Abstract
We might summarize the key conclusion from the first chapter in terms of the following proposition:
The more complex an organizational context, the greater the number and diversity of the state-events with which an organization might be confronted during some period.
The set of all the plans an organization has formulated constitutes a planning structure. As we now want to show, the integrity of any strategic management support system structure is to be adjudged as to the degree of readiness it provides an organization. For readiness reflects the extent to which an organization is prepared to deal —in an adequate and timely way— with the stream of events, problems and situations that it might encounter. Our interest in this chapter is then focussed on the various ways in which organizations might elect to pursue readiness. More particularly, we’ll be looking at the several fundamentally different approaches to strategic planning/positioning that are available to modem organizations, and considering the conditions under which each would become the preferred strategic management platform.
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Notes and References
For an explanation of why this is the case, see my paper: “A Quasi-Empirical Mapping of Optimal Scale of Enterprise”; Management Science (26) 1980.
When we think broadly about such matters, the aggregate implications of secular scarcity, subordination and dependency can be seen to punctuate virtually every aspect of national life. The effects of the first are apparent in terms of the intense and seemingly endless Congressional agonizing about issues of the guns or butter variety, all of which come to an amorphous conceptual focus in terms of the Federal budget deficit, but which also come to a head in pragmatic points that run the gamut from unrepaired pot-holes on national highways to the tearful reportage about holes in the social services safety-net that provide so much of the stuff of local TV news. The other side of the coin is genuine concern not merely about the efficiency of Pentagon allocations, but also about the basic effectiveness of these allocations (the star of the show being the passionate but perhaps ultimately pointless —if not perilous embrace— of that technical chimera called Star Wars, interwoven with the unarguable fact of the shortfall in our ability to sustain conventional combat). And underlying all this are those incidents that sit at the pivot of the transition from military dominance to something less: The twin traumas of Vietnam and the abortive raid into Iran; the death of the Rapid Deployment Force from an overdose of bureaucratic inanity and inter-service adolescence; the massacre of the Marine peace-keeping force in Lebanon; our apparent impotence in the face of Terrorist initiatives; the emptiness of the threat of military counter-measures against the Soviet incursion into Afghanistan, the Cuban presence in Angola or the Iranian and Iraqui adventures against shipping in the Hormuz Straights, etc. On the political dimension, especially in the international arena, there are the signals of the decline of the pax Americana. For whereas simple coercion —actual or promised— was once sufficient to bring geo-political circumstances in line with our national interests, today we increasingly find ourselves reduced to flattery, apology, lamentation, dissemblance, indirection and petulance… all weapons that have no place in the political arsenal of the dominant. In terms of aggregate economic matters, the story of our times is plotted around the gradual transition from effective autarchy (i.e., economic autonomy or presumptive self-sufficiency) to dependency. The tale perhaps begins with the crippling Arab oil embargo of the mid-1970’s, and continues to this day in terms of the escalating general Trade deficit, the dependency of our domestic capital position on inflow of foreign investment, and the admission (mainly in the form of as yet fruitless exhortations) that the welfare of the American economic sector depends to a significant extent on the willingness of European and other nations to move to stimulate their own economies. And beneath all this is the stochastic subplot, the spectre of looming default by third-world debtor nations, and the possible collapse of the core of the American financial system.
There is of course another strategy that some automobile manufacturers have taken that is of some real concern. Particularly, there is the popular move towards defensive diversification. But this is often simply a euphemism for the retreat from more challenging to more tractable, calmer waters where management can get out of harm’s way as it were, e.g.: Building a presence in specialty chemicals or other producer markets where threats from competitors are not of great consequence; attempts to penetrate to third-world regions where political muscle can translate into de-facto monopoly; or attempts to secure sole-source US defense contracts, which usually amounts to the same thing. But this strategy of retreat is really not even original to the automobile firms; they are really merely following the lead taken earlier by Steel, textiles and other basic industries. But such may be merely symptoms of a deep-seated executive malaise that goes way beyond any particular industry. For too much of what is supposed to pass for Strategic thinking in American firms is directed not so much at meeting competitive threats, but in devising ways to escape them. But as we now know well enough, retreat provides only a respite, not a release. And today, more so than ever in our past, what both domestic and international realities seem to be telling American higher-management —in the governmental and military as well as the economic sector— is what a grand master of the ring once told a prospective opponent: “You can run, but you can t hide!”
c.f., any of the following: George Steiner, Top Management Planning (Macmillan, 1969), or his: Strategic Planning: What Every Manager Must Know (Free Press, 1979);
Ewing (ed.), Long-Range Planning for Management (Harper & Row, 1972)
Denning (ed.), Corporate Planning: Selected Concepts (McGraw-Hill, 1971). There are of course also several journals where practitioner-oriented or quasi-academic articles of these subject routinely appear, e.g.: Long Range Planning, Strategic Management Journal, Interfaces, and Managerial Planning.
A more elegant expression the concept of directive correlation explored by Sommerhoff in his “The Abstract Characteristics of Living Systems”, in Emery, ed., Systems Thinking (Penguin Books, 1969).
The most tireless and enthusiastic proponent of a Cybernetic orientation to management was of course Stafford Beer, c.f.: Cybernetics and Management (1959), Decision and Control (1966) or The Brain of the Firm (1972).
A discussion of why this occurs is given in my paper, “System Theoretic Limitations on the Cybernetic Paradigm”, Behavioral Science (20; 3), 1975. But the essential limits of effectiveness of a cybernetic approach might also be approached from another direction. Particularly, from a strict technical perspective, the pursuit of correlation may be taken to be merely a special case of what we earlier referred to as the equilibrium-maintenance orientation for organizations having dominantly tactical vs. strategic positioning requirements. And indeed, the general technical consensus would likely be that cybernetic technology is more appropriate as a basis for controlling middle-management activities in the usual complex enterprise than for managing that enterprise in aggregate.
When operating under a traditional contingency planning approach, being ready for any event is the same thing as being ready for all the events in the contingency set, should they occur simultaneously. Hence the constant complaint about resource scarcity among organizations having critical, contingency-driven missions… e.g., the lament of the US Navy that it’s expected to fight a four ocean war with a two ocean fleet. But each of the several more sophisticated planning/positioning approaches we’ll be discussing in later chapters can be looked at as providing for some sort of avenue of escape from this classic contingency planning quandary.
Albert Clarkson has given a good survey of what Indicator/Warning-Alert technology is intended to accomplish in his Towards Effective Strategic Analysis: New Applications of Information Technology (Westview Press, 1981).
There is, however, one variation on a simple reactive orientation that might be considered as more ingenious than primitive. This is the mail-order house that does not actually produce an item until it has received a sufficient number of (often pre-paid) advance orders (hence the usual alert to allow six-to-eight weeks for delivery). This is perhaps the only really viable expression of an organization designed to evade (or at the least, soften) the tradeoff that finds return positively correlated with risk. Or, as an illustration of a class of enterprise that exhibits the virtues of reactive management, we might take an example in keeping with our earlier concern with the fashion industry. This would be what’s known as a knock-off shop, such equipped to rapidly adjust production facilities to manufacture a stream of imitations of some original design once it has excited some significant degree of market interest.
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© 1989 Kluwer Academic Publishers
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Sutherland, J.W. (1989). Alternative Approaches to Strategic “Readiness”. In: Towards a Strategic Management and Decision Technology. Theory and Decision Library, vol 8. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-0953-3_2
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