Planned and Emergent Approach Finding a Balance free essay sample

The essay will cover the importance the balance between planned and emergent approach through the framework of game theory/ net value and scenario thinking and planning. It would also incorporate the idea of chaos theory and the importance of understanding the market through certain criteria that have been learned in the course. Introduction to each approach Planned approach is a formalized approach to a strategy; it focuses on control formalization, centralization and inflexibility. Mintzberg, 1994) Organisations are subject to rigid control with no chances of improvisation and learning. Nevertheless planned approach helps marketing in the sense of decomposing and simplifying problems, rationalizing and articulating. It also assists in planning marketing by objectives of the organisation. Planned approach coordinates activities that take into account of the future, control and rationalization. Mintzberg does not agree with the 3 major objective of the planned approach which is to de compose, to rationalize and to articulate. Mintzberg argues that the 3 key objectives have flaws, since it creates no room for learning or improvisation, a reductionist view that creates inflexibility and too coordinated activity to engage in a proactive environment. Planned approach is best suited in a ruled based game since in a rule-based games consists of controlling the market whereby there is a reaction to every action. Emergent approach on the hand focus on learning, innovation and observation, which accepts changes and improvisation of plans and strategy to suit the circumstances faces. MacBeth, 2002) The emergent approach involves minimum control over a situation and emphasizes on learning, adjusting, improvising and innovating according to the situations that an organisation is in. Nevertheless in order for the emergent approach to be affective, it requires a clear business vision. Business vision is required to support ideological control and operational independence to maintain balance and prevent time wastage and cost (Hendrickson, L7 Slide 27). Emergent approach does not indicate that there is no control, or that management has no control over the organisation but rather shows the quality of willing to learn, responsiveness and flexibility. The emergent approach is best suited in a freewheeling-game. Incorporating each approach in marketing planning Marketing planning process can be defined as structure of process that links the mission, organized strategy and business strategy to make marketing decisions and actions. In order to incorporate what type of approach is suitable for a market, we need to identify the type of market. There are 5 definitions for market being, potential market, available market, qualified market, target market and penetrated market. (Wood, 2010) To further summarize the type approach that should be used in a market depends on how stochastic the market is. In a slightly stochastic market, a more planned approach should be adopted while in a more stochastic market, more of the emergent approach should be considered. A hypothesis can be made here by saying â€Å"the more stochastic the market behaviour, the more emergent your approach will need to be†. Hendrickson, L7 Slide 22). Stochastic markets are markets where environmental factors are uncontrollable, complex and dynamic, where market industries and economies are driven by change. One of the factors that determine whether a market is more or less stochastic depends on the macro-environment factors, or known as PESTER (political, economic, social cultural, technological, ecological and religious) affects the markets, making its ever changing and either being planned or stochastic. (Hubbard, Rice and Beamish, 2008). PARTS (player, added value, rules, tactic and scope) also show that it can affect the market conditions thus making a market stochastic. (Nalebuff and Brandenburger, 1995) Furthermore, customer demands can also effect market conditions, since demands are ever changing, competing organizations tend to change strategies in order to compete and suit the new demands, thus making the market ever changing and stochastic. In order to fully utilize the emergent or planned approach, the conditions of the market need to be address first, in terms of it being slightly stochastic or more stochastic. The essence of business success lies in making sure you’re playing the right game†. (Nalebuff and Brandenburger, 1995) Finding a balance point between both approaches There need to be a balanced point in using the 2 approach, the planned approach has to be changed and emergent approach should be used on certain marketing plans, this is because the planned approach is design in an ideal s tand still market, where there is no change in internal and external environments. The emergent approach is best use since market are being more stochastic and the emergent approach has the ability to improvise and create a learning environment that could give and organisation an advantage. To further explain how to locate the balance between the approach Nalebuff and Brandenburger (1995) game theory explains two types of games in the industry, this is the rule-based game and the free-wheeling game. Rule- based game organization tend use the planned approach, since its more focus on controlling the market and every reaction by competitor there is action on others. Free-wheeling games on