Ambidexterity of both Emergent and Deliberate Strategy for Organisational Development
View(s):Introduction –
As business leaders, we are forced to look for options to grow businesses. If it’s a public sector organisation, the most important element of the leadership role is defined by the strategic objectives they are assigned by the government to achieve.
Most of the time these objectives are derived from the fiscal policies and operational guidelines set by relevant ministries and institutions which are guiding the organisation in consideration. At the strategic level, while certain government organisations are mandated to provide public services, some are established with the perspective of setting policies and to work as national bodies to set plans and implement them. Amongst all the government organizations there are certain once which cannot depend on the funds made available by the treasury only to spend. Most of the government organisations are allocated budgets only to spend and their targets are set to spend (Eg. National security, Education, Health etc). However, there are certain organisations in the public sector which are required to survive on their own or in other words, they have to make profits to survive.
Therefore, understanding in which context the two concepts are applied is also an important aspect that needs to be set at the outset. Once the context is set it’s a matter of looking at both concepts. Therefore, in order to set the tone for this report, I would choose Lanka SALUSALA Ltd as the context and let me know look at the concepts.
Emergent vs Deliberate Strategies
It was Henry Mintzberg who introduced the two concepts to the business world in 1978 and ever since then there have been many debates on if the strategy should be deliberate (Perspective) or incidental (Emergent).
About the concepts –
Mintzberg defined strategy as a pattern in a stream of decisions. Stacey (2000) looked at strategic management as a process which actively involves in conversations around important emerging issues.
Michel Porter (1996) identified strategy as a process in which the organization develops a position for the organisational products, brands or the whole organisation which was based on his ground breaking strategic contribution which was revolving around the idea of Generic Strategies (Cost Leadershi | Differentiation) etc. Whichever the way strategy is defined, it’s obvious and evident that it has to deal with the environment.
There is no strategy that could be developed and executed to be confined to the internal environment of the organisation as organisations are impacted by the environment and vis-à-vis.
It has been over three decades since Henry Mintzberg (1978) first argued that organisational strategy can be the result of both the intended and the emergent. His ground-breaking work spawned a number of other models that further examined the strategy formulation process.
Mintzberg and Waters (1985) explore the process by which strategies form within organisations. They compare intended strategies (strategies that come from a planning process) with realized strategies (what the organisation actually did). They provide a framework to study the difference between these two concepts through a continuum where at one end lies the completely planned strategy and at the other end lies the completely emergent strategy.
For Mintzberg and Waters (1985) the real-world strategies fall between the two poles of deliberate and emergent strategies. The main types of strategies identified by Mintzberg and Waters (1985) to be applicable within various organisations are the planned strategy, the entrepreneurial strategy, the ideological strategy, the umbrella strategy, the process strategy, the unconnected strategy, the consensus strategy and the imposed strategy.
To qualify each of these strategies as either deliberate or emergent is dependent on various factors like the intention coming from either a single entrepreneur or the top managers or from the consensus of all stakeholders, or even from the external environment. This will clarify the control procedures for implementation of the strategy.
About the practical aspect/ Context
In this context, it’s important to look at the context of SALUSALA again.
Lanka SALUSALA was a profit-making entity which was financially strong and so strong that it could even lend to the treasury and to Sri Lankan Airlines during its hay days. Over a period of time with the introduction of the open economy, the fabric mills which were owned by the Sri Lankan government, went bankrupt. Lanka SALUSALA was the sales arm of these fabric mills’ production and as mills couldn’t sustain the business SALUSALA too had to face certain repercussions. However, SALUSALA still continued as the state-owned apex retail arm of Sri Lanka even in the 1980s. by 1990s, SALUSALA was having more difficulties as the government then reduced import duties of garments and fabrics further.
In the year of 2016 SALUSALA offered a VRS to its employees and 194 employees left the organization under the VRS Scheme. They were happy with the option as SALUSALA was not functioning well. However, even though the government then wanted to wind up SALUSALA, few employees who didn’t want to opt the option of VRS remained in the institution. It was in this backdrop, the current government set mandates to revamp SALUSALA by establishing a new ministry as well.
Therefore, SALUSALA is now relaunched to perform her duties back to the nation. The flagship store of SALUSALA which is located at Jawatta was shut for the last 6 years. Outlet network of close to 30 outlets are not operational. It’s in this backdrop SALUSALA is going to be revamped now in lines with the direction set by the budget-2022 in which it states that the under-utilised and unutilised government assets should be made use in generating revenues, and bringing FDIs to Sri Lanka.
