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JMH 17,1

Ansoff revisited
How Ansoff interfaces with both the planning and learning schools of thought in strategy
Robert Moussetis
Department of Management and Marketing, North Central College, Naperville, Illinois, USA
Abstract
Purpose The purpose of this paper is to revisit Igor Ansoffs work and how it interfaces with the various schools of strategic management. Design/methodology/approach Ansoffs work of 40 years is reviewed and related to other schools of thought in strategic management. Findings Ansoffs work is much more comprehensive than the literature suggests. His later work (after 1990) is largely unnoticed by academics, nevertheless, it is the empirical ndings of his theoretical postulations. Moreover, his work interfaces with virtually all schools of thought in strategic management. Research limitations/implications It will provide a broader view of Ansoffs work and perhaps trigger additional research as a result of his later work. Most researchers continue to associate Ansoff with his early thoughts. Practical implications Ansoffs work has found wide applications in a variety of industries. His work was mostly with industries that used his propositions in order to better strategies. Social implications Ansoffs later research and empirical ndings could provide a launchpad for re-examining the method by which organizations assess their environment, strategic behaviour, and internal capability. Therefore, organizations may have an alternative method to develop strategy. Originality/value This is the rst attempt to provide a historical view of Ansoffs work and perhaps his timeliness. The recent economic crisis only further supports Ansoffs basic position that companies must create custom strategies to t their environment, culture, and capabilities. Keywords Strategic management, Strategic change, Management history, Management theory, Management strategy, Business history Paper type Research paper

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Journal of Management History Vol. 17 No. 1, 2011 pp. 102-125 q Emerald Group Publishing Limited 1751-1348 DOI 10.1108/17511341111099556

Introduction A young scientist, Igor H. Ansoff, published his rst article titled The stability of linear oscillating systems with constant time lag published in 1948 in the Journal of Applied Mechanics. If he only knew, that in 1957, he would publish the Strategies for diversication in the Harvard Business Review later to be followed with the seminal work on Corporate Strategy published in 1965, thus contributing to the intellectual domain for a new eld in Strategic Management. In 2002, strategic management lost one of its early thinkers and writers, Igor Ansoff. Leaving a legacy as one of the founders of the eld of strategic management, Ansoff created a distinctive thinking on strategic management. Surprisingly, however, only his early work continues to be referenced. He wrote the inuential book Corporate Strategy in 1965 and after teaching at Carnegie and becoming the founding Dean of the Vanderbilt School of Business, Igor Ansoff spent about 15 years in Europe teaching and consulting. Subsequently, the US academia forgot Ansoff and, continues to cite his

early work. Although his early work was conceptually groundbreaking at the time, his later work, which included empirical evidence, went largely unnoticed in the academia. Even Ansoff (1998) suggested that his later work was more relevant than his 1965 book. Moreover, his interests were more in the consulting world, which left the academic setting with an Ansofan gap. Ansoff was labelled as part of the planning school (Table IV) of thought in the eld of strategy. However, his later work strongly suggests that his ideas are much more comprehensive (Al-Hadramy, 1992; Hatziantoniou, 1986; Jaja, 1989; Lewis, 1989; Salameh, 1987; Mitiku, 1992; van der Velten, 1997; Ansoff and Sullivan, 1993a, b). Historically, there are many competing theories in the eld of strategy (Barnard, 1938; Hofer and Schendel, 1978; Lindblom, 1959; March and Simon, 1958; Burns and Stalker, 1961; Emery and Trist, 1965; Mintzberg, 1973; Quinn, 1978) leading to a diversity of strategy-making typologies (Bourgeois and Brodwin, 1984; Chaffee, 1985; Mintzberg, 1978; Nonaka, 1988). Moreover, empirical work (Miller and Cardinal, 1994; Schwenk and Schrader, 1993; Fredrickson and Mitchell, 1984; Miller and Friesen, 1977, 1983; Shrivastava and Grant, 1985; Wooldridge and Floyd, 1990) has provided a broad choice of forethoughts with competing schools of strategy. The purpose of this paper is to demonstrate that Ansoffs work permeates into a larger domain of strategic management thought than previously suggested (Mintzberg and Lampel, 1999) and further contributes to the clarication on the debate between the planning and learning school in strategy. The planning school (Ansoff, 1991, 1994) argues that formal planning is benecial for both stable and unstable environments while the learning school prefers logical incrementalism, particularly in unstable environments (Mintzberg, 1991, 1994a, b). Criticism of the planning school failed to consider the factor of time (Brews and Hunt, 1999). Although some research suggested a weak link between planning and performance (Boyd, 1991; Pearce et al., 1987), other research was critical of the design and methodology of early research (Thune and House, 1970; Kudla, 1980), hence, indicating a much greater link between formal planning (Ansoff, 1991, 1994) than previously argued (Mintzebrg, 1991, 1994a, b). Such studies (Pearce et al., 1987; Wood and LaForge, 1979, 1981; Fredrickson and Mitchell, 1984) utilized rened methodologies and suggested a stronger link between planning and performance. This paper will rst provide a brief historical background, summary of Ansoffs critical concepts relevant to his later research, and nally his permeation with the schools of thought as illustrated by Mintzberg and Lampel (1999). The scope and range of this paper will not permit the full development of each school of strategic thought. Although the foundation of this paper is based on the integrative work by Mintzberg and Lampel (1999), the author of this paper understands the limitations and potential difference of opinions relating to the degree and range of attributions of various schools of thought in strategy. Moreover, the author recognizes that there are many contributors to the eld of strategic management who will not receive adequate examination as a result of the limited scope of the paper. Background Ansoff never fully engaged the academic establishment (Academy of Management annual meetings); hence, he never developed the intellectual domain (promote his ideas within the management eld) to better illustrate and defend his theoretical and empirical postulations. Moreover, he was never convinced about popularizing his positions

