STYLES OF STRATEGIC MANAGEMENT

Goold and Campbell published an important research-based study of styles of strategic management. The desire to give strong leadership from the centre conflicts with the desire to encourage entrepreneurial activity at the business unit level. Styles arise as a result of the way in which the group chief executive determines where the trade-offs have to be made.

A number of possible styles were identified on a matrix of planning influence from the corporate level (high, medium and low), and corporate control influence (flexible, tight strategic and tight financial). Of the nine possible positions on that matrix, three were found in the sample of companies studied. These were labelled strategic planning, with a high planning influence accompanied by flexible control, strategic control, which has medium level planning influence and tight financial control.

There are strengths and weaknesses to each styles, and the authors conclude that the appropriate style is one that fits the situation of the business, and that appropriate matching is an important determinant of business success. In this way it is akin to situational leadership, where the right style is relevant to the situation in which the leader operates. Business factors fall under two headings, those related to the business situation, and those related to the resources in the organisation. Among the former are issues such as the ferocity of the competitive environment, size and length of payback of investments, and the shape of the corporate portfolio.

Among the latter are the financial health of the company, the personality of the chief executive and the skills of senior management. The saying by Campbell and Goold sample, is that the individual differences between chief executives were a greater influence than the differences between business situations.

Strategic Management Styles