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Scenarios and strategic management
Book Yes: more charity; more IT; more health emphasis; more work flexibility. On present trends charities could be one of Britain’s biggest industries and employers by early in the next century. But no discussion of whether we might see a new concept of a charity corporation? The impact of satellite communications, cellular phones and computers are all likely to radically change our lives over the next 20 years. These were all only mentioned in general terms; it is possible that research might show that TV inputs of a particular kind can have a psychologically damaging effectjust as it took decades to link smoking and cancer or the harmful effects of lead in petrol. No one could say that the whole subject is not important. Thinking about the potential of the future, understanding what is changing and why, and what it might mean for individual companies should be at the heart of corporate planning activities, as well as the basis for enlightened decision making in the 1990s and beyond. The report certainly stimulates and challenges our established view of the world and where it is going; as such, it could provide a valuable and effective focus for debate. The fact that there are inevitable aspects with which one disagrees can add to, rather than detract from, that potential as the reader is forced to examine where the disagreement lies. Ultimately, whether readers get value for money will depend more on how they use the report to explore the issues, than on the precise words that lie provocatively between its covers. BRUCE LLOYD
Scenarios and Strategic Management, MICHEL GODET, Butterworths (1987). 210 pp., A27.50 (hardback). Dr Michel Godet is Professor of Prospective and Strategic Planning at the Conservatoire National des Arts et Metiers (CNAM) and Scientific Advisor to the French Ministry for Industry and research. He has also acted as a consultant for Renault, the EEC and the OCED and is on the board of the journal Futures as well as publishing several books in this area. The book under review was published in 1985 under the title ‘Prospective et Planification Strategique’ in France and it was awarded the Grand Prix Harvard L’Expansion by a committee of French managers who graduated from the Harvard Business School. Therefore it is a pity that we have had to wait until now for an English translation as there has been a great many changes since 1985, mainly in the area of discussion on whether new developments in software can assist in strategic planning. Also when one reads a work which has created a good reputation one is often disappointed. Despite one reservation I was not. The main point of this work is to argue for a more positive approach to strategic planning. This is a combination of a wider use of scenarios plus a practical approach. In the introduction the author states that his aim is to respond to the needs for a synthesis of the wide range of methods and techniques used in strategic planning. It is pointed out that there are dozens of excellent titles on strategic management, but that the complete picture only emerges after reading a wide range of these books. Therefore the objective of this book is to attempt to fill this gap. The first section sets out some clear guidelines for planning followed by an excellent analysis of differing methods in the use of scenarios as a means of improving forecasting methods.
Reviews
149
The prospective approach accepts that there is a multiplicity of possible futures. It is pointed out that as the future has not yet been written it remains to be created. Therefore a scenario which identifies the major forces in change will enable one to get closer to a successful course of action. However one should not forget to constantly monitor this course of action for other changes. One of the reasons for the failure in planning is confusion between the following: Projection-an extension of the future Forecasting-an assessment of a trend over a given period Prospective analysis-a panorama of possible futures Planning-the practical means of achieving identified objcctives. Key factors
are then identified
*
Clarify
*
Explore
*
Adopt
*
Remember
*
Opt for a plurality
*
Question casters
present
actions
multiple a global
for future
action.
in the light of the future
and uncertain and systematic
that information
futures approach and forecasts
are not neutr.11
and complementarity
pre-conceived
These are:
approach
ideas on forecasts
and by forc-
One of the neglected area identified here is that forecasts arc never neutral, as they reflect the bias of the individual or group developing this approach. A practical detailed analysis deals with differing methods oi scenarios and how to build them. The first step in this approach is to list all the variables. Methods described include trend analysis, structural analysis, direct and indirect classification. cross impact anaysis, and Delphi. Case studies are included on these methods which go into some detail, and the role of the actor in relationship to forecasting is explored. Despite the fact that some techniques such as morphological analysis are not studied this is the most successful and interesting part of this work. The origins and aims of structure management are studied from the early work of Taylor and Fayol. The writings of Fayol are still of interest but the work of Taylor resulted in the attempt to automate people, not the production process, as we saw with the assembly line in the automotive industry unril robots took over. The key factors in management are seen as anticipation (analysis of the future) normative and reactive (setting of objectives) informative, interactive and participative. This is explored in relationship to acountancy, auditing. business porfolios and choices for strategic options. An important chapter deals with the relationship between strategic management and strategic culture. All organizations create their own culture. Thus invisible rules and taboos can emerge. These need to be identified so that the strategic plan can be presented in a form that will be accepted. This is a most difficult and largely unexplored area. It is in the final section of this work that one disappointment as the attempt to synthesize techniques is not as detailed as the rest of this useful guidelines are established. We need to work in this area in order to develop techniques.
feels a degree of these differing work. But some undertake more better planning
There are a number of developments assisting in this process. One is the development in information management. People
Long
150
Range
Planning
Vol.
