The introduction of strategic planning has generated significant attention among managers as it instills a sense of urgency and rationality towards the process (Mintzberg et al, 1998). However, Whittington (2001:4) argues that as circumstances change, the plan is likely to be forgotten. This essay critically examines ‘The Fall and Rise of Strategic Planning’, including its place in the larger debate, theoretical foundation, and its main strengths and weaknesses. Ultimately, a conclusion will be drawn regarding the article’s impact on the field of business strategy.
Whittington’s classical and processual approaches are considered by the article. Mintzberg challenged traditional classical planning and moved towards the processual approach by identifying three fundamental fallacies. Firstly, classicalists believed that today’s planning could accurately forecast and adapt to market changes. Mintzberg, however, argued that predicting discontinuities was “virtually impossible” and raised doubts about Ansoff’s statement. Hogarth and Makridakis further emphasized the imprecise nature of long-term predictions. To illustrate this point, the example of Wilbur Wight’s disbelief in the prevalence of airplanes in 1901 is mentioned. Mintzberg advocated for the evolution of strategic planning to adapt to complexities in an unpredictable world, aligning with the processual approach.
According to the classical school, strategies are best created by senior managers who are not directly involved in the day-to-day operations of the business. However, Thietart and Forgues criticized this approach as being unrealistic and disconnected from the interactive and dynamic nature of business. Mintzberg et al. argued that detached managers and abstract planners do not actually create strategies, and that true strategists are actively involved in digging for new ideas. They also emphasized the importance of exchanging soft data, such as gossip and hearsay, instead of relying solely on hard data like market research reports. Mintzberg recognized that hard data has limitations and believed that managers need access to softer information. Langley also emphasized the need for informal learning in the strategy creation process.
According to the classical approach, formal planning is seen as a rational process of deliberate calculation and analysis. It is often embraced as “the one best way.” However, Mintzberg argues that perfect rationality does not exist. Instead, he suggests that strategies are developed through messy informal learning and can appear anytime and anywhere. Strategies are usually inspired by a realistic process of learning, bodging, and compromise. For example, the UK Government did not plan for the collapse of Northern Rock in 2008 but eventually nationalized the bank as a recovery strategy.
Mintzberg (1994) argued that organizations should not assume that there is no need for programming if they are dissatisfied with strategic planning. According to Mintzberg, feasible strategies should combine emergent flexible learning and deliberate cerebral control. Harrison (1995), meanwhile, supported the notion that both senior management’s intentions and strategy can be developed unconsciously through learning. Indeed, a study of 112 manufacturing firms found that incorporating intuition and creation into a formal planning system led to high organizational performance (Falshaw et al, 2006).
According to Mintzberg, the world is too turbulent to plan for all complexities, as emphasized by the Chaos theory. Long-range forecasting is difficult due to nonlinear dynamics. Mintzberg believes that strategic-making requires inventing new categories rather than rearranging old ones, as history cannot repeat based on complicated and nonlinear interactions. He advocates for a processual approach that involves responsive, intuitive, and adaptive learning in tune with the messy world. However, not everyone agrees with this perspective. For example, Microsoft’s President Ballmer argues that their planning system is effective and dismisses the idea that everything changes every day.
Secondly, Mintzberg (1994) suggests that formulation and implementation cannot be separated. Burgelman (1983, cited in Currie, 1999) agrees and believes that the responsibility for both should be spread throughout organizations to increase involvement and commitment from internal stakeholders (Senge, 1990). Whittington (2001) also supports this notion, stating that successful strategies arise from being intimately involved in daily operations. Mintzberg (1994) adds that strategies are only effective when enthusiastic individuals bring them to life. Mintzberg (1994: 109) proposes that an ‘integrated perspective’ can be created by involving everyone in the process. From this perspective, planners aim to reduce managers’ control over strategy-making, as it is a complex process requiring collaborative thinking. However, there are challenges to consider, such as reconciling conflicting interests and finding the best compromise.
