rise anfall of strategic planning

8/6/2019 Rise Anfall of Strategic Planning

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298 Academy oi Mana gement Review Januarytask structuring, and mechanism s for integration (like coiocation) are alsoincluded in this chapter.For academics or teaching professionals. Figure 3.4 (sources of infor-mation for guiding vision) and Figure 7.5 (project time versus prototypeintegrity) would make a great basis for any lecture on the subject, andthey are worthy of being made into transparencies.My two pet peeves about the book were that it ha s no index (it has onlyendnotes), and the voice of the customer (VOC) was not discussed untilpag e 79.

REFERENCESEttlie, J. E., & Penner-H ahn, J. 1993. High technology ma nufactu ring in low technologyplants . Interfaces, 23(6): 25 -3 7.Ettlie, J. E., & Reza, E. M. 1992. Or gan ization al integra tion an d proce ss inn ovation. Acad-em y of Management Journal, 35: 795-827.

The Rise and Fall of Strategic Planning, by Henry Mintzberg.New York: Free Press, 1994.Reviewed by Noel Capon, Graduate School of Business, Columbia Uni-versity, New York an d Hong Kong University of Science an d Technology.

During the pas t 20 ye ars . Professor M intzberg ha s significantly en-hanced our knowledge of organizations by publishing seminal concep-tual and empirical research on managerial decision making. It will per-ha ps come as no surprise to scholars familiar with his work that, in a bookthat draws on such well-known themes from his previous writings asunrealized and emergent strategies, he does not much care for strategicplanning.The Rise and Fall of Strategic Planning is a substantial piece of work.Professor Mintzberg lays the groundwork for his argument by spendingconsiderable effort in both defining planning and presenting alternativemeanings of strategy. He concludes that "sfrafegic planning cannot besynonymous with strategy formulation" (p. 29) and buttresses this positionwith a description of both the classic (circa 1960s) normative models de-veloped by Ansoff and Steiner, together with several descriptive strategicplanning models. He identif ies four key planning hierarchiesobjectives, budgets, strategies, and programsand concludes that stra-tegic planning in fact com prises three independent ap proac hes a num-bers game geared to motivation and control, capital budgeting, and aprocess that seems to be about strategy making but is largely unspeci-fied. He asser ts that, although this strategy-making process is frequentlydescribed in textbooks and planning manuals, "it is difficult to find sys-


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1996 Book Reviews 299ments and significant anecdotal evidence drawn from business firms,government, and the military regarding the failures of planning withwhich many strategic planning practitioners and academic researcherswould agr ee . These failures include, but are not limited to, its tendency toundermine both creativity and strategic thinking; be inflexible a nd breedresistance to strategic change by generating a c limate of conformity; dis-courage novel ideas in favor of marginal changes and, hence, be short-term versus long-term focused; and foster dysfunctional political activitythat undermines organizational commitment. In addition, his examina-tion of the planning/performance literature leads him to conclude that "anumber of biased researchers set out to prove that planning paid, andcollectively they proved no such thing" (p. 134).Mintzberg argues that strategy making requires insight, creativity, andsynthesis and above all integration, w hereas planning focuses on ana l-ysis and decomposition. He presents empirical evidence that strategymaking occurs irregularly and unexpectedly and is frequently informal(intuitive). He further asserts that strategy cannot be developed to a plan-ning timetable. Plans, he argues, require forecasts, yet not only is fore-casting ever more difficult as environmental turbulence increases, thecoexistence of inflexible plans and environmental change can spell di-saster. Furthermore, planning systems foster the detachment of plannersfrom the day-to-day realities of business life and, as a result, planningtends to rely on hard data of questionable value rather than on qualita-tive insights and the apparently mundane but critical everyday data.Mintzberg is led to the inevitable conclusion that the term strategic plan-ning is an oxymoron.Many of Mintzberg's criticisms of strategic planning practice are valid,but rather than being presented in a balanced, dispassionate, and schol-arly manner in which the failures of strategic plann ing a re set aga inst itsmerits, the read er is faced with over 300 pa ges worth of argum ent, some-what evangelical in tone, directed against strategic planning. This one-sided treatment is regrettable because strategic planning is a criticallyimportant topic for today's corporations.Furthermore, Mintzberg presents no solid evidence that strategic plan-ning p ractice has a trophied; he seems to rely for evidence on a num berofanecdotes and a 1984 Business Week article. Even though at one point heas ser ts that "what all this evidence cries out for is in-depth investigationof planning itself" (p. 105), one of the significant disappointments of thisbook is that, despite his demonstrated ability to conduct high-qualityempirical research, in this volume Professor Mintzberg presents no newempirical findings. The substance is largely drawn from the publishedplan ning literature , much of which, as he readily acknow ledges, is rather"banal."Mintzberg is certainly correct in his assessment that the planning/