22
October
who have developed methods of organizing information are librarians, information scientists, data processing managers and accounts but there is no concept as yet of information as a major overall resource. Recent developments are the concept of the information and knowledge engineers exploiting new developments in software. Thus we have decision support systems and expert systems which could assist us in a synthesis both in information management and in strategic planning. These two processes are not mutually exclusive and need to converge. This useful work will greatly assist in this process if it is read by people in the information profession as well as by strategic planners. This work deals with some very complex issues and the many diagrams greatly assist in this process, so the practitioner will find reference to this book most useful. Therefore I fail to understand why the publishers have not included an index which is vital for such a work.
BRIAN BURROWS, Futures Keynes,
Information
Associates,
Milton
REDWOOD,
Routledge
(1988).
U.K.
Popular Capitalism, 164 pp., ~25.00.
JOHN
Popular capitalism is a term embracing a set of policies designed to promote wider prosperity and ownership, not only in the mature economies of Western Europe but also in the poorer developing countries. For John Redwood there was a pressing need for an alternative to the concentration of monopoly power which had grown up in the 1960s in Britain and which culminated in the downfall of the Heath government in February 1974 at the hands of the trades unions. This alternative, popular capitalism, took hold in Britain in the early years of the 1980s and has since spread to other countries, in the ‘developed’ world such as France, and also to developing countries such as the Philippines and Jamaica.
There are eight ideas of economic liberalism which together constitute popular capitalism. They hinge around the liberalization of the industrial and commercial sector of the economy so as to create a responsible capitalist society where everyone has a stake in success. They include the privatization of public sector activities; the removal of nationalized industry monopoly, such as in the telecommunications industry in Britain; the encouragement of small businesses, and the reform of the taxation system both for individuals and the corporate sector; the development of private projects in areas where previously the government would have acted, such as the Channel Tunnel and Dartford Tunnel projects; the growth of stock markets and a more mature understanding of the role equity-raising capital markets have to play in the development of the world’s economies; the conversion of developing country debt into equity. So what are the benefits of this new economic liberalism? First among them is faster economic growth and Redwood cites the ‘shining example’ of the U.K. economy since 1981. Lower prices and better service, and the re-emergence of competition as the only true guardian of the customer interest are other benefits. Popular capitalism brings a greater mobility, out of the ‘equality of misery which the socialist and neo-Marxist state provides’, the disadvantage of which is that the inequality between those who have been able to take advantage of these
1989 opportunities marked.
and those
who
have not becomes
particularly
Underpinning the development of these ideas about popular capitalism is the re-emergence of a wider belief in democracy. Redwood sees this in Gorbachev’s reforms of the Russian economy, in the moves towards capitalism in China, in the movement which allowed Corozan Aquino to become President of the Philippines Republic in 1986, in Korea’s stirrings for freedom, and in the moves towards democracy perceived in various Latin American countries. Popular capitalism is the mechanism whereby the countries of Western Europe can lift themselves out of economic stagnation, and which will causes the stimulation of growth and adventure in the developing countries of the world. Redwood concludes that the mechanism is already in place, led and stimulated by the British experience. John Redwood is a former Head of the Prime Minister’s Policy Unit in the Thatcher government. He has long been in favour of wider ownership, privatization and deregulation, policies which he helped to formulate and implement in the United Kingdom. Elsewhere in the world he has advised governments in Jamaica, New Zealand, Singapore and France on industrial policy and privatization, and he has supervised many major share issues. Popular Capitalism is a lively and entertaining read, bearing tribute to the author’s wide knowledge and experience of politics and industrial policy, not only in the United Kingdom but in a much wider context. His examples are drawn from this experience and enrich the book, which is a passionate and highly personal account of the development of a set of ideas which may indeed, in his own words be ‘the most powerful set the world has seen since state-based nationalization-based, gofor-planned growth strategies developed in the post-war consensus’. As with most books written from a particular political perspective, many of the events and trends described are open to a variety of interpretations, but Redwood draws the strands together in a most convincing way and presents a plausible scenario. SARA COLE, Director,
George
Cole Technologies
Ltd, U.K.