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into writings that resonate better with the wider academic world. Therefore, one may suggest that Ansoff failed to disseminate his ideas and empirical ndings into a wider academic audience. His engineering and mathematical background was clearly evident in his approach to writing and teaching. Thus, his 1990 book Implanting Strategic Management often reads like an engineering book with elaborate systems analysis, hence, indicating his basic premise of thinking that strategy is complex and, therefore, requires analogous respect and approach. Historically, Ansoffs (1957a, b, 1963, 1964, 1965) early research suggested the evolution of his suppositions which were culminated to the famous Corporate Strategy book. Based on his writings and postulations, it seems that Ashby (1960), Selznick (1957) and Simon (1957), and later Burns and Stalker (1961) and Chandler (1962) inuenced his thinking and his preliminary ideas and theories. Ansoff introduced the concept of balancing external characteristics of the product-market strategy and internal t between strategy and business resources (Ansoff, 1957a, p. 413), thus paving for the relationship of strategy and structure (Chandler, 1962), changing environmental contexts for organizations (Emery and Trist, 1965) and the relationship of organizational structure and environment (Burns and Stalker, 1961). Although Ansoff has published empirical ndings (Ansoff and Sullivan, 1993a, b), Ansoff failed again to engage the academic community; it was during this time where Ansoff enjoyed consulting much more than publishing and spreading his theories and empirical ndings. Ansoffs intensity about applicable research generated a few followers that entered the business world instead of pursuing academic careers, hence, by his own strategic success generating the intellectual gap within academia. Nevertheless, his propositions are infused throughout literature and popular works on key turning points of the strategy that has given credit to his work. For example, the work by Hamel and Prahalad (1996, p. xix), clearly indicates the intellectual debt owed to Ansoff, Chandler, and Andrews. For someone who thoroughly understands Ansoffs work, it is clear that his work lters throughout Hamels and Prahalads book. Ansoffs work is based on developing an instrument to facilitate top managers aspirations to explore and exploit future prot potential hence competing for the future. Summary of Ansoffs work[1] Ansoffs innovations on strategic management was to provide a methodology for managers to analyze, systematically, the future and quantify qualitative information; then establish the managerial behaviour and capability needed to succeed vs the present managerial behaviour and capability. Tables I-III illustrate his contribution and innovation to the strategic management eld. His work on strategic diagnosis facilitated the development of an optimal prole for rms to succeed (Table III), which was empirically tested (Ansoff and Sullivan, 1993a, b). The following section attempts to provide a general context about Ansoffs thought process illustrating the process between external environment changes and a rms capability to adjust with their internal capabilities and corresponding behaviours. History of managerial challenges In his attempt to describe the historical context of the change process, Ansoff describes the features of various eras starting from the Industrial Revolution to the post-industrial or post-modern era (Ansoff and McDonnell, 1990; Ansoff, 1965). His approach to explain

Production Marketing Turbulence scale Environmental turbulence 1 Repetitive 2 3 Changing fast incremental Anticipatory Incremental based on extrapolation Marketing pursues familiar change

Entrepreneurship Creativity 4 Discontinuous predictable Entrepreneurial Discontinuous based on expected futures Strategic seeks new change 5 Surprising unpredictable Creative Discontinuous based on creativity Flexible seeks novel change

Ansoff revisited

Expanding slow incremental Strategic Stable Reactive aggressiveness Based on Incremental based on previous experience cases Responsiveness Custodial Production of capability suppresses adapts to change changes

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Table I. Matching strategic aggressiveness and responsiveness of capability with turbulence

Source: Ansoff and McDonnell (1990), reused with permission of the Ansoff Family Trust

Production Marketing Turbulence scale Environmental turbulence 1 Repetitive 2 3 Changing fast incremental Anticipatory Incremental based on extrapolation Marketing pursues familiar change

Entrepreneurship Creativity 4 Discontinuous predictable Entrepreneurial Discontinuous based on expected futures Strategic seeks new change 5 Surprising unpredictable Creative Discontinuous based on creativity Flexible seeks novel change

Expanding slow incremental Strategic Stable Reactive aggressiveness Based on Incremental based on previous experience cases Responsiveness Custodial Production of capability suppresses adapts to change changes

Table II. Suboptimal scenario

Production Marketing Turbulence scale Environmental turbulence 1 Repetitive 2 3 Changing fast incremental Anticipatory Incremental based on extrapolation Marketing pursues familiar change

Entrepreneurship Creativity 4 Discontinuous predictable Entrepreneurial Discontinuous based on expected futures Strategic seeks new change 5 Surprising unpredictable Creative Discontinuous based on creativity Flexible seeks novel change

Expanding slow incremental Strategic Stable Reactive aggressiveness Based on Incremental based on previous experience cases Responsiveness Custodial Production of capability suppresses adapts to change changes