Need of a deliberate strategic approach for SALUSALA
Therefore, SALUSALA needs a deliberate strategic thinking process and a strategic plan to revamp its operations. Business potential is considered as a key element in this aspect. Therefore, it’s evident that perspective/ deliberate strategy is important in the process of revamping SALUSALA due to following reasons.
SALUSALA needs an overall plan to administer the business, generate revenues, generate profits, and at the same time to be in line with national agendas and national priorities. SALUSALA will need to be getting into partnerships and alliances in time to come.
SALUSALA is driven with an ambitious target of generating LKR 2BN sales and LKR 100 MN profits in the year 2022. It also has to work as the retail arm of all the batik and handloom centers which are being opened now around the country. In this aspect following will be taken to consideration.
n Recruitment of staff and getting the carder plan approved by the treasury
n Clearing out all SALUSALA property related matters
n Settling all debts due to be paid to outsiders including government
n Establishing and relaunching SALUSALA for all Sri Lankans and establishing an island-wide network of branches
n Promoting local clothing under the logo of SALUSALA
n Provide raw material for needy sectors
n In addition to a cabinet decision passed authorising supply of any material to any institutions of Sri Lank government to facilitate certain new sectors such as the hospitality sector etc
n New fashion and design development to suit today’s context and starting of new business lines including online channels
Therefore, in order to achieve above identified goals, there is no doubt that a deliberate strategic approach has to be in place for SALUSALA. It needs to be synced into a strategic plan for at least 3 years.
However, as the strategy is executed, there will be opportunities and threats which are spun out of the environment; even internally or externally from both MICRO and MACRO. In order to address them and continue with the deliberation of revamping SALUSALA emergent and incidental approach also is needed. This could be considered as a strategic-duo or as an ambidexterity.
Source : Henry Mintzberg – Emergent vs Deliberate Strategy
Justification of the requirement of emergent or incidental strategies.
As the above plan is implemented there will be external pressure coming from various parties including the suppliers, consumers, government institutions, employees, ex-employees, creditors etc which come up with accusations, issues and problems.
It’s at this point the incidental strategies are important to be taken into consideration. As the National Katina Festival took place, SALUSALA shouldered a considerable portion of its work and SALUSALA developed an Atapirikara (Ashtaparishkara set) to be offered to all the monks by the hands of His Excellency the president. Now SALUSALA is getting a line of orders for Atapirikara products from all government institutions which was not an intended/ deliberated strategy but was an emergent strategy.
As Sri Lanka is facing issues with the increased exchange rates and lack of foreign currencies, the policy makers are pressured to promote local products and production and SALUSALA has an opportunity in the market to join hands with investors and get into manufacturing of fabrics. As the government is promoting, batik and handloom, as the government sales arm of fabrics and apparel, SALUSALA has an excellent opportunity to promote handloom and batik products through a network of outlets.
As there was a concern among the public of not having enough clothing, there is an emergent opportunity for SALUSALA in reinstating its network of outlets and bringing back the glory of SALUSALA by offering quality products at an affordable price with the quality assurance. As the local handloom and batik manufacturers are complaining of not having enough raw material, SALUSALA now got the opportunity to get involved with raw-material which includes, dyes, yarn, wax etc.
There are suppliers of many sectors who are keen to join hands with SALUSALA which are not in the three-year strategic plan for SALUSALA. Therefore, it’s evident that both emergent and deliberate aspects of strategic management is important for this public sector institution to move forward and achieve its objectives and also to support the policy framework of the government in execution of the Vistas of Prosperity and Splendor which includes; A productive individual, happy family, discipline society and a prosperous nation.
Conclusion
Strategies are not meant to be for stuck between reports and books and papers. They are meant to be for execution. They are to be executed and produce outcomes/ results. Strategic thinking without execution is hallucination. Therefore, the existence of both emergent and deliberate aspects of strategies are appreciated in strategy execution and ambidexterity of both emergent and perspective strategies are important for success.
Most of the government sector organisations can be restored and be made profitable if the officials and the employees work with the intention of turning them around instead of playing the blame game and politics inside the organizations.
Organisations are made by people. We have the power to make a visible change. If we are truly committed to serve the country, making organizations profitable will be the best approach than ganging up underw political labels.
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