the other hand create innovation and improvisation since everyone contributes to the game, it offers more opportunities to drive the market, and it’s suited for the emergent approach since it has less rules and loose leadership. In a slightly stochastic market organizations cannot aim at a specific future, so they plan on a range of possible alternative future in order to survive. Here an emergent approach towards planning is used, where there is self-organizing, improvising, making mistakes and learning. It incorporates both emergent and planned approach but more towards planned. Here strategies like scenario thinking and planning is used to reach objectives such as organizational learning. Furthermore organizations have to try to work on uncertainty rather than understanding and controlling which brings balance to the mixed approach in a slightly stochastic market. (De Geus, 1988) Furthermore if the market is very stochastic, organization aims will be unclear so the path followed would also be unclear, so controlled chaos can produce positive returns over a long term period. The emergent approach will be applied here to create new ideas but also using data from the past to compare with current situations, in order to create a new idea that will work in the future. Organizations have to maintain strategic business units and liberate intellectual capital, so that it has a holistic view of the market, which is better than a reductionist view. Greenley, Hooley and Saunders, (2004) stated that there are several factors that can close the gap between the prescriptive marketing planning approach and the practical realities of the tochastic markets that can enable post plan improvisation. These factors are proactive management, innovative management, the organizational learning, market orientation, spare resources and competitive aggression. As a conclusion both approach is used in marketing planning and finding the balance is a vital issue, but the balance depends on the type of market whereby in a more stochastic and free-wheeling market emergent approach is u sed, while in a rule based game, or a more deterministic market the planned approach is favoured. Framework of Game Theory and Scenario Thinking The framework of game theory or also known as net value was introduced by Nalebuff and Brandenburger, it is more dynamic since it assumes the industry is in an ever-changing conditions, its explains interdependency on competitors in an industry and 2 fundamental symmetries are identified in business first being between customers and suppliers and second between substitutors and complementors. By understanding these can help managers come up with new strategies to change the game or create new applications to existing strategies. The net value/ game theory frameworks stimulates creative and innovative thinking, since its best suited in an stochastic market, where there is unpredictable external environment and changing of the game and players is always happening. Game theory also helps organization to answer the question of â€Å"where do we want to go? † thus creating a temporary advantage in the market and making the right move in order to better an organisation in the industry. Scenario thinking is an emergent activity, it describes the possible combination of strategically significant factors and imagining what it would be like to operate in the situation. De Geus, 1988) It’s like creating a scenario in a future game and placing the organisation as a player in that particular game. It focuses more on curiosity and supports an exploratory approach to problem finding and requires three crucial marketing thinking, which are creative, critical and reflective. Creative thinking creates informatio n to finding new and different things. Critical thinking is assessing information that is under considerations and reflective thinking is evaluating the information that has been received. Scenario thinking creates imagining, curiosity, investigative approach and creates a perspective as a player in the game. All these qualities show the importance of an emergent approach in a stochastic market. Scenario planning reflects planned approach to strategy but the results is better emergent strategy; it helps create possible scenarios for the future of the organization. It cultivates management to devise strategies and make plans so the organization survives at its best. Scenario planning allows management to question and share their own assumptions about the future and create their own idea and plans to response to change. Effectiveness of framework to find balance Game theory describes the market as volatile and the internal and external environment tends to change, thus shares a common ground as a stochastic market. Game theory takes into account the action it will be able to take in order to create change for the organization to further have a better position in the market. In such a chaotic market it is difficult to make decisions, thus the importance of creating new emergent models, patience and the management role are very highly valuable in a stochastic market. This goes hand in hand with Macbeth (2002), which agrees that old and new models work closely to achieve success, in the short term, old models with have a more successful edge but with the help of management, emergent models are used to contest the chaos and crisis faced by the business. . Thus shows that Game theory can incorporated both planned and emergent