Mintzberg (1978)

[Aron Eugine]

Goodstrategy is made up of diagnosing situations correctly, adopting an overall policy for dealing with the problems and opportunities identified by the diagnosis, and finally coordinating a set of steps that support this policy. Poor strategy does not follow this process, or does it badly.

Strategy means focus and therefore choice. Choice means that some goals are set aside in the favor of others - it is about choosing what to do and what not to do. When such deliberate choices are not made, the result is a poor strategy.

Strategy: consistent behaviors by which the place in the environment is established. Strategic change: responses to environmental change, limited by the bureaucracy and mediated by leadership.

Unrealized strategies are intended strategies that do not get realized, perhaps because of unrealistic expectations, misjudgments about the environment, or changes in the environment.

For a strategy to be fully emergent, there must be order, i.e., consistency of action over time, even if there is no intention behind it (Mintzberg and Waters 1985). However, it is hard to imagine actions without intention in any part of the organization. Thus, it can be assumed that a purely emergent strategy is as rare as a purely intentional strategy.

Consequently, a strategy cannot be a fixed plan, nor does it change systematically at a predetermined time solely at the will of management (e.g., as a result of strategy deviations). Similarly, contingency planning, a popular prescription in times of environmental turmoil, can be risky because plans can tend to come to fruition whether they are needed or not. And so sometimes it can also be risky to make strategy explicit, especially in an uncertain environment with a dominant organizational operating system tending towards stability (Mintzberg 1978).

Mintzberg (1978) instead highlights that strategy formation is not a one-size-fits-all process. Rather, it involves various approaches and patterns, including entrepreneurial, adaptive, planning, and logical incrementalism.

Consequently, strategy formation is not limited to formal processes or boardroom decisions. Informal interactions, serendipity, and learning from experience play a significant role. Likewise, aligning organizational actions with formulated strategies can be complex and may require ongoing adjustment.

Strategists are not only planners or visionaries; they are also learners and pattern recognisers. They manage a process in which strategies/visions can emerge as well as be deliberately conceived. They are open minded, sensitive to experience and learn about their organisations/industries through personal involvement.

Like potters at the wheel, organizations must make sense of the past if they hope to manage the future. Only by coming to understand the patterns that form in their own behavior do they get to know their capabilities and their potential. Thus crafting stategy, like managing craft, requires a natural synthesis of future, present and past. Mintzberg (1987)

A realized strategy can be the result of a deliberate process involving formulation followed by successful implementation. However, it can also emerge as an adaptive response to evolving circumstances.

Achieving effective strategy making requires a balance between learning and responsiveness on one hand and maintaining a level of control on the other. Therefore, in practice, strategy making often blends deliberate and emergent strategies to strike this balance.

Often strategies originate at lower organizational levels, nurtured by individuals with both technical expertise and a deep understanding of the on-ground realities. With the right resources and a capacity for learning, these locally generated strategies evolve into collective and organizational approaches.

While conventional wisdom suggests continuous adaptation, strategy inherently seeks to establish stability. Organisations pursue a given strategic orientation for most of the time, as they achieve success not by changing strategies, but by exploiting the ones they have. However, when that strategic orientation grows out of sync with its environment over time, revolutionary change must take place. The organisation quickly alters many of its established patterns, as it tries to leap/shift to a new position of stability.

Strategic thinking relies on a deep understanding of the business and the creativity to harness that knowledge. Those with this expertise often notice things others miss and seize emerging opportunities.

Effective strategy management hinges on the ability to identify emerging patterns and support their development. This might involve creating flexible structures, hiring innovative talent, defining overarching strategies, and observing evolving patterns.

New patterns should be held in check until the organization is prepared for a significant strategic shift. Moreover, understanding past experiences is essential for navigating the future effectively. Crafting strategy, much like managing a craft, involves synthesizing the past, present, and future.

