, J.B., 2010. Strategic Management and Competitive Advantage. 3rd Ed. Boston: Prentice Hall
De Wit, B., Meyer, R., 2010. Strategy: Process, Content, Context: An International Perspective. 4th Ed. Cengage Learning
Drejer, A., 2002. Strategic Management and Core Competencies: theory and application.London: Quorum Books
Grant, R.M., 2007. Contemporary Strategy Analysis: text and cases. 7th Ed. Chichester: J Wiley & Sons
Haberberg, A., Rieple, A., 2007. Strategic Management Theory and Application. Oxford: Oxford University Press
IFM, 2011. Mintzberg’s 5 Ps for strategy. (Online) Available at: http://www.ifm.eng.cam.ac.uk/dstools/paradigm/5pstrat.html (Accessed 14 November 2011)
Johnson, G., Whittington, R., Scholes, K., 2011. Exploring strategy: Text and Cases. 9th Ed. Harlow: Pearson
Mintzberg, H., 1987. The Strategy Concept 1: Five Ps for Strategy. (Online) Available at: http://www.mbakku.com/STD/CourseSyllabus1-52/1_52/sm-Tanai/5ps%20of%20strategy.pdf (Accessed 14 November 2011)
QuickMBA, 2011. Porter’s Generic Strategies. (Online) Available at: http://www.quickmba.com/strategy/generic.shtml (Accessed 14 November 2011)
Wheelen, T.L., 2008. Strategic Management and Business Policy Concepts. 11th ed. Upper Saddle River, NJ: Prentice Hall

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