approach, if managers can recognize the needs for such crisis in order to move towards a better positioning in the market. By having balance in the planned and emergent strategy through the Chaos theory enables organization to focus on a destination when markets are highly stochastic and uncertain. In conclusion, Game Theory reflects the uncertainty in the market that can change the market to be less or more stochastic, with the application of chaos theory it can handle crisis management by focusing on learning, innovating, improvising and observing which allows accepting changes and improvising plans and strategy to suit the circumstances. Scenario thinking and scenario planning was introduced by De Geus in 1988, which explains that organizations have to try and work with uncertainty rather than understanding and controlling. De Gues believe in the concept of encouraging people to â€Å"play† within certain boundaries to create a boundary for an uncertain future. This approach requires managers to condition and enable new actions to be made in order to cope with changes and provide appropriate feedback. It also creates thinking and learning that builds the core competency of the organization, without controlling management at an operational level. De Gues also believe that through scenario thinking (creative, critical and reflective) and planning it could influence the organizations thinking and put bounds on uncertainty. It is shown here that by having a balance planned and emergent approach with the help of scenario thinking and learning can build core competencies for the company. It cultivates the idea of management to question them and share their own opinion in regards to change. Basically the thinking and planning scenario shows that the planned approach could still be used but it needs to adapt to the emergent approach being to address the changes at hand but in a certain boundary. As a conclusion, this come back to the issue of the type of market an organisation is in to decide which approach should be more focus on. Nevertheless, the ability to improvise towards a suitable balanced strategy involves flexibility of decision making as stated in Greenley, Hooley and Saunders (2004). The balance of emergent and planned approach is very critical in deciding the future of an organisation so factors such as proactive management, innovation management, organizational learning, market orientation spare resources and competitive aggression need to be considered before deciding on a balanced between the two approaches. 2084 words Reference List De Gues (1988) â€Å"Planning as Learning Harvard Business Review March- April pp 70-74 Greenley, Hooley and Saunders (2004) â€Å"Management processes in Marketing Planning† European Journal of Marketing V38, No. . Hendrickson (2013) Lecture 7 â€Å"The emergent Approach to strategy† University of South Australia: Business Marketing Planning Principles Hubbard G. , Rice J. , Beamish P. , 2008 â€Å"Strategic management: thinking, analysis, action† 3rd Edition Frenchs Forest, N. S. W. : Pearson Education Australia, 2008 MacBeth, D (2002), â€Å"Emergent Strategy in Managing Cooperative Supply Chain Changeâ €  International Journal of Operations and Production Management, v22 (7) pp. 728-740 Mintzberg (1994) â€Å"The Fall and Rise of Strategic Planning† Harvard Business Review, 72(1) Nalebuff amp; Brandenburger (1995) â€Å"The Right Game: Use Game Theory to Shape Strategy† Harvard Business Review, July- August Wood, M B 2010,  Essential guide to marketing planning, 2nd edn, Pearson, Sydney MARK 3009| BMPP Assignment feedback. 2. 0| Assignment 2. 0 – major research essay. Student name:| Key Assessment criteria| Performance on these criteria| Comment| | F2| F1| P2 P1| C| D HD| | 1) Describe the two approaches to strategy. | | | | | (10%)| 2) Explain how the two approaches can assist or impede the marketing planning process.. | | | | | | (20%)| 3) Explain why balance between the two approaches is required, and varies depending on the circumstances. | | | | | | (20%)| 4) Describe and understand the two frameworks i. e. Game Theory and Scenario thinking. | | | | | | (20%)| 5) Compare the effectiveness of the two frameworks in assisting marketers to find a balance between the two approaches. | | | | | | (30%)| | Bad| Poor| Fair| Good| Wow! | | The student understands the content of the course lectures and readings | | | | | | | The student has found extra readings and has explained how they â€Å"fit† with the readings and lectures in the course| | | | | | | The student demonstrates understanding of the topic(s) beyond the course material. | | | | | | | Correct citation of references (Harvard style). All sources have been accurately and truthfully acknowledged. | | | | | | | Appropriate references are used, both in text and in the reference list. | | | | | | | Concepts are clearly expressed and logically connected to support an original opinion. | | | | | | Relevant original examples, real or imaginary. | | | | | | | Creative thinking is evident. | | | | | | | Critical thinking is evident| | | | | | | Reflective thinking is evident| | | | | | | The student has answered the question, and convincingly presented an original opinion in their own words. | | | | | | | The student has demonstrated what they have learned fr om this course. | | | | | | | Correct grammar and spelling. Submission format as in course information booklet. | | | | | | | Summary comment:Assignment grade: Marker:|