Strategy Process: Intended Versus Realised

Digital Marketing - Study Notes:

Strategy process: Intended versus realized

One approach to strategy is called the design approach. The design approach to strategy views strategic decision-making as a logical process in which strategy is formulated through rational analysis of the organization’s performance and external environment.

However, in reality, the process of strategy development is less structured and more diffused, with the division between formulation and implementation being less apparent.

Mintzberg (1987) defines ‘intended strategy’ as the strategy that’s conceived of by the top management team. Even in this instance, rationality is limited. The intended strategy is the result of a process of negotiation, bargaining, and compromise involving many individuals and groups within the organization.

However, a ‘realized strategy’ tends to be only a fraction of the intended strategy. The primary determinant of an organization’s realized strategy is the ‘emergent strategy’: the patterns of decisions that emerged from individual managers adapting to changing external circumstances, and the ways in which the intended strategy was interpreted.

Let’s look at a non-business example of the intricacies between these three strategies. Consider the example of Mark Lowe, who studied linguistics with the intention of becoming a writer of fiction novels and books. Shortly after graduating, he realized that writing a novel required more time than he had anticipated, and it wouldn't provide him with the financial security he desired. This realization led him to decide to utilize his writing skills in journalism instead. As he gained expertise in journalism and developed an authoritative voice, Mark decided to write books on various non-fiction topics related to his work in journalism. This shift in strategy allowed him to generate a stable income and achieve financial security.

In Mark’s case, the intended strategy was for Mark to become a writer of fiction. However, the emergent strategy emerged when he realized the challenges and limitations associated with that path, so he pursued a career in journalism. A natural continuation of this emergent strategy was that he started writing non-fiction books on topics related to his work in journalism, which is now his realized strategy.

So an organization starts with an intended, or ideal, strategy. As circumstances change, this evolves into an emergent strategy, which ultimately becomes the realized, or actual, strategy. For example, in the car manufacturing industry, the intended strategy has always involved the combustion engine. External circumstances such as political, social, and legal changes have had to be considered as governments and societies reacted to climate change. This has driven a reconstitution of strategy towards other technologies such as electric and hydrogen-powered engines.

Google’s announcement of moving away from using third-party cookies to track users is another example of an intended and emergent strategy. Google had a long-term goal of improving user privacy, which was accelerated by the passing of many legislations and regulations on user tracking. This was one of the reasons Google started deploying machine learning algorithms to better understand its users and phasing down the reliance on third-party cookies, which is one of the defining features of GA4.