The classical view of the strategy process as described by Rosemary Harrison (2009: 331) rests on two assumptions:
- that decision-makers have a common purpose and are driven by a shared economic logic when making strategic decisions: all seek to maximize economic rewards and minimize costs for the business;
- that decision-makers systematically ‘collect and sort information about alternative potential solutions, compare each solution against premeditated criteria to assess degree of fit, arrange solutions in order of preference, and make an optimizing choice which they then equally systematically draw up plans to implement’ (Miller et al, 1999: 44).
In practice, decisions are not necessarily ‘arrived at by a step-by-step process which is both logical and linear’ (Miller et al, 1999: 44). People are constrained by ‘human frailties and demands from both within and outside the organization’ (ibid: 45). All decision-making is limited by the bounded rationality of the people involved – their capacity to understand the complexities of the situation they are in and their emotional reactions to it. Harrison (2009: 331) pointed out that: ‘Some of the factors that pull players away from a purely rational approach include confused, excessive, incomplete or unreliable data, incompetent processing or communicating of information, pressures of time, human emotions and differences in individuals’ cognitive processes, mental maps and reasoning capacity’.
It was asserted by Quinn (1980: 33) that it is possible ‘to predict the broad direction but not the precise nature of the ultimate strategy’. He believed that ‘strategy deals not just with the unpredictable but also with the unknowable’ (ibid: 163). Shaun Tyson (1997: 280) pointed out that, realistically, strategy:
- has always been emergent and flexible – it is always about to be, it never exists at the present time;
- is not only realized by formal statements but also comes about by actions and reactions;
- is a description of a future-orientated action that is always directed towards change;
- is conditioned by the management process itself.
But while the limitations of formal strategic planning should be recognized, strategic management still has an important role to play. A systematic approach still has its uses as a means of providing an analytical framework for strategic decision making and as a reference point for monitoring the implementation of strategy. Mintzberg may have expressed doubts about strategic planning but he did not minimize the significance of strategy when he wrote: ‘Strategy making is a process interwoven with all that it takes to manage an organization’ (Mintzberg, 1994: 114).