In order to be sustainable and provide valuable community services, non-profit organisations require a strategic plan or strategic intent. Two models of strategy development are intended strategy development and emergent strategy development.
Forms of Emergent Strategy Development
Emergent strategy development processes are in many respects the polar opposite of intended strategy development processes. Where intended strategy development is based on analytical reviews of evidence and assumptive forecasting of the future business environment, emergent strategy development processes required that managers are engaged, creative in thinking and open to an element of risk taking (Downs, Durant & Carr, 2003). Logical incrementalism, resource allocation, organisational politics and cultural processes are forms of emergent strategy development processes (Johnson, Scholes & Whittington, 2008).
Logical Incrementalism
Comparative to formal strategic planning process, logical incrementalism is a dynamic and non-linear form of strategy development which allows managers to constantly recalibrate and re-tune the organisation’s strategy on the basis of incoming information (Quinn & Voyer, 1998).
Generalised views of the organisation’s strategic capabilities and position, use of informal and formal internal information gathering processes, a lack of stability in the environment and a belief in learning through innovation and experimentation are hallmarks of organisations using logical incrementalism as a strategy development process (Johnson, Scholes & Whittington, 2008). A political aspect exists within logical incrementalism and must be solved through the allocation of resources. Due to the potential for political interference, following a logical incrementalism strategy may result in sub-optimal strategic decisions (Andrews, Boyne, Law & Walker, 2009).
Organisations using logical incrementalism as a strategic development process may share the setting of strategic direction throughout the organisation and allow mid and lower level managers to play a proactive role in strategic developments opposed to the top down approach favoured by formal strategic planning processes. Logical incrementalism is used frequently when community organisations develop new programs or services to meet an unmet need in the community.
Resource Allocation
Organisations have finite resources which must be deployed in a fashion that provides for maximum returns. As a strategy development, resource allocation differs from intended strategy development processes as it is responsive to changes in the environment as they occur, as opposed to making assumptions about the future environment (Johnson, Scholes & Whittington, 2008). Resource allocation process also does not focus on achieving a vision for the organisation. The process is similar to logical incrementalism in its monitoring of and responding to changes in the internal and external business environment.
The responsibilities for making strategic decisions may be spread throughout the organisation and a seemingly minor decision by a mid-level manager may have a significant effect on the strategic direction of the organisation (Burgelman, 1994; Burgelman & Grove, 2007, Johnson, Scholes & Whitting, 2008). In community organisations with limited resources and funding, the resource allocation process is critical to ensuring that funds are spent on the areas where there is most need. Together with logical incrementalism, resource allocation in a community organisation allows the organisation to be flexible and respond to community need.
Organisational Culture and Politics
Organisational culture plays a role in the development of corporate strategy, regardless of whether intended or emergent strategy development processes are followed (Johnson, Scholes & Whittington, 2008). Organisational culture creates an accepted company way of behaving (Johnson, Scholes & Whittington, 2008). Organisational politics can impact on the development of corporate strategy and require that agreements be reached between competing ideas and individuals (Johnson, Scholes & Whittington, 2008). The control of information flowing to higher level management may affect strategy development as lower level managers who have knowledge and power to determine the ideas and threats that are presented for senior management review may select ideas that are beneficial to their individual careers or departments.
In community organisations that operate on limited funding and assets, emergent strategy development processes enable the organisation to be flexible and respond to community needs. Emergent strategy development processes include logical incrementalism, resource allocation and organisational culture and politics. .
Sources
- Andrews, R., Boyne, G. A., Law, J. & Walker, R. M. (2009). Strategy formulation, strategy content and performance: an empirical analysis. Public Management Review, 11(1), 1-22.
- Burgelman, R. A. (1994). Fading memories: a process theory of strategic business exit in dynamic environments. Administrative Science Quarterly, 39, 24-56.
- Burgelman, R. A. & Grove, A. S. (2007). Let chaos reign, then rein in chaos – repeatedly: managing strategic dynamics for corporate longevity. Strategic Management Journal, 28, 965-979.
- Downs, A., Durant, R. & Carr, A. N. (2003). Emergent strategy development for organizations. Emergence. 5(2), 5-28.
- Johnson, G., Scholes, K. and Whittington, R. (2008). Exploring corporate strategy (8th edition), England: Pearson Education Limited
- Quinn, J. B. & Voyer, J. (1998). Logical incrementalism: managing strategy formation. In H. Mintzberg & J. B. Quinn (Eds). Readings in the strategy process (pp 107-113). Prentice Hall, Upper Saddle River, New Jersey
Tracey Lloyd - Based in Australia, Tracey Lloyd is experienced in management & strategic development of community projects and non-profit ...
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