Strategy Typology
Please refer to: Livvarcin, O. (2007).
"An
Exploratory Study on Strategy Direction And Strategy Magnitude in
Organizations: The Strategy Vector Model",
PhD Thesis Dissertation, Yeditepe University, Turkey.
Strategic typologies which might be called
as theories of different strategy types (Smith, Guthrie, and Chen,
1986), has emerged as an important research area in strategic management
(Mintzberg, 1973; Miles and Snow, 1978; Porter, 1980a; Conant, Mokwa and
Varadarajan, 1990)
Miles and Snow (1978) established a
research on the strategies that organizations employ in solving their
entrepreneurial, engineering, and administrative problems (Miles et al.,
1978). Although similar typologies of various aspects of organizational
behavior (Anderson and Frank, 1975, Ansoff, 1962, Rogers, 1971, Segal,
1974) were already available in the literature, they developed their own
famous strategic typology and introduced four strategic types of
organizations: Defenders, Analyzers, Prospector, and Reactors (Miles and
Snow, 1978).
Miles and Snow’s Strategy Typology
According to their study (Miles et al.,
1978, p.20-23):
The defender deliberately
enacts and maintains an environment for which a stable form of
organization is appropriate. Stability is chiefly achieved by the
Defender’s definition of, and solution to, its entrepreneurial problem.
In many ways, Prospectors
respond to their environment in a manner that is almost the opposite of
the defender. The prospector enacts an environment that is more dynamic
than those of other types of organizations within the same industry.
The Analyzer is a unique
combination of the prospector and defender types and represents a viable
alternative to these other alternatives. A true analyzer is an
organization that attempts to minimize risk while maximizing the
opportunity for profit. Analyzer combines the strengths of both the
Prospector and the defender.
The Reactor exhibits a
pattern of adjustment to its environment that is both inconsistent and
unstable; this type lacks a set of response mechanisms which it can
consistently put into effect when faced with a changing environment.
Miles and Snow (1978) strategy types where
arrayed along a continuum, with defender at one end and prospector at
the other (Cited in Golden, 1997). In contrast, Fox’s (1992) measure was
based on four 7-points scales that indicated the extent to which each of
the banks exhibit characteristics of each of the Miles and Snow (1978)
four strategy types (Cited in Golden, 1997).
Miles et al. (1978) claimed that three of
the strategic types of organizations are essential: defenders,
analyzers, and prospectors. The fourth type of organization encountered
in their study which is called as reactor, is basically considered as a
form of strategic “failure” in that inconsistencies exist among its
strategy, technology, structure, and process (Miles et al., 1978). This
classification is demonstrated in the Figure.
Miles and Snow’s Strategy Typology (Derived from Miles
and Snow, 1978 and Miles et al., 1978 and adopted from Livvarcin, 2007)
Porter’s Strategy Typology
Another strategy
typology that is popular in the literature is known as “Porter’s model”.
According to Porter's framework, a business can maximize performance
either by striving to be the low cost producer in an industry or by
differentiating its line of products or services from those of other
businesses; either of these two approaches can be accompanied by a focus
of organizational efforts on a given segment of the market (Parnell,
2002). Porter’s strategy typology is demonstrated in Figure 2.
Porter’s Strategy Typology (Adopted from Porter 1980ab)
New Venture Generic Strategy Framework
Robinson, McDougall and Herron (1988) also
develop their own strategy typology (which actually resembles the
strategy typology of Porter, 1980) and they claimed that venture
strategies can be divided along two basic strategic dimensions: growth
orientation and product/market focus. They also suggest a simple, basic
framework that provides a way to integrate and organize past and future
new venture strategy research which is demonstrated in Figure 3.
New Venture Generic Strategy Framework (Adopted from
Robinson, McDougall, and Herron, 1988)
Miles and Snow (1978) classification of
defenders, reactors, analyzers, and prospectors appears to be a
classification of firms, while Porter’s (1980) differentiation, focus
and cost leadership may be seen as a classification of strategies
(Pecotich, Purdie, and Hattie, 2003).
Livvarcin's Strategy
Vector Model (2007)
The strategy vector model
has three bottom lines.
1. Strategies of
individuals could be expressed as vectors with specific direction and
magnitude and those vectors might be measured.
Livvarcin's Strategy
Vector Model (Livvarcin, 2007)
2. The strategy vector of an
organization could be calculated by summing the strategy vectors of
individuals.
Livvarcin's Strategy
Vector Model (Livvarcin, 2007)
3. Locating the individual strategy
vectors on the formal organizational chart and comparing aimed and
measured strategy vectors might help us to address certain strategic
problems and perceive the organizational strategic performance and
strategic status.
Livvarcin's Strategy
Vector Model (Livvarcin, 2007)
References:
Livvarcin, O. (2007).
"An
Exploratory Study on Strategy Direction And Strategy Magnitude in
Organizations: The Strategy Vector Model",
PhD Thesis Dissertation, Yeditepe University, Turkey. |
