Module 1 Notes

When an organizations environment is stable and predictable, strategic planning can provide
enough of a strategy for the organization to gain and maintain success. The executives leading
the organization can simply create a plan and execute it, and they can be confident that their plan
will not be undermined by changes over time. But as the consultants experience shows, only a
few executivessuch as the manager of the Panama Canalenjoy a stable and predictable
situation. Because change affects the strategies of almost all organizations, understanding the
concepts of intended, emergent, and realized strategies is important (Figure 1.2 "Strategic
Planning and Learning: Intended, Emergent, and Realized Strategies"). Also relevant are
deliberate and nonrealized strategies. The relationships among these five concepts are presented
in Figure 1.3 "A Model of Intended, Deliberate, and Realized Strategy".
[1]

Figure 1.2 Strategic Planning and Learning: Intended, Emergent, and Realized Strategies

Thinkstock
Intended and Emergent Strategies
Reproduced with permission from Carpenter, M., Bauer, T., & Erdogan, B. 2011. Principles of
Management. Irvington, NY: Flat World Knowledge.
An intended strategy is the strategy that an organization hopes to execute. Intended strategies are
usually described in detail within an organizations strategic plan. When a strategic plan is
created for a new venture, it is called a business plan. As an undergraduate student at Yale in
1965, Frederick Smith had to complete a business plan for a proposed company as a class
project. His plan described a delivery system that would gain efficiency by routing packages
through a central hub and then pass them to their destinations. A few years later, Smith started
Federal Express (FedEx), a company whose strategy closely followed the plan laid out in his
class project. Today, Frederick Smiths personal wealth has surpassed $2 billion, and FedEx
ranks eighth among the Worlds Most Admired Companies according to Fortune magazine.
Certainly, Smiths intended strategy has worked out far better than even he could have dreamed.
[2]

Emergent strategy has also played a role at Federal Express. An emergent strategy is an
unplanned strategy that arises in response to unexpected opportunities and challenges.
Sometimes emergent strategies result in disasters. In the mid-1980s, FedEx deviated from its
intended strategys focus on package delivery to capitalize on an emerging technology: facsimile
(fax) machines. The firm developed a service called ZapMail that involved documents being sent
electronically via fax machines between FedEx offices and then being delivered to customers
offices. FedEx executives hoped that ZapMail would be a success because it reduced the delivery
time of a document from overnight to just a couple of hours. Unfortunately, however, the
ZapMail system had many technical problems that frustrated customers. Even worse, FedEx
failed to anticipate that many businesses would simply purchase their own fax machines.
ZapMail was shut down before long, and FedEx lost hundreds of millions of dollars following its
failed emergent strategy. In retrospect, FedEx had made a costly mistake by venturing outside of
the domain that was central to its intended strategy: package delivery.
[3]

Emergent strategies can also lead to tremendous success. Southern Bloomer Manufacturing
Company was founded to make underwear for use in prisons and mental hospitals. Many
managers of such institutions believe that the underwear made for retail markets by companies
such as Calvin Klein and Hanes is simply not suitable for the people under their care. Instead,
underwear issued to prisoners needs to be sturdy and durable to withstand the rigors of prison
activities and laundering. To meet these needs, Southern Bloomers began selling underwear
made of heavy cotton fabric.
An unexpected opportunity led Southern Bloomer to go beyond its intended strategy of serving
institutional needs for durable underwear. Just a few years after opening, Southern Bloomers
performance was excellent. It was servicing the needs of about 125 facilities, but unfortunately,
this was creating a vast amount of scrap fabric. An attempt to use the scrap as stuffing for
pillows had failed, so the scrap was being sent to landfills. This was not only wasteful but also
costly.
One day, cofounder Don Sonner visited a gun shop with his son. Sonner had no interest in guns,
but he quickly spotted a potential use for his scrap fabric during this visit. The patches that the
gun shop sold to clean the inside of gun barrels were of poor quality. According to Sonner, when
he saw one of those flimsy woven patches they sold that unraveled when you touched them, I
said, Man, thats what I can do with the scrap fabric. Unlike other gun-cleaning patches, the
patches that Southern Bloomer sold did not give off threads or lint, two by-products that hurt
guns accuracy and reliability. The patches quickly became popular with the military, police
departments, and individual gun enthusiasts. Before long, Southern Bloomer was selling
thousands of pounds of patches per month. A casual trip to a gun store unexpectedly gave rise to
a lucrative emergent strategy.
[4]

Realized Strategy
A realized strategy is the strategy that an organization actually follows. Realized strategies are a
product of a firms intended strategy (i.e., what the firm planned to do), the firms deliberate
strategy (i.e., the parts of the intended strategy that the firm continues to pursue over time), and
its emergent strategy (i.e., what the firm did in reaction to unexpected opportunities and
challenges). In the case of FedEx, the intended strategy devised by its founder many years ago
fast package delivery via a centralized hubremains a primary driver of the firms realized
strategy. For Southern Bloomers Manufacturing Company, realized strategy has been shaped
greatly by both its intended and emergent strategies, which center on underwear and gun-
cleaning patches.
In other cases, firms original intended strategies are long forgotten. A nonrealized strategy
refers to the abandoned parts of the intended strategy. When aspiring author David McConnell
was struggling to sell his books, he decided to offer complimentary perfume as a sales gimmick.
McConnells books never did escape the stench of failure, but his perfumes soon took on the
sweet smell of success. The California Perfume Company was formed to market the perfumes;
this firm evolved into the personal care products juggernaut known today as Avon. For
McConnell, his dream to be a successful writer was a nonrealized strategy, but through Avon, a
successful realized strategy was driven almost entirely by opportunistically capitalizing on
change through emergent strategy.

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When an organizations environment is stable and predictable, strategic planning can provide

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