Table III. Optimal scenario

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the managerial characteristics dening rms of the respective time periods formulates the context to establish a domain for the change process. For example, his vivid illustration of the Ford Motor Company being dominated by the production function was the appropriate managerial function between the years 1900 and 1930 when the Industrial Revolution was consolidated into mass production. However, once the need of basic consumer goods was satised (i.e. Ford Motor Company and the T-model), the managerial approach moved to a more marketing function. Although Ford Motor Company dominated the production era, its failure to change in a timely manner allowed the more marketing-oriented General Motors to ascend to the top of the industry in the late 1930s. His historical reference continues with his observation of the general accelerated change, thus a new managerial approach capable of capturing change in a timely fashion was suggested. The early management periods were dominated by production rst and marketing later where the change process was rather slow and mostly organic. The post-industrial period though was characterized by an afuent society with novel demands in a technologically fast-changing environment. This new context of managerial setting necessitated the change towards the long-range planning approach. Lastly, he observed that rms increasingly faced rapid market saturation, global competition, political upheavals, increased government regulations, frequent industry changes, novel technologies and continuous threat of substitute industries. Hence, he established a model to help managers quantify qualitative observations about environmental shifts and provide a change management tool sensitive to the complexity, rate, novelty and predictability of change. This led to the strategic success hypothesis (which has been empirically validated) with the development of turbulence scales and the need for a corresponding managerial capability and strategic orientation according to the changeability and predictability of the rms environment. This is the historical moment where Ansoff expands his thinking beyond the formal planning to include a wider set of contingencies; thus, allowing the managers to better understand and manage the change process as a function of environmental variability, strategic behaviour (Ansoff, 1987), managerial capability and behavioural characteristics (i.e. change is often corollary to systemic and/or behavioural resistance to change). His work on environmental variability as a determinant of strategy was instrumental in leading effective changes in companies around the world; companies that utilized his services such as IBM, Northern Telecom, Bayer, Phillips, Banamex, and the US Navy were among some of the better know organizations. Ansoffs industry experience with strategic planning resulted in his basic postulation that includes three primary dimensions: strategy formulation, management capability and design, and management of transformational change. Ansoffs deep understanding of the holistic approach to strategy led him through a lifetime of improving his basic theoretical propositions established back in 1965. He developed a plethora of mechanisms and approaches that organizations found relevant and applicable in real time. The next section provides a brief overview of the major concepts and approaches he had developed that facilitate effective change. The concepts selected represent a core basis on Ansoffs work and were fundamental in his later research (empirical work using strategic diagnosis). Moreover, the concepts serve as a foundation of Ansoffs work on strategy and change. The attempt of this research effort is to utilize only the concepts of environment, environmental turbulence, strategic orientation, and strategic diagnosis since they represent the foundational concepts required to bridge Ansoffs wider

integration to a broader range of schools of thought; moreover, they also serve as a launch base for future research. Environment The use of this term was all inclusive and it was meant to examine economic, political, sociological, technological, geopolitical, psychological, etc. forces in the area(s) that an organization chooses to operate. Ansoff postulated the term environment serving organizations (ESO) as any organization that provided goods and/or services to the environment and consumes resources in the process. The most important contingent force, which denes the required responses to the environment that determine the success of an ESO, is the environmental turbulence. Environmental turbulence is the combined measure of changeability and predictability of the organizations environment (complexity, novelty, rapidity of change, and visibility). Ansoff divided the environment, primarily into two large categories: historic and discontinuous. In historic environments, decisions about the future are based on past and present events that can be extrapolated into the future. Change is incremental, predictable, and visible. In discontinuous environments, the future is partially visible and predictable; therefore, change is possible by using weak signals from the environment. Lastly, the future could be completely unpredictable and invisible; hence, changes are based on building scenarios utilizing weak environmental signals. However, there are several authors that have utilized the concept of environmental turbulence. Scholars have postulated the dependence upon the environment (Aldrich and Pfeffer, 1976; Child, 1972; Hannan and Freeman, 1989; Lawrence and Lorsch, 1967a, b; Pfeffer and Salancik, 1978; Thompson, 1967). Furthermore, the research typology has portrayed environments primarily as stable, uncertain, complex, static, dynamic, discontinuous, and turbulent (Emery and Trist, 1965; Duncan, 1972; Lawrence and Lorsch, 1967a, b; Post, 1978) and the variability is known as environmental turbulence. Furthermore, strategy is often determined as a result of environmental turbulence (Buchholz and Rosenthal, 1995; Carroll, 1994; Drucker, 1980; Marcus, 1993; Peery, 1995; Post, 1978; Vernon-Wortzel, 1994). In addition, Ansoff was associated with the change process of mechanistic organizations (Burns and Stalker, 1961); conversely, Ansoffs later postulations suggested that he was considering a wider set of variables (i.e. behavioural, cultural, etc.) hence, rendering his postulations to t a wider range of strategic thought. Ansoffs later work suggested some degree of consistency with the contingency approach (Burns and Stalker, 1961; Woodward, 1965; Lawrence and Lorsch, 1967a, b; Donaldson, 1995a) that indicates a t between the external vs internal changes as they relate to organizational performance. Ansoffs later postulations argued that organizations should apply a change process that is appropriate to their environment and internal behaviour and dynamics, thus resisting to subscribe to the organic evolution in turbulents environments since often there is not time for an organic adjustment and also often new organizations in turbulent settings require formal planning (Stichcombe, 1965; Sine et al., 2006). Strategic orientation behaviour Strategic behaviour leads to different levels of performance (Morrison and Kendall, 1992). However, what type of strategic behaviour produces optimal performance?