This TWOG was first posted on 21 November, when @mintzberg141 had about 2000 followers. Now that number is approaching 7500, so this will be new to most of you and hopefully worth a revisit for some of the rest.

This paper aims to contribute knowledge relating to the role of AI in marketing strategy formulation and explores the potential avenues for future use of AI in the strategic marketing process. This is explored through the lens of contingency theory, and additionally, findings are expressed using the Gartner analytics ascendancy model.

Today new data is rapidly created, forming potential input for strategy formation (Bharadwaj, 2018). This abundant data availability brings its own set of complexities. The strategy creation process requires large amounts of data to be processed into viable alternatives, based on which decisions can be made (Bharadwaj, 2018). Yet, strategic decision-making remains a cognitively demanding task, requiring suitable options to be identified and effectively chosen among (Hambrick and Mason, 1984). Often in the interest of time, human decision makers satisfice rather than optimize by selecting among limited options founded on their extant knowledge base (Cyert and March, 1963). AI, on the other hand, provides a systematic ability to process and interpret data and learns to achieve specific goals by enabling appropriate adaptation (Kaplan and Haenlein, 2019). Firms already use AI to translate big data into manageable information and knowledge, which can form input to effective marketing and sales strategies (Paschen et al., 2019).

In considering of the above, our paper aims to contribute knowledge relating the role of AI in marketing strategy formulation, and providing academic and managerial insights by inquiry into whether and how AI can contribute to marketing strategy formulation. Taking a contingency theory approach, the authors address this question by conducting an exploratory study to confirm the current state (e.g. how AI is being used in this context, if the use of artificial intelligence has changed the way individuals and firms make strategic marketing decisions); as well as seeking potential foresight into future use (options for how to use AI in the strategic marketing process). To make both academic and practical contributions, the authors examine the evolution of the use of AI to support strategy creation through the lens of contingency theory, as well as express our findings using the Gartner analytics ascendancy model.

Since the time of the Second World War, the field of artificial intelligence has worked to understand intelligence and build intelligent entities. While the term Artificial Intelligence was coined in the middle of the last century, activities associated with it were underway earlier (Russell and Norvig, 2016; McCulloch and Pitts, 1943). Significant progress led to AI in the 1980s forming its own industry, driven by technical developments, the emergence of intelligent agents, and the availability of very large data sets (Russell and Norvig, 2016). Today AI is actively used in a range of fields such as autonomous technologies, medical technologies, and other robotics (O'sullivan et al., 2019).

A question that arises is what aspects of AI is actually suitable to address, and if there is an area or an activity of a business organization that cannot be addressed by AI. Although significant technological progress has been made, humans have a comparative advantage with regards to imagination, intuition, and creativity (Jarrahi, 2018; Brynjolfsson and McAfee, 2014), therefore it seemed likely that humans retain the upper hand where artistic creativity is concerned. As seen in Figure 1 below, Kaplan and Haenlein (2019) classify AI into different types based on their potential business use. The first two types already exist. The first, Analytical AI, displays characteristics of cognitive intelligence, with learnings from the past informing future decisions. The second type, Human-Inspired AI, combines from cognitive intelligence with aspects of emotional intelligence, where a system, for example, can be trained to recognize emotions expressed by humans, such as in customer interactions. Finally, the third type is hypothesized as Humanized AI, which would demonstrate a combination of cognitive, emotional, and social intelligence.

A strategy is formed by a pattern of decisions (Mintzberg, 1978), which are of critical importance for firm performance (Eisenhardt and Zbaracki, 1992). It is a foundational building block in the achievement of organizational objectives (Hambrick and Frederickson, 2001). The view on strategy has developed over time. Miles and Snow (1978) looked at strategy as a typology of alternative options for organizations to identify and address the product-market domain to achieve competitive advantage. Porter (1980, 1996) viewed business strategy as relating to the type of customer value creation a firm offers compared with competitors (such as differentiation or low cost) and how to approach the market (taking marketwide or more focused approach).

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