Learning Objectives
- Learn what is meant by intended and emergent strategies and the differences between them.
- Understand realized strategies and how they are influenced by intended, deliberate, and emergent strategies.
A few years ago, a consultant posed a question to thousands of executives: “Is your industry facing overcapacity and fierce price competition?” All but one said “yes.” The only “no” came from the manager of a unique operation—the Panama Canal! This manager was fortunate to be in charge of a venture whose services are desperately needed by shipping companies and that offers the only simple route linking the Atlantic and Pacific Oceans. The canal’s success could be threatened if transoceanic shipping was to cease or if a new canal were built. Both of these possibilities are extremely remote, however, so the Panama Canal appears to be guaranteed to have many customers for as long as anyone can see into the future.
When an organization’s environment is stable and predictable, strategic planning can provide enough of a strategy for the organization to gain and maintain success. The executives leading the organization can simply create a plan and execute it, and they can be confident that their plan will not be undermined by changes over time. But as the consultant’s experience shows, only a few executives—such as the manager of the Panama Canal—enjoy a stable and predictable situation. Because change affects the strategies of almost all organizations, understanding the concepts of intended, emergent, and realized strategies is important (Table 1.2 “Strategic Planning and Learning: Intended, Emergent, and Realized Strategies”). Also relevant are deliberate and nonrealized strategies. The relationships among these five concepts are presented in Figure 1.3 “A Model of Intended, Deliberate, and Realized Strategy” (Mintzberg & Waters, 1985).
Table 1.2 Strategic Planning and Learning: Intended, Emergent, and Realized Strategies
| Intended Strategy | Emergent Strategy | Realized Strategy |
|---|---|---|
| David McConnell aspired to be a writer. When his books weren’t selling he decided to give out perfume as a gimmick. | The perfumes McConnell gave out with his books were popular, inspiring the foundation of the California Perfume Company. | The company changed its name to Avon in 1939, and its direct marketing system remained popular for decades. Avon is now available online and in retail outlets worldwide. |
| When father and son team Scott and Don Rasmussen were fired from the New England Whalers, they envisioned a cable television network that focused on sports events in the state of Connecticut. | As the network became successful, ESPN has branched out beyond the local softball games and demolition derbies that were first broadcasted. | ESPN is now billed as the worldwide leader in sports, owning several ESPN affiliates as well as production of ESPN magazine, ESPN radio, and broadcasting for ABC. |
| In 1977, a cash-strapped advertiser gave a radio station managed by Lowell Paxson 112 electric can openers to pay off an overdue bill. The can openers were offerend over the air for $9.95 and quickly sold out. | An idea emerged. Soon the radio station featured a regular show called “Suncoast Bargaineers.” In 1982, Paxson and a partner launched the Home Shopping Club on local cable television in Florida. | Today the Home Shopping Network has evolved into a retail powerhours. The company sells tens of thousands of products on television channels in several countries and over the internet. |
Intended and Emergent Strategies
Figure 1.3 A Model of Intended, Deliberate, and Realized Strategy
An intended strategy is the strategy that an organization hopes to execute. Intended strategies are usually described in detail within an organization’s strategic plan. When a strategic plan is created for a new venture, it is called a business plan. As an undergraduate student at Yale in 1965, Frederick Smith had to complete a business plan for a proposed company as a class project. His plan described a delivery system that would gain efficiency by routing packages through a central hub and then pass them to their destinations. A few years later, Smith started Federal Express (FedEx), a company whose strategy closely followed the plan laid out in his class project. Today, Frederick Smith’s personal wealth has surpassed $2 billion, and FedEx ranks eighth among the World’s Most Admired Companies according to Fortune magazine. Certainly, Smith’s intended strategy has worked out far better than even he could have dreamed (Donahoe, 2011; Memphis Business Journal, 2011).
Emergent strategy has also played a role at Federal Express. An emergent strategy is an unplanned strategy that arises in response to unexpected opportunities and challenges. Sometimes emergent strategies result in disasters. In the mid-1980s, FedEx deviated from its intended strategy’s focus on package delivery to capitalize on an emerging technology: facsimile (fax) machines. The firm developed a service called ZapMail that involved documents being sent electronically via fax machines between FedEx offices and then being delivered to customers’ offices. FedEx executives hoped that ZapMail would be a success because it reduced the delivery time of a document from overnight to just a couple of hours. Unfortunately, however, the ZapMail system had many technical problems that frustrated customers. Even worse, FedEx failed to anticipate that many businesses would simply purchase their own fax machines. ZapMail was shut down before long, and FedEx lost hundreds of millions of dollars following its failed emergent strategy. In retrospect, FedEx had made a costly mistake by venturing outside of the domain that was central to its intended strategy: package delivery (Funding Universe).
Emergent strategies can also lead to tremendous success. Southern Bloomer Manufacturing Company was founded to make underwear for use in prisons and mental hospitals. Many managers of such institutions believe that the underwear made for retail markets by companies such as Calvin Klein and Hanes is simply not suitable for the people under their care. Instead, underwear issued to prisoners needs to be sturdy and durable to withstand the rigors of prison activities and laundering. To meet these needs, Southern Bloomers began selling underwear made of heavy cotton fabric.