The Management of Innovation in High Technology Small Firms: Innovation and Regional Development in Britain and the United States, RAY OAKLEY, Rov ROTHWELL and SARAH COOPER, Pinter Publishers, London (1988), 198 pp., L27.50. The role of small high technology firms in the development of new products and processes is a crucial one, but it needs to be kept in proper perspective. The great virtue of this book is that it sets out to measure in an objective way the characteristics and evolution of a group of such firms, over a 5 year period. This study is a follow-up of a survey of small high technology firms that Oakley made in 1981-2. He then examined and compared 174 firms in Scotland, South East England and the San Francisco Bay area of California. For this purpose ‘high technology industries’ were taken as ‘scientific and industrial instruments’ and ‘radio and electrical components’. The 54 Scottish firms in his original study represented nearly all the firms in this category in the area; the 60 firms each from South East England and the 60 from California represented samples stratified by size.
Scenarios and Strategic Management, MICHEL GODET, Butterworths (1987). 210 pp., A27.50 (hardback). Dr Michel Godet is Professor of Prospective and Strategic Planning at the Conservatoire National des Arts et Metiers (CNAM) and Scientific Advisor to the French Ministry for Industry and research. He has also acted as a consultant for Renault, the EEC and the OCED and is on the board of the journal Futures as well as publishing several books in this area. The book under review was published in 1985 under the title ‘Prospective et Planification Strategique’ in France and it was awarded the Grand Prix Harvard L’Expansion by a committee of French managers who graduated from the Harvard Business School. Therefore it is a pity that we have had to wait until now for an English translation as there has been a great many changes since 1985, mainly in the area of discussion on whether new developments in software can assist in strategic planning. Also when one reads a work which has created a good reputation one is often disappointed. Despite one reservation I was not. The main point of this work is to argue for a more positive approach to strategic planning. This is a combination of a wider use of scenarios plus a practical approach. In the introduction the author states that his aim is to respond to the needs for a synthesis of the wide range of methods and techniques used in strategic planning. It is pointed out that there are dozens of excellent titles on strategic management, but that the complete picture only emerges after reading a wide range of these books. Therefore the objective of this book is to attempt to fill this gap. The first section sets out some clear guidelines for planning followed by an excellent analysis of differing methods in the use of scenarios as a means of improving forecasting methods.
Reviews
149
The prospective approach accepts that there is a multiplicity of possible futures. It is pointed out that as the future has not yet been written it remains to be created. Therefore a scenario which identifies the major forces in change will enable one to get closer to a successful course of action. However one should not forget to constantly monitor this course of action for other changes. One of the reasons for the failure in planning is confusion between the following: Projection-an extension of the future Forecasting-an assessment of a trend over a given period Prospective analysis-a panorama of possible futures Planning-the practical means of achieving identified objcctives. Key factors
are then identified
*
Clarify
*
Explore
*
Adopt
*
Remember
*
Opt for a plurality
*
Question casters
present
actions
multiple a global
for future
action.
in the light of the future
and uncertain and systematic
that information
futures approach and forecasts
are not neutr.11
and complementarity
pre-conceived
These are:
approach
ideas on forecasts
and by forc-
One of the neglected area identified here is that forecasts arc never neutral, as they reflect the bias of the individual or group developing this approach. A practical detailed analysis deals with differing methods oi scenarios and how to build them. The first step in this approach is to list all the variables. Methods described include trend analysis, structural analysis, direct and indirect classification. cross impact anaysis, and Delphi. Case studies are included on these methods which go into some detail, and the role of the actor in relationship to forecasting is explored. Despite the fact that some techniques such as morphological analysis are not studied this is the most successful and interesting part of this work. The origins and aims of structure management are studied from the early work of Taylor and Fayol. The writings of Fayol are still of interest but the work of Taylor resulted in the attempt to automate people, not the production process, as we saw with the assembly line in the automotive industry unril robots took over. The key factors in management are seen as anticipation (analysis of the future) normative and reactive (setting of objectives) informative, interactive and participative. This is explored in relationship to acountancy, auditing. business porfolios and choices for strategic options. An important chapter deals with the relationship between strategic management and strategic culture. All organizations create their own culture. Thus invisible rules and taboos can emerge. These need to be identified so that the strategic plan can be presented in a form that will be accepted. This is a most difficult and largely unexplored area. It is in the final section of this work that one disappointment as the attempt to synthesize techniques is not as detailed as the rest of this useful guidelines are established. We need to work in this area in order to develop techniques.
feels a degree of these differing work. But some undertake more better planning
There are a number of developments assisting in this process. One is the development in information management. People
Long
150
Range
Planning
Vol.
22
October
who have developed methods of organizing information are librarians, information scientists, data processing managers and accounts but there is no concept as yet of information as a major overall resource. Recent developments are the concept of the information and knowledge engineers exploiting new developments in software. Thus we have decision support systems and expert systems which could assist us in a synthesis both in information management and in strategic planning. These two processes are not mutually exclusive and need to converge. This useful work will greatly assist in this process if it is read by people in the information profession as well as by strategic planners. This work deals with some very complex issues and the many diagrams greatly assist in this process, so the practitioner will find reference to this book most useful. Therefore I fail to understand why the publishers have not included an index which is vital for such a work.
