What are the benefits and drawbacks of taking an emergent approach to strategy making?
We have already discussed about emergent approach in my previous blog, basically emergent approach to strategy approach is when the organization respond to the environment changes to prescribe a long term plan.
Emergent approach is very useful as
- It shows what the market is really trying to show , instead of what the company wants the market to be
- It allows flexibility in the organization which is always good is used properly
Its drawbacks are
- A business could forgo a deliberate strategy and rely on an emergent strategy to develop, the odds of such order manifesting from pure, unstructured business activities remains slim
- It does not offer a genuine alternative to more traditional deliberate strategy, especially for new businesses operating on narrow margin
Did Honda entry strategy demonstrate the characteristics of logical incermentalism
Logical incrementalism refers to the process where strategy are developed by learning and experiment . They required partial commitments instead of full on strategies. There are 4 major characteristics of incermentalism
1. Environmental uncertainty :- Constant monitoring of environment to make changes
2. General goals :- Avoiding full commitments during early stage
3. Experiments :- side bets ventures on small scale
4. Co-ordination :- coordinating different emergent strategies
Honda while launching their bike in US managed to demonstrate those characteristics. For example they slowly moved to east of the country over the period of 5years from the west. The constanly made changes along the way to disassociate themselves from the rowdy image. They also did not have any particular goals, but they were there just to have some sales. They also co-ordinate different strategies that they learned along the way. For example they discovered that Japanese engineering , cost factor , arability of spare parts were the reason the people were attracted to Honda bikes. They exploited this advantage by aggressive marketing campaign that they learned from the US
References
Dr Gurutej . 2012. Strategies Choices and Impacts. [ONLINE] Available at: http://fserver.islingtoncollege.edu.np/. [Accessed 24 April 13]