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The typology developed by Miles and Snow (1978) provided a foundation for other scholars of organizational behaviour interested in the relationships between strategy, structure, and process. The validity and reliability have also been afrmed as usable to explore organizations and their strategies (Shortel and Zarac, 1990). The typology is also consistent with theoretical and empirical studies (Ansoff, 1979; Ansoff and Sullivan, 1993a, b; Hambrick, 1983; McDaniel and Kolari, 1987; Tan and Litschert, 1994; Ramaswamy et al., 1994). Moreover, in highly concentrated industries (Porter, 1980; Segev, 1989; DAveni, 1994), the strategic behaviours focusing on low costs and product differentiation are excellent tools; however, they offered little guidance for industries in highly entrepreneurial, creative, and innovative settings, which are still in a pre-infancy stage or have yet to form. The suggestion is that organizations employ a different organizational response (endogenous-driven behaviour) depending on the environmental (exogenous-driven process) conditions (contingency), which facilitates the goal of this research to associate environmental turbulence and strategic behaviour orientation to performance. Strategic diagnosis This is perhaps the most innovative tool Ansoff created both conceptually and practically. It allows companies to essentially diagnose their optimal future prot potential. The context of this analysis lays with the rapid technological changes and sudden industry shifts that generate a challenging strategic setting for most post-modern organizations. There is a continuous evolution of the change agenda with strategic fads intending to provide universal prescriptions to an organizations future success with a generally low success rate. For example, total quality of management was highly successful in Japan but other cultures showed mixed results; reengineering did not provide a process beyond the reengineered organizations; in benchmarking, rms were told that following the best practices of the industry will likely make you successful as well (imagine benchmarking WorldCom, Enron few years back, and other companies receiving accolades for their exceptional performance or the Thai Government model of success prior to 1995-1996). In short, there are no universal prescriptions for future challenges. As a result, Ansoff suggests that there are two key problems: (1) Each rm must develop the capability to diagnose future challenges, opportunities, threats, weaknesses, and strengths (Ansoff and McDonnell, 1990; Beam, 2001). (2) Each rm must consider developing an in-house response mechanism to t their needs. Ansoffs contribution is a tool to facilitate the translation of qualitative data into quantitative numbers that assist managers in developing a direction. This tool is the strategic diagnosis (Ansoff and McDonnell, 1990), which is a systematic approach to determining the changes that have to be made to a rms strategy and its internal capability in order to assure the organizations success in its future environment. This diagnostic procedure is derived from the strategic success hypothesis and empirical studies. The purpose is for managers to have tools to effectively encounter the relentless changes and turbulence of their environment (Ansoff and McDonnell, 1990). Performance is optimal if strategy and capability match the environmental turbulence (Ansoff and Sullivan, 1993a, b; Pelham, 1999).

Strategic success hypothesis states that an organizations performance potential is optimum when the following three conditions are met: (1) aggressiveness of the organizations strategic behaviour matches the turbulence of its environment; (2) responsiveness of the organizations capability matches the aggressiveness of its strategy; and (3) the components of the organizations capability must be supportive of each other. Table I summarizes the diagnostic instrument. Table II indicates a sub-optimal scenario and Table III indicates an optimal scenario for an organization (see tables for better clarity): . Strategic aggressiveness is the strategic orientation of the general management (reactive, proactive, entrepreneurial, creative, etc.). . Responsiveness refers to the functional orientation of the general management (production, marketing, entrepreneurial, strategic, etc.). Table I illustrates the basic premise as proposed by Ansoff and McDonnell (1990). Tables II and III indicate two different scenarios of what potentially may happen in the market. For example, Table II illustrates a scenario in which the rms environment is discontinuous but the company maintains a strategic orientation that is based on past information. Hence, Ansoff argues that such a rm will display a strategic gap, which will correlate with suboptimal performance. This tool has been used successfully to determine strategic success and failures in largely unpublished (Al-Hadramy, 1992; Hatziantoniou, 1986; Jaja, 1989; Lewis, 1989; Salameh, 1987; Mitiku, 1992; van der Velten, 1997) and published works (Ansoff and Sullivan, 1993a, b). Those are the empirical studies post-1990 that dene Ansoff in a broader scope and suggest his interface with other schools of thought (Table IV). Ansoffs interface with others schools of thought in strategic management The background on strategic management has a plethora of work that will be virtually impossible to adequately develop within the pages of this paper. From developing individual potential within an organization (Argyris, 1965, 1975, 1985; Argyris and Schon, 1978) to managing values (Barnard, 1938, 1948) to the pioneering work on strategy and structures (Chandler, 1962) or the concept of strategy as a policy generator (Andrews, 1980) or to the development of effective managers (Drucker, 1954, 1964, 1969, 1974), the eld of strategy and surrounding disciplines have populated the literature with an array of theories and prescriptions. In addition, we had research on competitive advantage within a given industry (Porter, 1980), logical incremenatalism (Quinn, 1980), hyper competition (DAveni, 1994, 1999; DAveni et al., 1995), and competing for the future (Hamel and Prahalad, 1996). Lastly, as indicated earlier, there is the great debate among various thinkers on the strategy-making process with a variety of strategy-making classications (Barnard, 1938; Bourgeois and Brodwin, 1984; Chaffee, 1985; Hofer and Schendel, 1978; Lindblom, 1959; March and Simon, 1958; Mintzberg, 1973, 1978; Nonaka, 1988; Quinn, 1978). The broad divisions of strategic management thinking are the prescriptive school of thought (or ought to be) and the descriptive (or is) (Mintzberg and Lampel, 1999).

