It is mutually agreed that the converses of intuition and analysis generate tension during the strategic thinking process. Researchers and contributors to strategic management making the case for logic argue that for strategy to be effective, the strategic thinking process must involve extensive formal analyses and objective collection and processing of data both from within and without the corporation. Rational reasoning enables managers gain an accurate perspective on the different options available before identifying the strategic option that best serves the organization’s cause: achieving its goals and objectives. Logical analysis encompasses assessing internal and external risks, strengths and weaknesses, market need and so on; so that strategy can be thought out to fit each of the above factors.
In contrast to logical thinking, creative thinking involves taking a “leap of imagination” without any logically defined reason for taking such a leap. Creative thinking is a divergence from the rules governing rational argumentation towards problem-solving. Strategic thinking from this perspective is therefore not governed by previous arguments or analyses, but is the generation of action plans using intuition. The strategy thinker will use intuitive judgement to derive a vision for the future. Proponents of this approach argue that it is the best way to define problems and generate innovative solutions since rationality has the potential to frustrate the process of generating novel insight, which, they say, should be the objective of strategic thinking.
Strategic Formation: Is Strategy Deliberate or Emergent?
From the dichotomy of rational versus creative thinking, the paradox of strategy deliberateness versus emergency arises. The deliberate doctrine opines that strategy creation ought to follow a coherent series of steps, a coordination of efforts, strategic resource allocation and utilization and a prior, systematic programming of all processes and activities in the organization. Strategy is a deliberate, systematic attempt to achieve ‘fit’ between an organization’s internal and external strengths weaknesses, threats and opportunities.
The paradox of deliberateness and emergence comes courtesy of the cognitive school of thought. Managers who prefer logic in strategic thinking certainly believe that strategy formation is a deliberate process; whereas those who prefer intuition would go for the opinion that strategy formation is an emergent process. Managers who believe in emergence understand the process of strategy formation as anchored in an organization’s capacity and willingness to stay open to new opportunities or trends, maintaining flexibility to changes in the internal and external environment being able to cognitively discern emerging ideas and concepts and the socio-political and cultural factors; and acting in response. Strategy thus becomes a reactive process. The deliberate school of thought maintains that strategy has to be crafted; that responding to internal and external factors cannot solely be used to provide an organization with a roadmap for achieving its objectives and realizing its vision.
Strategy Renewal: Is change Discontinuous or Evolutionary?
Organizational change is an integral element of the strategy process. ‘Strategy’ aims to outline an organization’s plan for achieving its objectives. Sometimes, there are abrupt changes in the internal and external environment, shifts in production or project implementation life-cycles or changes in organization dynamics. With such eventualities, the organization has to renew its strategy.
The paradox of revolution (discontinuous change) and evolution (continuous change) is occasioned by the two approaches to strategic renewal. Continuous change advocates for an evolutionary approach in increasing productivity and operational efficiency. Continuous change is feasible with emergent strategy formation since change motivators are everyday observed changes or trends in the internal and external environment.
On the contrary, discontinuous (revolutionary) change involves performing a ‘radical surgery’ to an organization’s strategy. Unlike evolutionary strategic change, discontinuous change does not involve continual improvement of an organization’s corporate strategy: strategic renewal is achieved by making distinct transformations from one strategic approach to another.
Whether strategic renewal is achieved through revolutionary or evolutionary change is dependent on specific factors. In project management for example, revolutionary change is a suitable approach since typically, projects have predefined implementation timelines and budgets. Continuous change becomes appropriate when the organization undergoing change wants to maintain or improve its operational efficiency and competitive advantage in the long run. However, when organizations continuously evolve their strategies to maintain a competitive advantage, increase productivity and operational efficiency, counter the effects of changes in the external and external environment and meet changing customer or client requirements, revolutionary change is still unavoidable. Every once in a while, an organization has to initiate revolutionary changes, processes and projects that wholly transform their strategic outlook and business processes.
Critical Application of Dichotomies: Evidence from Organizations
These dichotomies can be seen in the Japanese car maker Honda. Innovation technology is one of the mainly imperative dynamic powers leading Honda’s doing well in change organization. Though, Honda was careful in its investments technology and required to focus in the manufacture of consistent and efficient cars. Strategy used for instance the top use of a sub-contracting scheme had the outcome of Honda developing more precise, affordable and smaller cars than their competitors lead to maintain quality and consistency levels. Though the strong pressure of its organizational culture offered and presents barriers to the enablement of radical change inside Honda which can be seen in the familiar shape, Japanese social networks, dominant organizational management and ethics that Honda has involved in. However, It can be argued that when an organization becomes older the more expected employees turn out to be and therefore additional opposing to both evolutionary and revolutionary change as soon as it in the end occurs in conditions of their adjustment to it. Consequently, the organization need to balance evolutionary and revolutionary change in organizations, therefore it is imperative to be responsive of both the external industry environment in terms of PESTL (political, economic, social, technological and legal) and the internal industry environment fundamentals.
Strategy dichotomies are inherent throughout the strategy process, as key factors driving almost all aspects of said process. This is largely because strategy itself is a dichotomy: in order to be successful, a strategy must be both unique enough to distinguish the company from its competitors, but also familiar enough to attract customers who are comfortable with existing practices in the industry. Striking the right balance between these two is a critical part of the strategy process. A strategy that is too familiar will not break customers away from their existing companies, whilst a strategy that is too unfamiliar will not have any attraction to customers at all, such as the strategy of the fashion website Boo.com, which relied on customers being willing to purchase large amounts of clothes over the internet at a time when the internet was still in its infancy.
Another key area where dichotomies play a significant role is in corporate level strategy, where managers have to decide between the need to be flexible and responsive, and the need to achieve synergy across different actions and operations. For example, in the case of UPS the company relies strongly on synergy ahead of responsiveness. As a result, it took UPS a long time to be able to copy its competitors’ main offerings, such as FedEx’s ability to offer overnight delivery, but when it did it was able to rapidly challenge FedEx due to its ability to sell itself as a coherent provider of logistics services, whilst FedEx’s responsiveness left it operating as a range of separate brands with very little synergy. At the end of the day UPS is falling in the scenario planning, an attempt to get the best world. They are not using formal planning to test their strategic decision by just wanting to see where the future might be. In contrast, in the case of Ferrari the company’s renaissance and re-emergence as a strong manufacturer has been based on significant and responsive changes to the company’s production technology, design philosophy, and manufacturing processes. Finally, one of the main strategic dichotomies, and one that has been examined in greatest deal, is the dichotomy of strategy formation, i.e. whether a strategy should be deliberately planned, or allowed to emerge naturally based on the company’s experience in its environment.
To conclude, from the analysis done in this report, it is evident that strategy dichotomies or the paradoxes arising from strategic thinking, strategy formation and strategy renewal are closely interrelated. They arise due to the diversity in the contexts with which strategy is interpreted and understood. Effective corporate strategizing, it appears, must be conducted by applying opposing perspectives alongside each other. For example, some specific case may call for a combination of logical and creative thinking in strategy formation whereas others may call for logic only. Effective managers should be able to identify which approach will be most effective for each specific case.