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Alternative approaches to strategy development

The rational/formal approach and

uncertainty

1.1 The rational/formal approach

While the rational/formal model of strategy (covered in the previous chapter) is a
well-recognised approach, not all organisations will adopt this approach. The rational
approach is not suitable for all types of organisations and all circumstances. There
are alternative approaches to strategy development which many organisations favour
and these will be covered in this chapter.

1.2 Advantages of the rational/formal approach

 Long term view – it avoids organisations focusing on short term
results.

 Identifies key strategic issues – it makes management more
proactive.

 Goal congruence – it ensures that the whole of the organisation is
working towards the same goals.

 Communicates responsibility – everyone within the organisation
can be made aware of what is required from them.

 Co-ordinates SBUs – it helps business units to work together.

 Security for stakeholders – it demonstrates to stakeholders that
the organisation has a clear idea of where it is going.

 Basis for strategic control – clear targets and reports enabling
success of the strategy to be reviewed.

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