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Contents
- Introduction.......................................................................................................................................
- Strategy.............................................................................................................................................
- Strategy Types...................................................................................................................................
- System Thinking.................................................................................................................................
- Strategic Thinking..............................................................................................................................
- Simple and Complex Systems............................................................................................................
- Complex Adaptive Systems................................................................................................................
- Strategy as practice............................................................................................................................
- Conclusion.........................................................................................................................................
Introduction
Establishing and Growing a business in current days became a complicated process because the business environment is more dynamic and complex. Many factors are dynamic and affects directly running the business like political changes, economic changes, social changes, and technological changes. Therefore, running a business in such environments requires paying more attention carefully for all surrounded environment changes, analyzing them well in order plan your business, set directions, and competitive advantage as well accordingly. Management teams are usually responsible for building the strategy for their firms so they have to do a deeply right analysis for their internal (resources, products, finance, budget) and external (market, customers, competitors) environments in order to position their firms in the desired and target position. System thinking and Strategic thinking are very trendy these days, and currently used to get and understand the holistic view of all interconnected systems that surround the business to enable building the right strategies.
Strategy
According to Johnson, Scholes and Whittington (2011), “Strategy is the direction and scope of an organization over the long term which achieves advantage for the organization through its configuration of resources within a changing environment to meet the needs of markets and to fulfill stakeholder expectations”. According to Mulder (2018),”In 1987, the Canadian management scientist Henry Mintzberg distinguished five visions for strategy for organizations. He calls them the 5 P’s of Strategy. They stand for Plan, Pattern, Position, Perspective and Ploy. These five components allow an organization to implement a more effective strategy. A strategy is aimed at the future, concerns the long term and involves different facets of an organization. Competition is always a factor, but it would be a mistake to develop strategies only aimed at competitors. The strategies should also take into account the organizational culture and the other possibilities and developments within an organization”. Strategy is defined, analyzed, and formulated by the management teams to attain and achieve the future goals and objectives of the firm, strategy itself represents a well-defined roadmap of the firm. In order to setup the strategy the management teams should study the
of point of views from different involved people, and interconnecting this problem with other different problems. (‘Wicked Problems’, WICKEDPROBLEMS.COM) We have think systematically in order to stating thinking and go in depth for solving these complex problems, System Thinking (ST) is defined by Reisman and Oral (2005, p. 165) as “basically thinking systemically and paying attention to the dynamic, often nonlinear or stochastic processes of interaction among the resources and the environment within which the system operates”. Also according to Lynch (2020), “ Systems Thinking is an approach to problem solving that comes from systems theory. It is the orientation to or awareness of the whole rather than a singular event or activity. Groups using systems thinking seek to understand the patterns, cycles, or structures an event or activity exists within as a starting place for examining how to improve an event or activity or resolve a problem”. According to Reisman and Oral (2005) there are two approaches for system thinking (ST); the approaches are Hard System thinking (HST) and Soft System Thinking (SST). Soft System Thinking (SST) mainly focus on identifying the correct problem at early stage of process of enquiry; Soft System Methodology (SSM) is a systematic methodology that starts with understanding the vague systems through learning the state of the problem with explicitly desire of improving it. While Hard System Thinking (HST) mainly react to adopt the changes of the environment in favor of the systems’ goals (mostly late stages of problem solving); Hard System Methodology (SSM) is a structured methodology that respond to a well-defined problems. Shifting the minds from analytical thinking (Analytical thinking teaches us "how" and it never teaches us "why" – it gives us the knowledge rather than understanding) into systematical thinking is necessary to get fully understanding about all parts of the systems in order to understand the whole and come up with innovation solutions for the complex problems. for example when we are go to university to learn and study the business, we are not studying the business while we are studying marketing, finance, technology, etc. the idea behind that is understanding the components or parts of the system will help in understanding the whole system. (‘Systems Thinking as taught by Ackoff’, CDOQ)
Strategic Thinking
Strategic thinking is approach that used by the business owners and leaders of the organization to identify the future of their organization, they are examined and analysis internal and external factors that affect running their business and adopting the existing environment changes, and trying to create a sustainable competitive advantage. According to Lynch (2020), “ Strategic Thinking is the ability to focus on the ultimate goal and work
backward to ensure alignment of action to this goal as one plans or resolves problems. Strategic thinking disrupts the incremental pattern of traditional problem solving to open a space for new thinking to thrive. By orienting thinking to longer-terms goals, strategic thinkers ensure the deeper exploration of stakeholders, new alternatives and possibly reexamination of options previously dismissed”. Approaches for strategic thinking has been evolving and changing over the last few decades, the contribution of human agency was neglected (less incorporation of human actions as part of the strategy) and the major concept of the strategy was relying only on the top managers of the organization (top down strategy formulation). In recent years, the strategy outlook has been more mature and allowing to accommodate the interactions and action of human beings in the process of doing the strategy (strategizing), so most of new researches of strategy are adopted “humanized” factor in their definition of the strategy. “Humanized” Factor as part of strategy process that has been discussed through the theory of practice, according to Whittington (2006), there are three elements of theory namely; praxis, practices and practitioners. The definition of each element has been stated by Reckwitz (2002) as follows Firstly, Praxis is “an emphatic term to describe the whole of human action”, Practices are defined as “routinized types of behavior which consist of several elements, Interconnected to one another: forms of bodily activities, forms of mental activities, ‘things’ and their use, a background knowledge in the form of understanding, know-how, states of emotion and motivational knowledge”, And, finally; Practitioners are defined as “the actors; those individuals who draw upon practices to act”. As per strategy as practice field, practitioners are doing the strategy practices through applying their actions, emotions, and behaviors according to learned knowledge and experience from the past. They are also adapting all of these actions, emotions, and behaviors to external factors of their economic and social environments. Strategy practitioners are not only limited to the top managers but include all other employees in the organization at different levels due to their important contribution for achieving the desired results of the orgnazaiopn’s vision and mission. Active strategy practitioners could be involved in different strategy levels for their organization; they can develop, formulate, and implement the corporate strategies (usually done by top management and board of directors), business strategies (done mainly by division managers), and operational strategies (done mainly by supervisors). For example; establishing a training center in one of Europe countries is a corporate strategy, how the training center should compete is a business strategy, how to give the training and how to select the instructors is an operation strategy.
