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... termine the best strategy. However, there is the danger that recent history will be used to justify or rationalise decisions and mistakes (Robson, 1997). Mintzberg (1990) makes an important point here about both approaches - the design school and the evolutionary school.
He concludes that both have a contribution to make and are not mutually exclusive. He also reiterates that while the three elements of strategic management interact and that strategic planning is not linear, it is still valuable to have some model of the planning process. Criticisms of Michael Porter There have been suggestions by many scholars that strategy emerges (Rouleau & Sequin, 1995) and these scholars critique Porters methods. Most of the strategic literature shows the ideology that 'what is good for the higher management is good for everyone'. Most of this literature shows there should or is no conflict with this (Hatfield, 1997) or the industry, organization and market. Granovetter (1985) suggests, the social and cultural aspects of all human endeavours.
The five forces model of Porter (1980) is criticised by Shrivastava (1986) as not taking in to account stakeholders well-being. He contests that it only attempts to maximise profits of the firm and is narrow in formulating success factors for senior managers. The view of Knights (1992) is that strategy is a form of imperialism located within a discourse, which cloaks the power of managers as a class in culturally acceptable clothing of science and objectivity. His interpretation is that Porters generic strategies are difficult to implement but remain the most popular choice for senior managers within the financial sector. He says that the conditions needed to carry out the generic strategies is the 'reality' by the management to forget, neglect or deny subjectivity. The inherent problem with Porters strategy seems to be that if all businesses adopted his strategy then there would be no competitive advantage.
However the whole world still uses the method to this day simply because it promises 'unequal power' brought about from 'specialist knowledge' to the senior management. Knight contests that management find Porter attractive as this expert knowledge provides an illusion of control, legitimacy and security amidst all the uncertainty. These ideas appear to support the view that 'strategic management' could be considered a myth as suggested by Been (1992) Strategic planning for information systems The exploitation of IT for strategic advantage began in the early 1970 s largely as a response to changing global economic and social conditions and rapid advances in technology. Likewise, IS and IT became the key enablers of truly global trading systems (Drucker, 1993). Strategic planning has been defined as 'the process of identifying a portfolio of computer-based applications that will assist an organization executing its business plans and realising its business goals' (Lederer and Gardiner, 1992). It is the means of identifying application systems which support and enhance organization strategy.
It also provides a framework for the effective implementation of these systems (fiddler and Rogerson, 1996). It has been claimed that strategic IS planning can help an organization visualise the potential contribution of IS (Lederer & Gardiner, 1992). Gaining Advantage Through Applying Information Systems American Airlines - SABRE One of the most commonly used examples of gaining strategic advantage through the application of IS has to be the SABRE reservation system by American Airlines (AA). It was the first electronic reservation system in the US that was highly successful. It came about to counter the threat of travel agents who were developing their own booking system and its sophistication was a major breakthrough.
The competitive value SABRE provided is being felt thirty years later. In 1988 American Airlines was making more money from SABRE than from flying planes, this proves the impact of IS on a real company and the success. It has been said that the information provided by SABRE has been beneficial to the success as it is used in a variety of ways. Merrill Lynch A different example of strategic success, which proves that competitive advantage can be short lived, is the diversification of Merrill Lynch in the mid seventies. A strategic option was created to integrate cash management for customers who were tired of getting different account to get credit from different places.
The Cash Management Account (CMA) combined separate banking services in to one all encompassing statement. It was automated and technically complex. This radically new service was very different from traditional banking giving Merrill Lynch ninety percent of the market for five years. Even though it was a success the company did not update and enhance the system so competitive advantage eventually slipped away. This proved that to integrate IS for strategic advantage it has to be continually reviewed and updated. Difficulties in Planning for Information Systems Technology officers have the opinion that Information system planning fails because the technology in question matures and evolves too quickly.
They believe that users will have no way of knowing what they need in the future. Greg Jackson, Associate provost for Information Technology at the university of Chicago concludes that "it is critical to remember that a plan is a statement about priorities and their implementation, given our best knowledge at planning time, and that all kinds of events will cause the unfolding of history to differ from the plan." This is obviously true as plans within organizations rarely come to fruition, but are fought with problems and issues outside our control. IT managers can take some of the blame for the IS strategies failing, this is particularly the case when they reduce complex social, political and cultural problems to simper technical specifications. This satisfies the IT managers, as they are following classical methodologies but does not reflect the newer complex organizations. Classical strategic information systems planning is based on the rational, economic man (Whittington, 1993) making decisions based on analysing the situation scientifically not socially. As advantageous as it seems from the studies and theories about IS planning models, there is no track record for their success.
