Mintzberg proposed ten schools of thought on strategy formation:

‘The first three schools are prescriptive in nature - more concerned with how strategies should be formulated than with how they necessarily do form. … The six schools that follow consider specific aspects of the process of strategy formation, and have been concerned less with prescribing ideal strategic behaviour than with describing how strategies do, in fact, get made. Final group contains but one school. People in this school, in seeking to be integrative, cluster the various elements of … the strategy-making process.’

From the six describing schools, the first two concentrates on individual level formation and following four have tried to open up the process beyond individual, to other forces and other actors.

THE PRESCRIPTIVE SCHOOL:

1. Design School: strategy formation as a process of conception

Design school, which presented in the 1960s the basic framework on which the other two prescriptive schools built, focuses on strategy formation as a process of informal design, essentially one of conception. School’s most famous notion is SWOT – the assessment of Strengths and Weaknesses of the organization in the light of the Opportunities and Threats in its environment. At its simplest, the design school proposes a model of strategy making that seeks to attain a match, or fit, between internal capabilities and external possibilities.

Design school deals with questions like:

”What is the underlying structure of the industry in which the firm participates?” “How might foreseeable change in the social, political, and macroeconomic context

impact the industry or the firm?”

Clearly design school deals with both internal and external subject of data. The underlying structure of the industry and internal capabilities can be evaluated with analysis of quantitative or ‘hard’ data but more suitable way, in light of strategy formulation as a process of conception, is evaluation of qualitative or ‘soft’ information. The sources of information seem to be the internal sources in internal subjects and external sources in external subjects.

2. Planning School: strategy formation as a formal process

Planning school formalize design school’s perspective, seeing strategy making as a more detached and systematic process of formal planning.

Central message is: formal procedure, formal training, and lots of numbers.

The most of the school’s strategic planning models are reduced to same basic idea: take the SWOT model, divide it into neatly delineated steps, articulate each of these with lots of checklists and techniques, and give special attention to the setting of objectives on the front end and the elaboration of budgets and operating plans on the back end.

Some newer aspects of planning school include qualitative information, like scenario building, but school’s spirit is in formal procedures and analysing mainly quantitative data. Otherwise subjects and sources of information seem to be alike in design school: the internal sources in internal subjects and external sources in external subjects.

3. Positioning School: strategy formation as an analytical process

Planning school was somewhat displaced in the 1980s by positioning school, concerned with the actual content of strategies than with the process of strategy formation. It is referred to as the positioning school because it focuses on the selection of strategic positions in the economic marketplace.

Positioning school argues that only a few key strategies – as positions in the economic marketplace – are desirable in any given industry.

Strategic ‘planning’ process focused more narrowly on calculation – to be specific, on the close-ended selection of generic strategic positions. Academics ran statistical studies from established data bases to find out which strategies seemed to work best where, while consultants touted favourable strategies for particular clients, or else promoted frameworks for selecting such strategies.

Some attention was given also for organization itself but its position in strategic planning was only after preferred strategy was selected – strategy precedes structure. But another form of ‘structure’, that of the industry, was added on top, so that industry drove strategic position that drove organizational structure.

Thus only information needed in strategic planning is external information collected from external sources, preferable in quantifiable form.

THE DESCRIPTIVE SCHOOL:

4. Entrepreneurial School: strategy formation as a visionary process

Some prominent writers have long associated strategy with entrepreneurship, and have described the process in terms of the creation of vision by a great leader. Entrepreneurial school, standing between prescriptive and descriptive schools, takes formal leadership seriously, rooting strategy formation in the mental processes of the chief executive.

School stresses the most innate of mental states and processes – intuition, judgement, wisdom, experience, and insight.

The most central concept of this school is vision: a mental representation of strategy created or at least expressed in the head of the leader.

Information needed is Qualitative information, e.g., opportunities in markets, on technical competencies or product innovation inside the company, or on service innovations derived from customer feedback.

On the other hand, some people are more focused on quantitative information than qualitative, and thus quantitative information with same sources and subjects is source for their visions. Basically, everything can work as a source of visions depending on the visionary’s mental processes.