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Sources

Base discipline

Champions

Intended message Ansoffs turbulence scale as it applies to each school of thought

Realized message Prescriptive A stitch in time saves time

School category

Associated homily

Table IV. Ansoff with all the schools of thought as described by Mintzberg and Lampel (1999) Planning H.I. Ansoff Cognitive H.A. Simon and J.G. March Psychology (cognitive) Entrepreneurial J.A. Schumpeter and A.H. Cole None (although early writings come from economists) Popular business press and individualists Envision 4-5 Environments are discontinuous and surprising, entrepreneurial approach is needed Centralize (then hope) Calculate (rather than create or commit) Prescriptive Nothin but the facts maam Positioning D.E. Schendel and M.E. Porter Some links to planning, Economics (industrial systems theory, and organization) an cybernetics military history Professional managers, Analytical staff, and consulting MBAs, and staff boutiques experts Formalize 1-3 Speed of change allows time to plan and respond Analyze 1-3 Speed of change is fast but still with adequate time to respond Those with psychological bent, pessimists in one wing, and optimists on the other Cope or create 1-5 All levels are possibilities Worry (being unable to cope in either case) Descriptive Ill see it when I believe it (continued) Descriptive (some prescriptive) Take us to your leader

Design P. Selznick

None (architecture as a metaphor)

Case studies

Fit 1-3 Organizations can study past problems and prescribe action

Think (strategy making as Program (rather than a case study) formulate)

Prescriptive

Look Before you Leap

Sources Anthropology

Base discipline

Power G.T. Allison, J. Pfeffer, G.R. Salancik and W.G. Astley Political science

Cultural E. Rhenman and R.Normann

Environmental M.T. Hannan and J. Freeman (contingency theorists) Biology

Conguration A.D. Chandler, H. Mintzberg, R.E. Miles, and C.C. Snow History

Champions

Learning C.E. Lindblom, R.M. March, K.E. Weick, C.K. Prahald and G Hamel None (perhaps some peripheral links to learning theory and psychology and education). Chaos theory and mathematics People who like power, politics, and conspiracy Population ecologists React Levels 1-3 Organic adaptation is subject to adequate time

Population People who like the social, the spiritual, and ecologists and some organization the collective theorists Intended message Learn Promote Coalesce Levels 1-3 Levels 1-3 Ansoffs turbulence Levels 1-3 Reaching scale Those are the levels where Those are the levels where power could be consensus requires power could experiment ample time used to advance a with new strategic areas change agenda and develop new innovative ideas Realized message Play (rather than pursue) Hoard (rather than Perpetuate (rather change) than change) School category Descriptive Descriptive Descriptive Capitulate (rather than confront) Descriptive It all depends An apple never falls far from the tree

Associated homily

If you rst dont succeed, Look out for number try, try, again one

Lumbers and integrators in general, change agents. Conguration (Holland) vs transformers (USA) Integrate and transform Levels 1-5 Depending on the environmental demands, the organization formulates a contingency plan Lump (rather than split, adapt) Descriptive and prescriptive To everything there is a reason [. . .]

Source: Mintzberg and Lampel (1999) with Ansoff inserted

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Table IV.

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The Ansoff school of thought is environment driven; hence, Ansoff believed in what is since the environment directs your response; but he also proposed a response mechanism (what ought to be) based on the environment the organization is operating under. Hence, the value of understanding how Ansoff interfaces with other schools of thought rests with the premise that Ansoff is much more dynamic and comprehensive than previously labelled. His strategic diagnosis instrument provides a launch base to accommodate much wider external and internal settings; from stable to highly turbulent, hence, Ansoff dynamism. The next section will provide a brief overview of each school of strategy as described by Mintzberg and Lampel (1999) and integrate how Ansoffs work interfaces with each school of thought. Design school This is one of the original perspectives, which views strategy as a t between internal strengths and weaknesses and external threats and opportunities (Chandler, 1962; Selznick, 1957). It is commonly known in literature as the strengths, weaknesses, opportunities, and threats (SWOT) analysis. Case studies were the primary tool to develop policy and strategy. Ansoffs connection Ansoff suggested precisely the basic premise of the design school since his basic argument is that external turbulence must be matched by corresponding internal capability and behaviour to respond. For example, if the environment (external opportunity) is dominated by marketing, then, internally, the organization must have the necessary managerial capability to respond (Dobni and Luffman, 2000, 2003). In Table III, the suggestion is that the optimal scenario is that strategic orientation and managerial responsiveness are also at level 3. The founder of Apple Computers, Steve Jobs, became an oddity within his own company in the mid-1980s when the computer industry moved to a marketing-oriented setting. Mr Jobs wanted to continue with cutting-edge technologies. On Ansoffs scale, the environment of Apple Computers had moved to level 3 (dominated by marketing price sensitive) while the strategic orientation of Steve Jobs remain at level 5 (creativity), hence, creating the gap. At the time, Apple Computers hired the former Chief Executive Ofcer (CEO) of Pepsi (a marketing expert), which made perfect sense since the personal computer market had moved into a marketing-oriented setting. Moreover, it is not accidental that Steve Jobs returned to Apple when the company developed a need to move into the cutting edge of technology again; hence, the t of Steve Jobss strategic aggressiveness and responsiveness matched the new environmental conditions (i products). For levels 1-3, Ansoff suggests that a SWOT approach is appropriate considering that the environmental conditions are changing at a speed with which the rm can cope adequately. Generally, levels 1-3 are dominated with organizations attempting to achieve economies of scale (repetition, productivity, and incremental changes to the product/service) as well as competing on price/marketing appeal. Thus, the SWOT analysis is an excellent tool for low-level turbulence. Ansoff has labelled levels 1 through 3 as the incremental environment. The principle of t is suggested when using Table I, which clearly provides a tool to establish the t between external changes and internal capabilities. Moreover, the premise of levels 1-3 is the time availability for change,

