Henry
Mintzberg presented four reasons for making strategies. These are to set
direction, focus effort, define the organization, and provide consistency. Also
why organizations need strategies and why they don’t. Now we will discuss all
of these in detail.

 

1. Setting Direction

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According
to most commentators, organizations need strategy to set direction for
themselves and to trick other competitors. If the strategy is good then the
organization can even start from a weaker position and still come out on top.
All these assumptions results in that the competitor with better strategy will
win. A better strategist can make a better strategy which can lead to a great
victory. Indeed an overdose of strategic thinking can make it difficult to be
effective in the operations which is exactly what happened on the titanic. It
is better to have a good strategy, being all things equal. But all things are
never equal.

Moreover
we can assume that any strategy is always better than none. Consider an oil
company executive in 1973, just as the price of oil went up by a factor of
four. When strategy (as plan) should he have pursued when his whole world was
suddenly upsetting oneself on a predetermined course in unknown waters is the
perfect way to sail straight into an iceberg. Sometimes it is better to move
slowly, a little bit at a time, looking not too far ahead but very carefully,
so that behavior can be shifted on a moment’s notice.

           

2. Focusing Effort

            The second aspect is focusing
effort. It states that strategy is needed to focus effort and promote
coordination of activity. Without strategy organization is collection of
individuals, each going his or her own way, or else looking for something to
do. The main purpose of organization is collective action. One thing that merge
or bound individuals together is strategy. By focusing effort and directing the
attention of each part toward the target, the organization runs a risk of being
unable to change its strategy when it has to.

  

3. Defining the organization

Third
reason states that organization need strategy to define itself. Strategy not
only direct the people’s attentions working inside the organization but it also
give the organization a meaning to be recognized by outsiders. It provides the
people a shorthand way to understand the organization and to differentiate it
from others. A clear articulated strategy becomes a surrogate for that
understanding.

                 On the other hand, the
enthusiasm generated by a clear strategy – a clear sense of mission can
produced a host of positive benefits i.e. the stock analysts not only helped to
raise GE’s stock price, they also helped to fire up the enthusiasm of the