5. Cognitive School: strategy formation as a mental process

If strategy can be personalized vision, then strategy formation has also to be understood as the process of concept attainment in a person’s head. Accordingly, a small but important cognitive school has also developed that seeks to use the messages of cognitive psychology to enter the strategist’s mind.

Cognitive school has two different wings:

More positivistic, treats the processing and structuring of knowledge as an effort to produce some kind of objective motion picture of the world.

The other wing sees all of this as subjective: strategy is some kind of interpretation of the world.

As cognitive school concentrates more on what is happening in strategist’s mind and how it processes the information, it gives no clues of what kind of information is needed. As with entrepreneurial school, any kind of information can be attached with this school.

6. Learning School: strategy formation as an emergent process

For the learning school, the world is too complex to allow strategies to be developed all at once as clear plans or visions. Hence strategies must emerge in small steps, as an organization adapts, or “learns”.

According to this school, strategies emerge as people come to learn about situation as well as their organization’s capability of dealing with it. Eventually they converge on patterns of behaviour that work. Thus, strategies can be traced back to a variety of little

actions and decisions made by all sorts of different people. In other word, informed individuals anywhere in an organization can contribute to the strategy process.

Information needs of learning school are not clear, but could include anything. However, situation in external environment and internal capabilities are highlighted, and thus information needs could be described to be similar as in design school. Biggest difference is the user of this information. In previous schools, chief strategist or group of strategists used this information. In learning school, instead, all employees of an organization can contribute to strategy creation.

7. Power School: strategy formation as a process of negotiation

Similar to learning school, but with different twist, is the power school, which treats strategy formation as a process of negotiation, whether by conflicting groups within an organization or by organizations themselves as they confront their external environments. Power relations surround organizations; they can also infuse them. There exist two branches also in this school.

What could be called micro power deals with the play of politics inside an organization.

Macro power concerns the use of power by the organization.

One focuses on internal actors conflicting with their colleagues, usually out of self-interest; the other sees the organization acting out of its own self-interest, in conflict, or cooperation, with other organizations.

Information needs of political school are not clear, but some conclusions can be drawn. It seems that in micro power branch internal information is highlighted, both as a source and subject of information.

At the same time, in macro power branch external information is highlighted, both as a source and subject of information. Information needs can be quantitative, like budgets, proportions, and volumes, or qualitative, like values, perceptions, and views.

8. Cultural School: strategy formation as a collective process

In contrast to the power school is the cultural school that considers strategy formation to be rooted in the culture of the organization. Hence the process is viewed as fundamentally collective and cooperative. Culture is what is unique about the way we do all things. It is about what differentiates one organization from another. In cultural school, strategy formation is a process of social interaction, based on the beliefs and understandings shared by the members of an organization. Strategy takes the form of perspective above all, rooted in collective intensions.

Information that plays most significant role in this school is thus information concerning beliefs and values of members of an organization.

9. Environmental School: strategy formation as a reactive process

Proponents of environmental school, organization theorists believe strategy formation is a reactive process in which the initiative lies not inside the organization, but with its external context. Accordingly, they seek to understand the pressures imposed on organizations. Other schools sees environment as a factor, the environmental school sees it as an actor – indeed the actor. As the environment is the actor in strategic management, information concerning it is also most important for this school. This information can include both qualitative and quantitative information.

THE INTEGRATIVE SCHOOL:

10. Configuration School: strategy formation as a process of transformation

People in this school, in seeking to be integrative, cluster the various elements of the strategy-making process, the content of strategies, organizational structures and their contexts, into distinct stages or episodes, e.g., of entrepreneurial growth or stable maturity, sometimes sequenced over time to describe the life cycle of organizations. But if organizations settle into stable states, then strategy making has to describe the leap from one state to another. And so, another side of this school describes the process as one of transformation, which incorporates much of the huge prescriptive literature and practice on “strategic change”.

Information needs in this school are depending which school or which stage is currently applied.

Limitations of this analysis include at least two things:

Classification of school of thoughts has been made using quite different criteria, and thus classification doesn’t fill all possibilities of the business information cube.

Because information needs of different schools has not been in the focus in classification, it is impossible to evaluate, for example, the value of internal information about external conditions and external information about internal conditions, and thus these alternatives are altogether missing from results of our evaluation, with small exception in entrepreneurial and cognitive schools.