hence the indication of the case approach to strategy in extrapolative environments (levels 1-3). Lastly, Ansoff suggested that the SWOT analysis is contained within an industry and cannot be used as a tool to anticipate changes that are external to the industry. Classically, Ansoff referred to the ever-increasing market share and production efciency of companies in the horse carriage industry at the time of the discovery of the combustion engine; and, how managers fail to see the emergence of a new technology. Similarly, he talked about the discovery of transistors at the time of vacuum tubes and more recently, the failure of communication companies to move into wireless technology, thus, maintaining a level 4 or 5 behaviours and capability. Deservedly so, he predicted that companies such as AT&T or IBM would not survive as they were unless they developed levels 4 and 5 strategic behaviour and organizational responsiveness. His prediction of AT&T (break up) and IBM (Microsoft and Lenovo) is strategically consistent with his forecasts. Planning school This is the school of thought that evolved from the early diversication thinking that was entering the industries in the 1950s. The assumptions were that the external settings were changing rather slowly, hence, allowing time for the strategic process to be decomposed into small formal steps. Therefore, the process is more formal than rational (Chandler, 1962; Ansoff, 1965). Ansoffs connection This is the attribution given of most authors regarding Ansoffs work. However, the scale created by Ansoff has clearly indicated that the environment at turbulence levels 4 and 5 indicates high complexity, high speed of change, and unpredictability (Table I); hence, a different set of strategic orientation and managerial responsiveness. Moreover, Ansoff realized that the speed of change will not allow the planning process to take place in the traditional sense; thus, he had created other tools to facilitate sudden changes in the environment. For example, the issue management approach and crisis mode are a couple of Ansofan tools used in discontinuous settings (Ansoff and McDonnell, 1990). Moreover, he had indicated the translation of emerging weak signals in the rms environment into progressive action, hence, develop the appropriate managerial capability and strategic orientation. Ansoff spent his latter years concerned with the environments, which were unpredictable, complex, and discontinuous. His unpublished book-paper on strategic leadership (Ansoff and Sullivan, 1992) was an attempt to establish some parameters for the top management in discontinuous environments. If there is a plenty of time to change (low turbulence 1-2), with corresponding power structures, managerial climate, competence and capacity, then, a formal approach is suggested. However, he realized that management must be capable to analyze, cope, and create as a derivative of the environmental turbulence; hence, the premise that Ansoff is only part of the planning school of thought is incomplete. Positioning school In this view, formalized analysis of industries provides generic positions (Porter, 1980; DAveni et al., 1995). Porters view still dominates the strategy texts with the three basic approaches: standardization, differentiation, and focused strategies along with the ve forces model.

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Ansoffs connection The turbulence scale matches up nicely with Porters positioning school for levels 1-3. The changes are generally predictable based on industry analysis. Predictable, hence the establishment of Porters primary three strategies (low cost, differentiation, and focus). For example, the standardization approach is based on an incrementally expanding environment, hence the dominant strategic behaviour of managers needed for this setting is incremental experience (diminishing costs, learning curves, and reduction of cost), and the managerial capability is dominated by the capability of managers to generate better standardization. Correspondingly, the differentiation strategy is a marketing-based approach (got to let the customer know about our differentiated product, price, service, etc.). When the environment shifts, though, to highly turbulent (Ansoffs scales 4 and 5), Porters approach is limited to searching for focused differentiation. Porters approach leaves little room for strategy when industries are at an infancy or incubation period (biotech industry 15-20 years ago). Ansoffs instrument addresses the cost-based environment (usually levels 1 and/or 2) and the differentiated environment (level 3). The premise of Porters approach is based on an existing industry (hence, levels 1-3) while Ansoff provides additionally a tool for emerging and novel industries (levels 4 and 5) accommodating highly dynamic and volatile settings (Chakravarthy, 1997). Entrepreneurial This school of thought centered the process on the chief executive. This shifted the process from steps and design to envisioning (Cole, 1959). Although every organization has a vision, this school of thought relied on the leader to have the vision and the capability to implement it. Unlike the planning school, it relied on the leaders intuition. Ansoffs connection Levels 4 and 5 on the turbulence scale are clearly indicative of Ansoffs t to the Entrepreneurial school of thought. Considering that an entrepreneur is working in environments ranging from partially predictable to surprising and unpredictable, Ansoff indicated that the entrepreneurial and/or creative behaviours are the critical elements in levels of high turbulence (Calantone et al., 2003). Vision, exibility, and leadership are the characteristics of a CEO to navigate the turbulent settings. This does not diminish the importance of a CEO in levels 1-3; however, the incremental nature of levels 1 through 3 requires a less entrepreneurial approach. Hence, Ansoffs scale also provides a process for partially predictable and surprising situations as is the case of the entrepreneurial environment. Cognitive school Strategies are developed in peoples minds. Thus, cognition as information processing, knowledge structure mapping, and concept attainment facilitate the strategy formation (March and Simon, 1958; Simon, 1957; March, 1965, 1988). Ansoffs connection The managerial perception of environmental turbulence determines the establishment of the turbulence intensity. The method used by top management within an organization to lter the external elements establishes the capability of top management to accurately

