Evaluate the contribution of Mintzberg’s concept of 5 Ps for strategic thinking, illustrating your answer with appropriate examples.
Mintzberg (1989) has suggested the 10 different schools of thought for strategy. In the 10 schools of thoughts, they are categorized into two major approaches to strategy; one is the Prescriptive approach while another is the Descriptive approach. The Prescriptive approach focusses on the formulation of strategy in intended manner while the Descriptive approach views strategy on the basis which they were form, one of the ways is to analyse an emerging pattern based upon the intended strategies. In order to define strategy in detail, Mintzberg (1987a) state that strategies have to be defined in different ways as to achieve full comprehension of its implications. Therefore, the 5 Ps were presented as definitions of strategy in Mintzberg’s point of view.
Each of the 5 Ps comprising aspects concerning strategy. According to Mintzberg, the 5 Ps are Plan, Ploy, Pattern, Position and Perspective. Mintzberg stated that none of the Ps “take precedence over the others and could be inter relatable and complement each other”. To view strategy as a Plan refers to how strategies are often intended to be, or the formation of strategy. In Mintzberg’s own words, Plan is “a consciously intended course of action”. Ploy, can be recognized a sub-plan of a strategy. Ploy can originate from the initial plan. A ploy refers to a tactic conducted by an organization to outwit its competitors. Strategy as a pattern is based on the result of the company’s Plan and Ploy put together.
A pattern emerges as a result of realized strategies. To view strategy as a pattern means understanding the external environment of which an organization is placed in. Strategy as a pattern allows the management to analyse the market of which the organization is in or chooses to be in. Porter’s Five Forces Analysis is a common tool to seek understanding of the business environment (Porter, 1979). Perspective is a direct opposite of the Position. The Perspective definition refers to an organizations internal culture; it is about how the organization perceives itself to be.
As the definitions of 5 Ps have elaborated, the importance strategies based on the concepts of the 5 Ps will be analysed. Having a strategy according to Mintzberg (1987b) is vital in order for “outsiders” to understand the organization and also for the organization to make objectives. By formulating strategies, the companies will able to achieve consistency in their structure. While the advantages of having strategies are clear, strategies can also brought ill effects to an organization. While strategy allowed an organization to chart their path, it is dangerous because planning to far ahead may lead to unforeseen dangers which may affect the company. When strategy provides a set of consistency in structure, it can cause the organization to succumb to groupthink and also lacking of creativity due to readily structured plans.
In order to understand an organization through strategy can be misleading as the stereotyping may occur which may be a result of over-simplification. The advantages and disadvantages regarding strategy are elaborated from Mintzberg’s point of view. While the 5 Ps remained as generic tool to understand strategy, there have situations where it cannot cope due to inconsistencies. One way to show the lack of capabilities of the 5 Ps in defining strategy is through the arguments by Mintzberg and Ansoff. As recommendation to his criticisms, Mintzberg advocated emergent strategies to account for unforeseen circumstances and environmental changes. Mintzberg (1985) suggested that emergent strategies and intended strategies are located at two ends of a continuum and that strategies of most companies often rely on both ends of the continuum.
A common example which is quoted by Mintzberg is the case of Honda and its initial plan to expand its 250cc motorcycle market in the United States, but due to unforeseen circumstances, the plan failed but an emergent plan was conceived. This emergent plan was to sell 50cc motorcycles which became a success. Mintzberg attributed their success to Honda’s status as a learning organization which enables them to react to the pattern of their strategies effectively. The Emergent concept is not only promoted by Mintzberg but also from the research of Quinn (1978). Quinn’s work regarding Logical Incrementalism proposed that organizations should practice a step by step approach in strategy formulation. This can be also aligned to the way an organization makes its strategy implicit as opposed to explicit (Quinn 1979). Organizations announce explicit goals often find themselves too focussed which reduces their capabilities to adapt.
Therefore, Quinn recommends a strategy which is formulated in an incremental fashion upon a trial and error process. The whole concept of Logical Incrementalism shares similar values to the theory of emergent strategy promoted by Mintzberg. In the 2nd debate, which Ansoff (1991) from the Planning School responded in defence of the Design School and the overall prescriptive approach towards strategy, Ansoff has claimed that Mintzberg was “factually contradicting” in many of his accusations towards the Design School. Putting this aside as it is irrelevant to the context of this essay, Ansoff claimed that the concept of trial and error as suggested by Mintzberg and Quinn to be costly and of high risk to organizations especially during circumstances such as business diversification. An error to the trial process may incur time and financial investments, as such making the company losing out to their competitors. Ansoff also claim that the definitions of strategy use by Mintzberg are inconsistent with the definitions which are being put in practice. Mintzberg define strategy in a descriptive manner but in practice by companies is the prescriptive form of strategy.
Therefore, Mintzberg’s arguments have claimed to be invalid because of the improper application of his strategies in a highly “turbulent” market. While Ansoff is not reject the notion of incremental learning, or emergent theories just as Mintzberg does not reject the notions of deliberate and intended strategies and their formulation, Ansoff concludes that it’s the application which matters. Emergent strategies are suggested more suitable for companies in stable position and environment which allowing these organizations the opportunity to use sequential trial and error for improvisation purposes. While for most conventional business which as described by Ansoff, placed in a turbulent environment, it is best to allow an explicit strategy to guide the organization, although not totally rejecting the need for implicit strategies in long-term goal settings.
At the ending of the debate, Mintzberg argued while rationality does assist a company’s strategies to an extent, what is more important is to how a company learn along the way through practical situations rather than formulation of plans to anticipate circumstances. The debate does provide a picture as to how the definition of strategies provided by Mintzberg’s 5Ps unable to cope with the various school of thoughts, especially Pattern. While both Mintzberg and Ansoff admit the importance of Planning, it is their perspectives as to which Pattern to follow in planning. Mintzberg’s descriptive approach and suggests that learning is to be conducted by analysing results as a pattern and proceed with an emergent plan, while Ansoff’s Planning School prescribes a plan to anticipate circumstances and systems to avoid and solve these circumstances.