Strategic behaviour at the organisational level, states Hynes (2003: 5), provides the context in which strategic thinking can occur. Organisations need to create structures, processes and systems that can foster ongoing strategic dialogue among the top team and staff, and take advantage of the ingenuity and creativity of employees. Stumpf (1989), as in Hynes (2003: 5), indicates that strategic thinking is about the ability to truly know the business and markets, manage sub-unit rivalry, find and overcome threats, stay on strategy, be an entrepreneurial force, and accommodate diversity. Hynes (2003: 5) further maintains that: “The art of the strategic thinker is to be able to generate creative ideas on how to develop the business and to be able to excite other thinkers so that these ideas can be turned into competitive advantage for the firm”. It is further suggested that “the main constituents of strategic thinking centre around: ‘organisational learning, deeply held values and beliefs and formal business learning…” and further stated that: “…the strategic thinker uses a set of mental models about how to grow the business and promote superior performance... these models are underpinned with deeply held values and beliefs…”. Mintzberg (1994), as in Bonn (2001: 63-4) proposes a “clear distinction between strategic thinking and strategic planning …” and further states that “strategic planning is not strategic thinking” and argues that each term focuses on a different stage in the strategy development process. Strategic planning is considered to focus on analysis and deals with the articulation, elaboration and formalisation of existing strategies. Strategic thinking, on the other hand, emphasises synthesis, using intuition and creativity to create “an integrated perspective of the enterprise”. It is further maintained that strategic planning is a process that should occur after strategic thinking. The organisational level provides the context in which individual strategic thinking can occur. Organisations need to create the structures, processes and systems that foster ongoing strategic dialogue among the top team; and take advantage of the ingenuity and creativity of every individual employee. Each of these organisational level elements will be addressed hereafter:
4.3.2.2.1 Strategic dialogue
Eliminating the widespread “we just don’t have the time” syndrome is an important prerequisite for strategic thinking. Ventures need to create the time and space for the owner-management team to engage in dialogue about strategic issues, insights and ideas on a regular basis. Strategic thinking requires owner management teams to learn how to explore complex and conflicting issues together. Collective strategic dialogue – if it is done in a constructive way – takes advantage of the synergistic potential of several minds to be more insightful than a single mind. It goes beyond an individual’s understanding and enables team members to gain a richer grasp of the organisational complexity, leading to new clarity and insight that could not be achieved individually (Bonn, 2001: 66-8).
4.3.2.2.2 Taking advantage of the ingenuity and creativity of employees
In addition to fostering strategic dialogue among the members of the owner-management team, ventures must create an environment in which all employees are encouraged to participate in the development of innovative ideas and strategies. Research by Bonn (2001: 68-9) has found that visionary businesses have a strong organisational orientation. Owner-managers in visionary businesses placed great emphasis on designing organisational structures, processes and mechanisms that stimulated improvements and change. They built their “own unique drive for progress into the very fabric of the business – into goals, strategies, tactics, policies, processes, cultural practices, management behaviours, building layouts, pay systems, accounting systems, job design – into everything that the company does”. In other words, owner-managers in visionary companies designed the context within which employees could contribute to the overall vision of the business and they created a culture that was conducive to creativity and innovation. The challenge for owner-managers is thus to design and establish a work environment where everyone is encouraged to explore new ideas and to come up with improvements and innovations. Owner-managers, who instil a belief in the importance of creativity throughout the business, ensure that creativity becomes part of the business’s personality, the cornerstone of how it operates.
The importance of intrinsic motivation is also emphasised by Bonn (2001: 68-9) who suggests that an employee’s creativity strongly depends on “the desire to work on something for its own sake”. They recommend that ventures take special care “to nurture the intrinsic motivation that gives employees the desire to be creative”. Establishing a business culture that values the ingenuity and creativity of its people will result in employees taking more initiative and having a greater sense of responsibility in their work. They will be more satisfied in their jobs and develop a greater commitment to the business, and ultimately, be more effective and productive.
Strategic decisions at organisational level, according to Rajagopalan, Rasheed and Datta (1993: 277-8), are made in the context of two sets of factors: a business’s environment in terms of its complexity and volatility; and business conditions such as the internal power structure, past performance, past strategy; and, the extent of organisational slack resources that include, for example, excess inputs such as redundant employees, unused capacity, and unnecessary capital expenditures that are used to protect the core of the SMMTE from rapid changes in its external environment, thereby reducing the need to make substantial changes to the operating core of the SMMTE.
Blending strategic thinking and planning together, states Hynes (2003: 18), is a learned practice. The whole purpose of strategy is to create business advantage, to maximise resources, decisions and core competencies. Strategic planning is a process of formalising, when necessary, the consequences of strategies already developed. One point must be emphasised, planning cannot generate strategies, but given viable strategies, it can programme them to make them operational. Owner/managers don’t always need to programme their strategies formally. Sometimes they must leave their strategies flexible, as broad visions, to adapt to a changing environment. Strategic thinking is a means where new perspectives and new combinations, new basis for competition can emerge. Strategic planning is a support mechanism for strategic thinking, enabling processes and procedure to ensure that it is carried out. Strategic thinking seems to emphasise the formulation of strategy within the organisation and strategically planning the implementation of these strategies. In a small firm scenario, the synergistic effect of both elements operating together is what is required, and quite often strategies for the small firm require implementation and action at the same time. It is possible, if
not essential, that the small firm can cultivate flexibility whilst also maintaining a degree of control. The key is for the firm to be committed to a purpose while maintaining flexibility.
Strategic behaviour at individual and organisational level is depicted in Table 4.3. Strategic behaviour can thus be described as utilising the venture’s threats and opportunities to enhance its long-term prospects. A strategic decision is thus defined as a set of critical actions and dynamic factors, at individual and organisational level, beginning with the identification of the stimuli and ending with the specific commitment for action. Strategic behaviour is described as unstructured, irregular and incomprehensive with SMME strategising considered as incremental, sporadic and reactive, overall.
Table 4.3: Characteristics of strategic behaviour
Holistic understanding of the SMMTE and its environment ( issue identification, alternative generation, evaluation and selection).
Creativity.
Individual level:
Vision of the SMMTEs future
Foster on-going strategic dialogue among the internal and external stakeholders (power structure, past performance and strategies, the complexity and volatility of the SMMTE).
Organisational level:
Exploit the ingenuity and creativity of employees (venture size; past strategies; performance; structure; top management team attributes; beliefs; and, the use of organisational slack.).
Source: Rajagopalan, Rasheed and Datta (1993: 277-280), Hynes (2003: 4-5) and Bonn (2001: 64)
The study assumes that the preferred manifestations of strategic behaviour are the end-product of a dynamic interaction between various elements that involve the SMMTE owners’ attributes and the strategic business processes that are utilised. Consequently, an investigation of the relationship between certain SMMTE owner attributes and strategic behaviour will be the basis of this study. It is assumed that some of the preferred strategic behaviour manifestations have a higher likelihood to also translate into preferred final outcomes.