Week 21
1)
What are the benefits and
drawbacks of taking an “emergent” approach to strategy making?
2)
Did Honda’s entry strategy
demonstrate the characteristics of “logical incrementalism‟?
Answers
1) A strategy which is always in the process of being articulated
it emerges through a process of learning. An emergent strategy is a pattern of action that develops
over time in an organization in the absence of a specific mission and goals, or
despite a mission and goals.
Emergent Strategy is
a strategy whose final objective is unclear and whose element are developed
during the course of its life, as the strategy proceeds.A perfectly emergent
strategy is characterized by order, but in the absence of intention about it.
It is although difficult to imagine action in the total absence of intention.
Emergent strategy does not mean chaos, but in essence unintended order.
Benefits of emergent strategy:
Flexibility:
Emergent Strategy increase flexibility in a
turbulent environment, allowing the business to respond to threats and exploits
opportunities. Organizations must keep their options open , by not committing
to early actions and investments.
Entrepreneurship:
Emergent strategy is developed for adapting human
needs and continuing to develop overtime. The difficult period gets the best
leadership skills out of the individuals. The best way to find out what will
work is to let people try. This is conductive to an entrepreneurial spirit to emerge.
Learning:
It gives an opportunity for the organization and
the employees to learn from the errors and mistakes .Letting strategy emerge
provides the environment of the organization to learn.
Drawbacks of emergent strategy:
Bad
Planning:
Emergent strategy does not happen by
accident. A corporate strategic plan should allow for the emergence of
potential benefits that were never anticipated. When those benefits are
discovered, an emergent strategy is in place to analyze them and see if the
benefits should be explored further.
Emergent strategy is that its lacking
in planning so that the organization lacks in any sense of strategic direction
and control.
Unclear goals and objectives:
Since emergent strategy is a pattern
of action that develops overtime in an organization in absence of specific
missions and goals. It often has unclear goals and objectives.
Answer : 2
With studying all the case study we can easily say that
Honda’s entry strategy demonstrate the characteristics of logical
incrementalism. Logical incrementalism is a management philosophy which
states that strategies do not come into existence based on a one time decision
but rather, it exists through making small decision that is evaluated
periodically. These small decision are not made randomly but logically through
experiment and learning.
In the case of Honda, they learn from every failure
strategy. Every time it failed it goes for another strategy again and again and
finally that experience helps them to grow in the market.At the very beginning stage of business in U.S, the people
there used to believe the motorcycles are for bad guy or rowdies, so in order
to remove the misconception Honda introduced “You Meet the Nicest People on a
Honda" slogan. Further, they knew that Motorcycle business was seasonal in
U.S and after knowing this some Honda’s motorcycles began to sell but after
some month’s complaint were coming about the machines. They again ran test and
redesign the machine. In such a way Honda continuously scanned the US
motorcycle environment and it was successful in adapting with changes.
For 5 years Honda struggled a lot to get in U.S. markets. As it turns
out, even Honda's larger bikes were not robust enough for American riders and
they started having engine failures. While waiting for the engineers to upgrade
the design, the staff in the U.S. continued to hit the streets. They rode
around doing errands in Los Angeles on Honda's small lightweight bike, the 50cc
Super Cub. The success of the Super Cubs eventually translated into success
with larger bikes, and Honda went from no presence at all in the U.S. market in
1959 to 63% of the market.
The conclusions from the successes of Honda and Grace Manufacturing are
to have humility about what you don't know about an unfamiliar market, to not
over-plan and to stay adaptable to emerging information and circumstances. This
doesn't mean being wishy-washy or directionless. Your objectives must be clear,
but the shape in which success takes shape within them may be quite unexpected.
References:
Abrahamson,
Eric (1996) ‘Management fashion’,Academy of Management Review 21.1: 254-285.
Abbeglen, James C. and George Stalk
Jr. (1985) Kaisha, The Japanese Corporation. New York: Basic Books.
Lessons from Honda's Early Adaptive Strategy, 2011, Available from <
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