BRIAN BURROWS, Futures Keynes,
Information
Associates,
Milton
REDWOOD,
Routledge
(1988).
U.K.
Popular Capitalism, 164 pp., ~25.00.
JOHN
Popular capitalism is a term embracing a set of policies designed to promote wider prosperity and ownership, not only in the mature economies of Western Europe but also in the poorer developing countries. For John Redwood there was a pressing need for an alternative to the concentration of monopoly power which had grown up in the 1960s in Britain and which culminated in the downfall of the Heath government in February 1974 at the hands of the trades unions. This alternative, popular capitalism, took hold in Britain in the early years of the 1980s and has since spread to other countries, in the ‘developed’ world such as France, and also to developing countries such as the Philippines and Jamaica.
There are eight ideas of economic liberalism which together constitute popular capitalism. They hinge around the liberalization of the industrial and commercial sector of the economy so as to create a responsible capitalist society where everyone has a stake in success. They include the privatization of public sector activities; the removal of nationalized industry monopoly, such as in the telecommunications industry in Britain; the encouragement of small businesses, and the reform of the taxation system both for individuals and the corporate sector; the development of private projects in areas where previously the government would have acted, such as the Channel Tunnel and Dartford Tunnel projects; the growth of stock markets and a more mature understanding of the role equity-raising capital markets have to play in the development of the world’s economies; the conversion of developing country debt into equity. So what are the benefits of this new economic liberalism? First among them is faster economic growth and Redwood cites the ‘shining example’ of the U.K. economy since 1981. Lower prices and better service, and the re-emergence of competition as the only true guardian of the customer interest are other benefits. Popular capitalism brings a greater mobility, out of the ‘equality of misery which the socialist and neo-Marxist state provides’, the disadvantage of which is that the inequality between those who have been able to take advantage of these
1989 opportunities marked.
and those
who
have not becomes
particularly
Underpinning the development of these ideas about popular capitalism is the re-emergence of a wider belief in democracy. Redwood sees this in Gorbachev’s reforms of the Russian economy, in the moves towards capitalism in China, in the movement which allowed Corozan Aquino to become President of the Philippines Republic in 1986, in Korea’s stirrings for freedom, and in the moves towards democracy perceived in various Latin American countries. Popular capitalism is the mechanism whereby the countries of Western Europe can lift themselves out of economic stagnation, and which will causes the stimulation of growth and adventure in the developing countries of the world. Redwood concludes that the mechanism is already in place, led and stimulated by the British experience. John Redwood is a former Head of the Prime Minister’s Policy Unit in the Thatcher government. He has long been in favour of wider ownership, privatization and deregulation, policies which he helped to formulate and implement in the United Kingdom. Elsewhere in the world he has advised governments in Jamaica, New Zealand, Singapore and France on industrial policy and privatization, and he has supervised many major share issues. Popular Capitalism is a lively and entertaining read, bearing tribute to the author’s wide knowledge and experience of politics and industrial policy, not only in the United Kingdom but in a much wider context. His examples are drawn from this experience and enrich the book, which is a passionate and highly personal account of the development of a set of ideas which may indeed, in his own words be ‘the most powerful set the world has seen since state-based nationalization-based, gofor-planned growth strategies developed in the post-war consensus’. As with most books written from a particular political perspective, many of the events and trends described are open to a variety of interpretations, but Redwood draws the strands together in a most convincing way and presents a plausible scenario. SARA COLE, Director,
George
Cole Technologies
Ltd, U.K.
The Management of Innovation in High Technology Small Firms: Innovation and Regional Development in Britain and the United States, RAY OAKLEY, Rov ROTHWELL and SARAH COOPER, Pinter Publishers, London (1988), 198 pp., L27.50. The role of small high technology firms in the development of new products and processes is a crucial one, but it needs to be kept in proper perspective. The great virtue of this book is that it sets out to measure in an objective way the characteristics and evolution of a group of such firms, over a 5 year period. This study is a follow-up of a survey of small high technology firms that Oakley made in 1981-2. He then examined and compared 174 firms in Scotland, South East England and the San Francisco Bay area of California. For this purpose ‘high technology industries’ were taken as ‘scientific and industrial instruments’ and ‘radio and electrical components’. The 54 Scottish firms in his original study represented nearly all the firms in this category in the area; the 60 firms each from South East England and the 60 from California represented samples stratified by size.