Thirdly, according to Mintzberg (1994), formalizing strategic making is not possible. In contrast to the formal planning system that can only process information, strategic making involves internalizing, comprehending and synthesizing information. Additionally, emergent strategy, which deviates from the traditional formulation-implementation sequence, is discovered through action (March, 1976). Mintzberg (1994:111) states that “we think in order to act, but we also act in order to think”. An example that supports this is Linux, which evolves without any planned future or goals. According to Linus Torvalds, the creator of Linux, it is simply a hobby (Computer-DealerNews cited-in Whittington, 2001:68-69). This evidence strongly reinforces Mintzberg’s conclusion that strategic planning is not the same as strategic making. Despite its limitations.
Despite the practicality of pragmatism, organizations still tend to pursue formalization because it can promote persuasion and time-saving (Thietart and Forgues, 1995), as well as reducing cognitive dissonance and making managers feel more comfortable (Quinn, 1980). In terms of evaluation, there are strengths and weaknesses. Mintzberg recognized the limitations of traditional planning and emphasized the distinction between strategic planning and strategic thinking. He suggested that managers should pursue adaptive and emergent learning instead of relying on a long-standing formalized system. Furthermore, he proposed the appropriate role for planners as strategy finders, analysts, and catalysts. By comparing classical and processual approaches, Mintzberg strongly recommended incorporating a creative, adaptive, intuitive, and emergent learning process into the formal, rational, systematic, and prescriptive planning system to help organizations achieve competitive advantages (Graetz, 2002) in a turbulent, chaotic, and messy environment (Carter et al., 2008). This balanced consideration shifts the article’s trust from a strongly favored processual approach to a more middle position (Whittington, 2001).
Mintzberg (1987) acknowledged the limitations of individual rationality, recognizing that individuals cannot always anticipate and consider everything in advance. Whittington (2001) added to this by suggesting that organizations favor adaptive rationality over perfect rational strategies. Embracing cognitive bias is advantageous for managers, as it allows them to move away from strict rational planning and instead focus on intuitive learning. Lee (1995) further supported this idea, highlighting that accepting imperfect compromises and making do can lead organizations to develop pragmatic and flexible strategies within the constraints of bounded-rationality.
However, weaknesses are also present in the article by Mintzberg. Firstly, Mintzberg fiercely criticizes conventional classical planning and strongly supports the flexible processual approach (Whittington, 2001:68). He argues that changes are necessary in the conventional planning system. However, this premise may not be suitable in all situations. On one hand, traditional large companies with a tendency for organizational pull often find some forms of planning effective, and neglecting it completely may have long-term disadvantages (Thietart and Forgues, 1995; Lynch, 2000). On the other hand, the emergent theory also has its drawbacks. Firstly, the assertion that emergent strategies must be viable at all times and in all places (Mintzberg, 1994) does not always hold true. Additionally, it is challenging to measure the effectiveness of emergent strategies since there are no initial objectives to set (Campbell et al., 2000). Furthermore, the author lacks concrete examples to support the validity of emergent strategies and fails to provide convincing research (Carr et al., 2004).
Furthermore, Mintzberg’s claim that the classical school did not adapt to the turbulent world is factually incorrect and has received strong criticism from Ansoff (1991:450) who described it as a caricature of his own model. In reality, formal planning systems play a role in risky decision-making, as planning is seen as a means to manage uncertainty (Sinha, 1990). Moreover, Armstrong (1982) argues that planning is particularly important in situations where changes are necessary, and by formalizing the strategic decision-making process, managers establish a “certainty” zone where they can proceed in a rational manner. It is clear that Mintzberg’s first and third assumptions are not sufficiently thorough to support his unconvincing conclusion.
In summary, the article takes a middle ground between Whittington’s classical and processual approaches. Mintzberg, while leaning towards the processual approach, believes that viable strategies should have both emergent and deliberate qualities (Mintzberg, 1994). The article is based on three foundations and also evaluates its strengths and weaknesses. Overall, Mintzberg argues that strategic planning should not rely solely on rigid rules but should also incorporate intuitive learning, making a significant contribution to the field of business strategy.