Commentators have argued that IS planning may not even give competitive advantage at all (Galliers, 1993). There is obvious advantages to IS planning such as a defined way rather than just improvising, but there are also losses using strategic IS planning. IS planning can be duplicated with relative ease by rivals who then gain the same competitive advantage the organization once had exclusively. Another issue is that IS environments mature very quickly so any advantage gained is lost relatively quickly which was proved previously with Merrill Lynch. Galliers, (1993) makes the point that sustainable competitive advantage is possible only if additional features, desired by customers or created by new IS possibilities, can arise continuously. So an organization has to continually update there IS strategy in line with customer requirements for success.
Inkjet and Choudhury (1995) conclude that in some organizations a business strategy is hard to define or even non existent and this shades the usefulness of strategic IS planning approaches, which mostly assume that there is an existing business strategy. Observations made by Pruijm (1990) have shown that where competitive advantage has been enabled by IS, the success has been due to incremental evolution of an existing application. This views is reflected in traditional evolving business strategies by Mintzberg (1989) and Quinn and Paquette (1990) They suggest that the strategic application of IS is more the result of a process of continuous evolution of IS in organizations (Senn, 1997). Evolution can therefore be said to evolve as organizations change. Lee and Bai (2003) conclude that traditional IS planning theories fail to take in to account 'dynamic environmental requirements'. ' Incremental Approaches for Information Systems Strategy Due to the adverse, rapid condition of technology advances traditional IS approaches are not so suitable, so incremental evolutionary approaches are being introduced. These approaches rely on specific staff and key mangers to do the required analysis.
This allows flexibility rather than the traditional rigidity of older methods. It has to be noted though that Salmela and Spil (2002) have stressed not to rely completely on an informal incremental process as the solutions to e business can be very complex. Four cycles has been introduced by Salmela and Spil (2002) to take in to account e business strategy and enables important IS planning issues to be addressed. The method is evolutionary and is open to management change.
This allows the method to be formal yet flexible. IS organizations evolve over time and therefore change paths, this method takes in to account the changes. It has to be also noted that emphasis has to be placed on group interaction, knowledge, change and organizational management (Lee and Bai, 2003). Even the early strategies of Earl (1990) take in to account group interaction so it has to have important relevance in IS management also.
Conclusion It is been concluded that traditional strategic planning is a good foundation for organizations but commentators argue that the older strategies lack flexibility for IS planning and do not take in to account enough external factors, in essence they say the older methods are for perfect organizations that never have any economic, political or ethical problems. Theorists have concluded that IS strategies do not work for all organizations, as some don't have business plans, which are the requirements of most business strategies. IS in relation to this is hard to strategies for in current organizations due to the frequency of change in markets and external issues beyond the control of organizations. New, more evolutionary approaches are being developed which are iterative and flexible and these allow users, inherently IT managers to continually change perspectives along the planning lifecycle continuously adapting to changes. References Ans off, H. I. (1969) Business Strategy, Penguin.
Applegate, L. M. , McFaran, F. W. , McKenney J. L. (1996), Corporate Information Systems. Drucker, P. F. (1993) Post Capitalist Society, Butterworth-Heinemann.
Earl, M. J. (1989) Management Strategies for IT, Prentice Hall. Earl, M. J. (1996) Information Management - The Organizational Dimension, Oxford University Press.
Flynn, N. (1993) Public Sector Management (2 nd ed. ), Harvester-Wheatsheaf. Galliers R. D (1994) Strategic Information Management, Butterworth Heinemann. Lee, G, Bai, R. (2003) Organizational mechanisms for successful IS/IT strategic planning in the digital era. Management Decision [ 2003 ] 32 - 42. Emerald Journal.
Lynch, R. (1997) Corporate Strategy, Pitman Publishing. Mintzberg, H. (1990) The Design School: reconsidering the basic premises of strategic management, Strategic Management Journal, 11, pp. 176 - 95. Pettigrew, A. (1985) The awakening giant: continuity and change at ICI, Blackwell. Porter, M. E. (1985) Competitive Advantage, The Free Press. Porter, M.
E. (1980) Competitive Strategy, The Free Press. Robson, W. (1998) Strategic Management and Information Systems, 2 nd ed. , Pitman Publishing. Salmela, H, Spil, T, (2002) Dynamic and emergent information systems strategy formulation and implementation. International Journal of Information Management 22 [ 2002 ] 441 - 460 Senge, P. M. (1990) The Fifth Discipline, Century Business. Stacey, R.
D. (1993) Strategic Management and Organizational Dynamics, Pitman Publishing. Strassman, P. A. (1990) The Business Value of Computers: An Executive's Guide, Information Economics Press. Ward J, Griffiths, P. (1996) Strategic Planning for Information Systems, John Wiley.
Will cocks, L. , Feel, D. , Isle, G. (1997) Managing IT as a Strategic Resource, McGraw Hill.
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Research essay sample on 2 Nd Ed Merrill Lynch