measure the intensity of the turbulence. Ansoff indicates that top managers routinely generate their own cognition since they interpret environmental signals differently (knowledge structure mapping), hence, generating different strategic directions. His approach also cautioned top management about ltered information rising through the ranks when attempting to develop accurate perceptions (cognition) of the environmental turbulence. Ansoff identied the surveillance, mentality, and power lters as elements that top management must be aware of when gathering information (Ansoff and Sullivan, 1993b). For example, IBM and Microsoft in the early 1980s perceived, very differently the evolution of computer software, thus, generating different directions. The environment was the same for both companies but strategic decisions/perceptions were different (Ansoff and Sullivan, 1993a, b; Burgelman and Grove, 1996). Metaphorically, the weather was the same; they just decided to dress differently. Ansoff has strongly indicated that the scales he developed rely largely on the capability of the top management in an organization to accurately perceive the turbulence in order to develop the appropriate strategy and capability. It is highly likely for two executives to view the same environment and arrive at different conclusions. Learning school Here, strategies are emergent; strategists are found throughout the organization; formulation and implementation of strategy intermingle (Lindblom, 1959; Weick, 1979; Hamel and Prahalad, 1996). This descriptive school of thought challenged earlier versions of the planning school and within this school of thought people were inclined to experiment with ambiguity and adaptability, thus, providing an environment conducive to learning. However, learning requires time and environments characterized with high turbulence require immediate response; therefore, this school of thought is subject to time available. Ansoffs connection The learning school is appropriate for levels 1-3 considering that time is the critical element to mount an effective response. The weak signal (Ansoff and McDonnell, 1990) tool offers a graduated response mechanism where the rm will scan the environment, identify potential emerging threats, and develop a knowledge base (learning) while the issue management (Ansoff and McDonnell, 1990) approach provides a mechanism to classify emerging issues according to their urgency and priority, consequently, allowing top management to generate an effective strategy-response (learn) in a timely manner. Power school Strategy is a process that involves bargaining, persuasion, and confrontation among stakeholders/actors who possess power within the organization. Externally, power over partners and stakeholders is used to negotiate favourable strategies (Allison, 1971; Pfeffer and Salancik, 1978; Astley, 1984). Ansoffs connection Highly turbulent environments cannot afford the luxury of politics and posturing within the organization. High turbulence indicates a rapidly changing environment characterized by entrepreneurship and creativity, thus the learning schools basic premise can only nd applications in incremental environments (1-3). Ansoff has indicated that incremental

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levels where change is slower could be dominated by politics. If politics are dominant, the power structure and process are the critical elements in mounting effective responses. For example, a highly decentralized company (multinationals) requires a consensual approach to strategic response. Ansoff dedicated a considerable portion of his work to illustrate the power domains internally and externally within an organization. Moreover, he analyzed the aspirations and possible coalitions between external and internal stakeholders. Furthermore, he pointed to the impact of the rules of the game (regulations and legislation) and the need of organizations to build legitimate strategies as tools to inuence the rules of the game (hence, the importance of power and the political process). In his unpublished work (1992), he has identied the power sources, structure, and processes in developing effective tools for managing organizations. The underlying assumption in his unpublished work along with all of his early 1990s work is that managerial capability and behaviour must accommodate the demands of the environment. In this case, if a rm is in a highly turbulent regulatory and/or legislative setting, managers must have the corresponding capability and behaviour to cope. In this instance, political power, structure, and process become a critical strategic characteristic as a tool to establish persuasion avenues among stakeholders (both external and internal) to negotiate the favourable strategies. Moreover, he suggested modes of managing resistance to change and clearly delineated the difference between systemic and behavioural resistance. The elements of resistance to change as a function of time, management response to surprising changes, strategic issue management, and weak signals are some of the tools employed by Ansoff to counter an effective response to the variation of power. Cultural school This school of thought focuses on common interests and integration. Strategy is a social process rooted in culture (Rhenman, 1973; Normann, 1977). This school suggests the dual role of culture; it is notably a strategic change deterrent, but also serves as a change agent. It became central to strategic thinking as a result of the cultural impact derived from Japanese style management. Ansoffs connection Ansoff indicated that some organizations, where power is decentralized, the bargaining process dominates persuasion and development of consensus. Such organizations are institutions of higher education where dispersed power, bargaining, and consensus are dominant features. Change is slow and laborious. Such organizations can compete effectively only in levels of turbulence 1 and/or 2 and perhaps 3. A crisis, though, provides leadership an opportunity to bypass the bargaining approach and the consensus culture to take action to save the organization (usually). Environmental school This school of thought suggests, given the environmental conditions, that an organization maneuvers accordingly in order to respond effectively (Hannan and Freeman, 1977). As indicated earlier, environmental variation has an impact on the strategy formulation (Aldrich and Pfeffer, 1976; Child, 1972; Hannan and Freeman, 1989; Lawrence and Lorsch, 1967a, b; Pfeffer and Salancik, 1978; Thompson, 1967). Strategy is often determined as a result of environmental turbulence (Buchholz and Rosenthal, 1995; Carroll, 1994; Drucker, 1980; Marcus, 1993; Peery, 1995; Post, 1978; Vernon-Wortzel, 1994).

Ansoffs connection Clearly, this is consistent with Ansoffs work. The turbulence scale is an instrument that facilitates top managers to analyze external conditions and maneuver accordingly. It is very surprising not to see Ansoff associated with this school of thought. This research was also published in 1993 (Ansoff and Sullivan), however, as indicated at the beginning of this paper, Ansoff is routinely quoted for his 1965 work only. Ansoffs premise has maintained that given the environmental conditions, the rm must establish the appropriate strategic aggressiveness and managerial responsiveness. Metaphorically, you have to dress for the occasion and the weather. Conguration school Lastly, this school of thought is broader and integrative since it considers on one hand organizations as a collection of attributes and behaviours but also integrates the suggestions of other schools. For example, the positioning school explores the changes within an industry; hence, changes are incremental, thus, this represents one conguration. On the other hand, an entrepreneurial setting suggests a transformative approach, and therefore, a different conguration. Consequently, the conguration school provides the more integrative approach (Chandler, 1962; Miles and Snow, 1978; Mintzebrg, 1979; Miller and Friesen, 1984). Ansoffs connection The strategic diagnosis is precisely a tool that allows rms to congure their strategy based on their specic external demands (stable to highly turbulent). Tables I-III clearly indicate the options for rms not only to congure their strategy but also to develop an optimal posture, again, based on the intensity of the external setting and whether the rm has the corresponding managerial capability and strategic orientation. Hence, Ansoffs approach is about conguring continuously, thus conrming his basic premise illustrated in his denition of the strategic diagnosis that each rm must consider developing an in-house response mechanism to t their needs. Summary Table IV summarizing the various schools of thought that represent the main stream in strategic thinking. Table IV has summarized all the main authors in each school, base disciplines (from where each approach derived), tools used (champions), and the intended messages. In addition, Table IV indicates how Ansoffs turbulence scale will match each school of thought. Identifying the respective turbulence levels suggests (based on Ansoff) the corresponding strategic orientation and organizational responsiveness. Therefore, the most critical element in strategic design, perhaps, is the capability of top management to have an acute knowledge of the complexity of an organizations environment, novelty of the challenges, rapidity of change, and degree of future visibility (Ansoffs basic elements constructing the turbulence scale). Furthermore, the overriding theme in the strategy debate is the whether the planning or learning approach is more effective. In addition, Figure 1 shows the basic premise (Mintzberg and Lampel, 1999) of the strategy used in relation to external world vs the internal process. However, this does not account for a critical factor: time. This is an important distinction in Ansoffs work that research has not explored adequately. For example, Figure 1 shows that when