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300 Academy of Manag ement Review Januaryperh aps the most substa ntial extant study of planning practice to addres sthis issue (Capon, Farley, & Hulbert, 1988), and a follow-up report (Capon,Farley, & Hulbert, 1994) to which he had prepublication ac cess . In bothstud ies, b ase d on personal interview data from over 100 Fortune 500 man-ufacturing firms, the authors demonstrate performance advantages forthose firms practicing w hat they term corporate- or business -level strate-gic planning versus similar firms practicing corporate- or business-levelfinancial planning.Perhaps even more egregious is Mintzberg's reliance on a biased se-lection of anecdotes with which to make his case. From each of threedomainsbusiness, government, and militaryin which he identifiesplanning failures, he could equally well have identified planning suc-cesses. He focuses on the French government's failure with indicativeplanning, but does he really believe that MITI's planners had no role inthe postwar su ccess of Japane se corporations or that Singapore's s ubs tan-tial economic growth has been achieved in the absence of planning?Certainly, many readers would agree with his assessment that Britisharmy and P entagon plan ners respectively failed at the Battle of Passchen -da ele in World War I and in Vietnam, but would he seriously support theproposition that the successful German advance through Europe in 1940,Montgomery's defeat of Rommel at El Alamein, and the Allies' successfulinvasion of France in 1944 were achieved in the abse nce of planning? Andfor each of his several business cases of strategic planning failure nu-merous counterexamples can be identified; for example, the most ambi-tious restructuring ever of a major corporation, the transformation ofAmerican Can into Primerica, was based on the results of a thoroughstrategic planning exercise.Mintzberg's argum ents ag ainst strategic planning a re bas ed in part onempirical data from his own strategy-tracking studies, in particular thelong-term study of the Steinberg supermarket chain, in which he docu-mented intuitively developed strategy and other findings that show strat-egy as a grass-roots activity, emerging at low levels in the organization.Without denying tha t s trategic decision making in organizations occurs insuch fashions, or as the result of "logical incrementalism," these dataclearly do not confirm the fall of strategic p lann ing in an em pirical se nse.Pe rhap s this w riter is guilty of some combination of "withdraw al, fantasy,and projection" (p. 135), those sins of which Mintzberg accuses the pro-ponents of strategic planning, but it is his cau sal observation from manymeetings with senior executives of major corporations that strategic plan-ning is alive and well, albeit perhaps in a different form than the overlyformalistic approaches of the 1960s and 1970s.In his final chapter. Professor Mintzberg retreats from his acknowl-edged excesses in earlier chapters and presents numerous positive as-pects of planning, plans, and planners. He attempts to balance his


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1996 Book Reviews 301our discussion . . . we never had any intention of dismissing planning."This reader was certainly taken in.In summary, one is left with the uncomfortable feeling that the sub-stance of Mintzberg's book has focused on the straw man of overly for-malistic long-term planning processes and that critical distinctions be-tween long-run and short-run plann ing, formal and less formal p lann ing,corporate- and business-level planning, strategic and financial planning(and their combinations) have been insufficiently sharply made and ex-plored. Notwithstanding the several criticisms in this review, his bookprovides an invaluable resource for those executives and researchersseeking to unders tand the problems, difficulties, and deficiencies of plan-ning processes.Certainly, strategic planning is no panacea, but just as marriage, de-spite its many failures, remains a viable yet adaptive institution, so athorough contemporary empirical study may demonstrate that strategicplan ning also survives robustly in an ever-adap ting form. Professor Mint-zberg and the writer are in agreement on the need for more empiricalresearch; perhaps, some collaborative efforts are in order!

REFERENCESCa pon , N., Farley, J. U., & Hulbert, J. 1988. Corporate strategic plan ning . New York: Colum-bia University Press.Ca pon , N., Farley, J. U.. & Hulbert, J. 1994. Strategic p lan nin g an d finan cial perform ance:More evidence. Journal of Ma nagement Studies, 31: 105-110.


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rise anfall of strategic planning

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