and predict other alternatives to deal with movement until find suitable relations patterns to adopt. The process of predication in complex systems is not easy process but it requires more attention about understanding and continuous learning through repeated strategic and system thinking in order to adopt the environment changes that surround the business. For example, the weather is a complex system and it is not easy to predict it but if we understood the weather patterns through the learning and understanding all related weather aspects then the prediction process will be possible with certain degree of confidence.
Complex Adaptive Systems
The relation or the link between system thinking and complex organizations has been defined by Jacobs (2004) as Complex Adaptive System (CAS), the complex adaptive systems are considered as flexible complex system that are able to adopt their actions and structures according to changes are coming from the internal and external environments. In order to cope with Adaptive Complex System (CAS) effectively, there is need for a proper managerial and leadership styles, According to Uhl-Bien, Marion and McKelvey (2007), There is a leadership framework called Complexity Leadership Theory enables the process of learning, creative, and adaptive capacity of complex adaptive system in knowledge producing organizations, The framework seeks to integrate complexity dynamics and bureaucracy, enabling and coordinating, exploration and exploitation, CAS and hierarchy, and informal emergence and top-down control. This conceptual framework includes three entangled leadership roles (i.e., adaptive leadership, administrative leadership, and enabling leadership) that reflect a dynamic relationship between the bureaucratic, administrative functions of the organization and the emergent, informal dynamics of complex adaptive systems (CAS). Here we can refer to my current employer and how can we consider it as Complex adaptive system; the company usually is dealing with a tough environment changes in proper adaptive way; it was able to adopt the massive changes of local market when the market dropped in Saudi Arabia in (2015) due to drooping oil prices, and reducing the government spending. They developed emergent strategies that mainly focus on building partnership with the government entities during the crisis through building and developing digital solutions that enable these entities to run their work efficiently without acquiring costs, after passing the crisis and market returned to normal, our company became the choice number one for all government entities for developing further digital solutions.
Strategy as practice
According to Pena and Ricart (2015), There are many definitions currently for the strategy, and currently we are facing a significant gap between the theory of strategy and its practices. The science of strategy explains the reasons behind the success or failure of the companies (analyzing different strategy dimensions and perspectives) while practice of strategy focus on identifying the courses of actions that help in solving the problems and getting the benefits of surrounded opportunities. Pena and Ricart (2015) used a concept called (Logical Method – Strategic Logic) in order to close the gap between the strategy theory and practice, as long as the strategy is based on choices, this logic manner is used by the people are making the strategy choices; there are three types of this strategic logic: analytical logic, institutional logic and systemic logic. These types defined by Pena and Ricart (2015) as “The first, analytical logic , tries to understand the reality by focusing on its different elements or variables and establishing causal relations between them; e.g., an increase in customer satisfaction of 10% leads to a 6% increase in market share. The analytical logic uses empirical evidence or estimations of the behavior of variables to reach conclusions. It tells us what we should do at (A) to lead to a determined consequence (B). The second method , institutional logic , considers the characteristics of organizational identity; in other words, it tells us what we should do according to the principles and values of the company. Using this type of logic, the subject asks him or herself: What should a company like ours do in such a situation? The subject reaches a conclusion by connecting the situation to the values and beliefs that compose the identity of the organization and then acting accordingly. It is commonly assumed that strategies are always developed based on analytical logic, but if we investigate what actually occurs in companies, we find that institutional logic is also very frequently employed. The third method, systemic logic , is also frequently employed, despite not always consciously. Systemic logic uses a mixture of experience and intuition to establish holistic explanations of the reality; for example, the key to success in the automotive sector is having a strong brand. Systemic logic goes beyond analytical and institutional logic by focusing on understanding the “whole reality” without being bound by the barriers of quantifiable data or by the characteristics of the organizational identity.” In addition to above mentioned types of strategic logic; there are three frameworks have been developed by Jarratt and Stiles (2010) that explains how the point of views of the corporate leaders and managers on competitive strategy and the environment are different while strategizing in their organizations. Firstly there is a routinized practice where corporate leaders and managers see their future business environment as expansion of the
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