An unexpected opportunity led Southern Bloomer to go beyond its intended strategy of serving institutional needs for durable underwear. Just a few years after opening, Southern Bloomer’s performance was excellent. It was servicing the needs of about 125 facilities, but unfortunately, this was creating a vast amount of scrap fabric. An attempt to use the scrap as stuffing for pillows had failed, so the scrap was being sent to landfills. This was not only wasteful but also costly.
One day, cofounder Don Sonner visited a gun shop with his son. Sonner had no interest in guns, but he quickly spotted a potential use for his scrap fabric during this visit. The patches that the gun shop sold to clean the inside of gun barrels were of poor quality. According to Sonner, when he “saw one of those flimsy woven patches they sold that unraveled when you touched them, I said, ‘Man, that’s what I can do’” with the scrap fabric. Unlike other gun-cleaning patches, the patches that Southern Bloomer sold did not give off threads or lint, two by-products that hurt guns’ accuracy and reliability. The patches quickly became popular with the military, police departments, and individual gun enthusiasts. Before long, Southern Bloomer was selling thousands of pounds of patches per month. A casual trip to a gun store unexpectedly gave rise to a lucrative emergent strategy (Wells, 2002).
Realized Strategy
A realized strategy is the strategy that an organization actually follows. Realized strategies are a product of a firm’s intended strategy (i.e., what the firm planned to do), the firm’s deliberate strategy (i.e., the parts of the intended strategy that the firm continues to pursue over time), and its emergent strategy (i.e., what the firm did in reaction to unexpected opportunities and challenges). In the case of FedEx, the intended strategy devised by its founder many years ago—fast package delivery via a centralized hub—remains a primary driver of the firm’s realized strategy. For Southern Bloomers Manufacturing Company, realized strategy has been shaped greatly by both its intended and emergent strategies, which center on underwear and gun-cleaning patches.
In other cases, firms’ original intended strategies are long forgotten. A nonrealized strategy refers to the abandoned parts of the intended strategy. When aspiring author David McConnell was struggling to sell his books, he decided to offer complimentary perfume as a sales gimmick. McConnell’s books never did escape the stench of failure, but his perfumes soon took on the sweet smell of success. The California Perfume Company was formed to market the perfumes; this firm evolved into the personal care products juggernaut known today as Avon. For McConnell, his dream to be a successful writer was a nonrealized strategy, but through Avon, a successful realized strategy was driven almost entirely by opportunistically capitalizing on change through emergent strategy.
Strategy at the Movies
The Social Network
Did Harvard University student Mark Zuckerberg set out to build a billion-dollar company with more than six hundred million active users? Not hardly. As shown in 2010’s The Social Network, Zuckerberg’s original concept in 2003 had a dark nature. After being dumped by his girlfriend, a bitter Zuckerberg created a website called “FaceMash” where the attractiveness of young women could be voted on. This evolved first into an online social network called Thefacebook that was for Harvard students only. When the network became surprisingly popular, it then morphed into Facebook, a website open to everyone. Facebook is so pervasive today that it has changed the way we speak, such as the word friend being used as a verb. Ironically, Facebook’s emphasis on connecting with existing and new friends is about as different as it could be from Zuckerberg’s original mean-spirited concept. Certainly, Zuckerberg’s emergent and realized strategies turned out to be far nobler than the intended strategy that began his adventure in entrepreneurship.
The Social Network demonstrates how founder Mark Zuckerberg’s intended strategy gave way to an emergent strategy via the creation of Facebook.
Robert Scoble – Facebook Press Conference – CC BY 2.0.
Key Takeaway
- Most organizations create intended strategies that they hope to follow to be successful. Over time, however, changes in an organization’s situation give rise to new opportunities and challenges. Organizations respond to these changes using emergent strategies. Realized strategies are a product of both intended and realized strategies.
Exercises
- What is the difference between an intended and an emergent strategy?
- Can you think of a company that seems to have abandoned its intended strategy? Why do you suspect it was abandoned?
- Would you describe your career strategy in college to be more deliberate or emergent? Why?
References
Donahoe, J. A. 2011, March 10. Forbes: Fred Smith’s fortune grows to $.21B. Memphis Business Journal. Retrieved from http://www.bizjournals.com/memphis/news/2011/03/10/forbes-fred-smiths-fortune-grows-to.html.
Funding Universe. FedEx Corporation. Retrieved from http://www.fundinguniverse.com/company -histories/FedEx-Corporation-Company-History.html.
Memphis Business Journal. Retrieved from http://www.bizjournals .com/memphis/news/2011/03/03/fortune-fedex-8th-most- admired.html.
Mintzberg, H., & Waters, J. A. 1985. Of strategies, deliberate and emergent. Strategic Management Journal, 6, 257–272.
Wells, K. 2002. Floating off the page: The best stories from the Wall Street Journal’s middle column. New York: Simon & Shuster. Quote from page 97.
