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Over the years, strategy formulation was defined as the key factor that guarantees the lasting developement of a business. However, the way in which strategies are formulated, and more importantly, the nature of the strategy chosen by an organization determines its future position in the marketplace (Grant, 2005). In most companies, strategy formulation is considered an elitist procedure and involves following in the present-day market, increasingly more companies are reviewing these rules. As a result, industry incumbents are either left to transform the way their companies create strategies or surrender their future to these revolutionary challengers.
According to NetMBA (2011), the traditional strategic planning process occurs from top to bottom and consists of a mission, goals and objectives, strategy formulation, execution and control. However, Hamel’s article “Strategy as Revolution” challenges this view by arguing that strategies have to reflect employee’s viewpoints at all levels within the organization, more so those held at tactical and operational levels. According to Hamel, what is needed is not a tweak to the traditional-strategic planning process but a new philosophical foundation: strategy as revolution (Gray, 1996). In accordance to this viewpoint, the author offers ten principles to assist companies towards thinking about the challenges involved in creating truly revolutionary strategies.
In addition, Mintzberg (1994) expounds this concept by stating that there are a number of facets to strategy and that organizations should not be mechanistic in strategy formulation and implementation. Hamel’s fundamental thesis is that strategy development must be viewed as a radical action within a company. His basis is that a revolution is necessary, especially in an era where incremental change is not sufficient in securing a solid position in the marketplace. He uses examples such as Dell, The Body Shop, and IKEA to establish that radical views are necessary in finding and establishing new market places. The author summarizes the elements that encompass a good strategy are subversion, power to the people and imagination. In essence, these three attributes point to the notion that a strategy does not come from the top business management.
Hamel views imagination as another key attribute to successful strategy development. A manager must therefore imagine different futures and pathways in order to transform his/her thinking. He convincingly argues that deeply engrained within every company are strategy revolutionaries, and that every manager or CEO needs to reflect more profoundly on how to identify, manage and nurture these revolutionaries to become an essential part of the company’s strategic processes. The article categorizes the three major identifiers as facilitation, communication and corporate surveillance. Communication implies the ability for revolutionaries to understand and explain their ideas. Facilitation implies that they have the ability to manage and guide groups as their plan is being worked out and put into operation. Finally, corporate surveillance implies that they understand the company’s power structure, the limitation and depth of the company management as well as the company’s perception of problems.
Whittington (2001) highlighted four approaches to strategic management. These are classical, processual, evolutionary, and systematic approaches. The article adopts an evolutionary strategic management standpoint as this approach attempts to speed up strategy development by breaking it into smaller changes. In the global market place, the business environment changes too quickly and unpredictably for long-term planning processes to address efficiently. Though not optimal for a specific environment, Evolutionary approaches allow organizations greater flexibility in adapting to unexpected change.
The article offers an emergent approach to strategy. Unlike the prescriptive approach which regards strategy development as a systemized and deterministic process, Hamel emphasizes that strategies may be extemporaneous and can develop incrementally to adapt to changing reality. This model’s emphasis is on the importance of knowledge as a basis for organizational competence and gaining considerable advantage in the world market. This results in a more creative and responsive strategy making that is well suited to today’s unpredictable and hyper-competitive environment. To prove this, Hamel points out that some of the most successful companies in the world, such as Dell Computer and Swatch, have been hugely successful because they do not tie themselves down to predetermined plans or goals and objectives.
The emergent approach is more suited to instigating positive, radical organizational change such as restructuring or diversification. Additionally, it has the benefits of challenging the status quo as well as reducing the resistance to change, thereby allowing employee support. However, when strategy formulation and implementation occur at the same time, the development process may run slowly. It implies that some significant opportunities cannot be reached and the conflicting objectives from different groups may hinder strategy development. Due to the lack of strict analysis and precise targets, objectives may be unclear and there may be no actual basis for performance evaluation.
The strengths of the article can be defined as a means of promoting a different understanding of the role and importance of core competencies without being limited to industry norms and assumptions. Hamel proposes a hybrid approach that seeks to advance the understanding of the strategy fit approach while at the same time making use of the entrepreneurial qualities within the organization. An additional strength of the above approach is that the author provides numerous examples that help illustrate the theoretical propositions of his argument. Consequently, the author is able to exemplify the practical implications of how core competencies can be understood in practice.
The main weaknesses of this article relate to the assumptions made regarding how companies are able to transform their product capabilities and knowledge into core competencies. The proposed model is prescriptive but does not elaborate the complexities regarding the manipulation of the knowledge by organization employees. It can, therefore, be argued that the article needed to make the limitations of its argument more explicit and how core competencies may not be easily achievable despite a company’s effort to manipulate its people and knowledge resources. Intentionally or not, the ‘strategy-as-revolution ‘approach positions itself is a problem-solving tool for the managerial elite. It does not emphasize on the different ways in which way outsiders and strangers might influence strategy in practice.
With corporate alertness emerges as a prerequisite for organizations’ success, this article successfully provides a strategic framework that allows companies to be fast, agile and responsive in a rapidly changing environment. In order for companies to establish and maintain strong leadership positions in a global marketplace, they must evolve with the shifting conditions and develop strategies that capitalize on the emerging opportunities. Despite the several drawbacks stated above, the article’s main point was proven by practical real case studies.