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Unpredictable, confusing

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Environmental

Cognitive Learning Power (micro) Cultural Configuration

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Comprehensible, controllable

Power (macro)

Positioning Planning Rational Internal process as Design Entrepreneurial Natural

Figure 1. Strategy formation as many processes (from Mintzberg and Lampel, 1999)

Source: Mintzberg et al. (2003). Printed and electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, N.J

the external world is unpredictable and confusing, then the learning school is an appropriate approach. However, when the environment is fast changing (function of t), then there is no time for the company to learn or engage in lengthy political posturing and then engage in effective change. A similar argument could be made for the cognitive and power school of thought. Again, the time factor will determine the degree of unpredictability and confusion (according to Mintzberg and Lampel) and establish the required response. Hence, unpredictable environments require a corresponding managerial aggressiveness and capability (Table II). Figure 2 shows an alternative approach when considering that levels 1-3 are incremental and with the implication that there is time to change; while levels 4-5 are characterized as fast paced, unpredictable, and possess minimal or no time available. Discussion Table IV is an indication of Ansoffs comprehensive approach to strategy accommodating, potentially, a much wider range of schools of thought in strategy. In his book Corporate Strategy (1965), Ansoff developed the prescriptions, however, his later work and book on Implanting Strategic Management (1990) was instrumental in providing organizations research-based methods to achieve the needed change. The limitations of pages are restricting this paper to write only selective contributions of Ansoff; however, he spent his last 30-35 years rening his basic premise as it was developed in 1965 with concepts such as the diagnostic procedure (Ansoff et al., 1974), organizational capability (Ansoff, 1978), applied theory of strategic behavior (1979), strategic myopia (1984), and real-time response (Ansoff and McDonnell, 1990; Ansoff et al., 1980) are among the plethora of tools to facilitate strategy. His holistic approach to strategy can only be characterized by ubiquity.

Ansoff revisited
Discontinuous Environmental Entrepreneurial Configuration Cognitive Environmental Entrepreneurial Configuration Cognitive

External world as

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Environmental Configuration Learning Power Cultural Positioning Planning Levels 1-3 Stable Internal process as

Incremental

Environmental Entrepreneurial Configuration Cognitive

Levels 4-5 Creative

Figure 2. Strategy formation as many processes (Ansoff interface)

The Economist (2008) praises Ansoff as one of the management gurus in a historical series of strategic experts from Sun Tze and Machiavelli to the modern era. His contributions to the eld of strategy provide the intellectual domain for many strategy thinkers to follow and espouse some of his basic premises to create not only an academic discipline but a critical function in the corporate setting. Undeniably, organizations today have incorporated his original thinking of strategic, operational, and administrative work. His last major contribution was his 1990 book where he not only provided the intellectual area but also unpublished empirical results point to a more holistic and comprehensive work. For example, unpublished empirical results in banking predicted which banks were underperforming because of the gaps between environmental demands and internal capability and strategic aggressiveness; those banks were forced to merge or close down (Lewis, 1989). Lastly, when studying Ansoffs work, it is evident after a while that it is a giant puzzle that requires assembly to see the entire picture and how all the pieces work together. It is a fairly large puzzle and any attempt to provide an assessment of the holistic picture of strategic transformation without all the pieces is simply an incomplete attempt and unjust to Ansoffs approach and work. Moreover, Ansoffs lack of any desire to popularize his writings and provide a foundation to invite researchers and a wider body of the academia to engage his thinking pushed his writings on the periphery of core research agenda. Nevertheless, his approach to strategy from a holistic point of view and the multiple tools provide a contingency approach to strategic solutions for everyone. There is no universal prescription for success (Ansoff and Sullivan, 1993a, b); hence, different success behaviours are required at different levels of turbulence. Future research should continue on utilizing the strategic diagnosis not only to further validation but also as a tool that facilitates the development of an optimal strategic posture for future protability. In addition, research on managerial perception of environmental turbulence as a guiding post for strategic orientation will shed light

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into the psychology of top management as it relates to making decisions. The environment (external settings weather) is the same but top managers choose to follow different paths of strategy; hence, managerial perception of success differs. Therefore, additional research on what drives managers to perceive environmental turbulence as fast or slow remains to be explored. Moreover, additional research is needed that focuses exclusively on the Ansoffs work on discontinuous settings (dynamic environments) in order for academics to perceive Ansoff beyond the planning school of strategy.
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