FAQs
What are intended emergent and realized strategies? ›
Realized strategies are a product of a firm's intended strategy (i.e., what the firm planned to do), the firm's deliberate strategy (i.e., the parts of the intended strategy that the firm continues to pursue over time), and its emergent strategy (i.e., what the firm did in reaction to unexpected opportunities and ...
Why is it important to understand the difference between intended and realized strategy? ›An intended strategy is the plan at the beginning. A realized strategy is how it worked out at the end. The two are often different because the intended strategy may be of poor quality, or competitors may bring pressure that requires changes in strategy.
What is the difference between intended and emergent strategies? ›Intended strategies are the strategies that an organization hopes to execute. Emergent strategies are strategies implemented by identifying unforeseen outcomes from the execution of strategy and learning to incorporate those unexpected outcomes into future corporate plans.
When a strategy is emergent that refers to a strategy where? ›An emergent strategy is one that arises from unplanned actions and initiatives from within an organization.
What is an example of emergent strategy? ›Examples of emergent strategy in business
The employee notifies their manager and other garment employees about the efficiency, and the manufacturing plant adopts the emergent strategy of using less fabric to make more garments.
Strategic management provides overall direction by developing plans and policies designed to achieve objectives and then allocating resources to implement the plans. Ultimately, strategic management is for organisations to gain a competitive edge over their competitors.
Why is it important to understand the difference between prospective and emergent strategies? ›Prospective strategies encompass traditional strategic plans, which establish important forward-thinking goals and actions. Understanding emergent strategies informs organizations of their competitors' actual, existing strategies and assists in predicting their future actions and reactions.
What might interfere with the realization of an intended strategy explain? ›Intended and Realized Strategies
Many things can happen between the development of the plan and its realization, including (but not limited to): (1) the plan is poorly constructed, (2) competitors undermine the advantages envisioned by the plan, or (3) the plan was good but poorly executed.
A strategic leader influences “the organization by aligning their systems, culture, and organizational structure to ensure consistency with the strategy” (Beatty and Quinn, 2010, p. 7). Influencing employees to voluntarily make decisions that enhance the organization is the most important part of strategic leadership.
What are the aspects of strategy implementation also explain the deliberate and emergent strategies? ›The deliberate and emergent strategies are both important in an organization because deliberate strategies focus on direction and control to get desired things done while emergent strategies open up the notion of strategic learning since it involves responding to an unfolding pattern of action (Mintzberg and Waters, ...
What is an example of an intended strategy? ›
An intended strategy is what you intend to happen a priori to the actions you are choosing to pursue. You try to plan out the long-term goals and action plans. For example, as an individual, you might make a plan to exercise more than 3 days a week, or as a firm, you might plan to introduce one new product every year.
What are the characteristics of an emergent strategy? ›Emergent strategy arises when new ideas come into play; the best ideas become part of the realised strategy. An ideal strategist has these traits: empathy, an understanding of reality, imagination, voice, and vision.
What is an emergent process? ›Emergent processes are non-routine business processes whose execution is guided by the knowledge that emerges during a process instance.
Which company uses emergent strategy? ›Emergent strategy business examples are fairly common and, therefore, easy enough to research. Flickr, Nintendo and PayPal all pivoted to an emergent strategy.
What is intended strategy in strategic management? ›Intended and Emergent Strategies. An intended strategy is the strategy that an organization hopes to execute. Intended strategies are usually described in detail within an organization's strategic plan. When a strategic plan is created for a new venture, it is called a business plan.
What is the most important part of strategic management? ›The most essential element of strategic management revolves around the concept of identifying and understanding specific organization goals. Setting short term goals is an ideal way to start, as they act as a direct blueprint in achieving long term objectives.
What have you learned in strategic management? ›In Strategic Management, you'll learn how you can manage businesses and projects proactively with a focus on long-term strategy, rather than reacting to day-to-day hiccups.
Who is the most important strategist in strategic management? ›Chief Executive Officer: In the management circle, the chief ex-ecutive is the top man, next to the directors of the Board. He occupies the most sensitive post, being held responsible for all aspects of strategic management right from formulation to evaluation of strategy.
What is an example of an intended strategy? ›An intended strategy is what you intend to happen a priori to the actions you are choosing to pursue. You try to plan out the long-term goals and action plans. For example, as an individual, you might make a plan to exercise more than 3 days a week, or as a firm, you might plan to introduce one new product every year.
What are the three components of strategy as described by Chandler? ›There are three important aspects of organizational strategy such as resources, scope and the company's core competency (Johnson, 2016).
What are different types of strategies? ›
- Structuralist. ...
- Differentiation. ...
- Price-skimming. ...
- Acquisition. ...
- Growth. ...
- Focus. ...
- Cross-selling. ...
- Operational.
According to Henry Mintzberg, emergent strategy is a set of actions, or behavior, consistent over time, “a realized pattern [that] was not expressly intended” in the original planning of strategy. The term “emergent strategy” implies that an organization is learning what works in practice.