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Using strategic issue analysis
0024-6301/82/040045~5$03.00/0 Pergamon Press Ltd.
Long Range Planning, Vol. 15, No. 4,. pp. 45 to 49, 1982 Printed in Great Britain
Using
Strategic
Issue Analysis
Willium R. King, Professor of Business Administration,
Strategic issue analysis is proposed as a method for resolving the strategic issues that are an important part of strategic management. The SIA process is one in which a strategic issue information model is developed using a joint manager-analyst teamwork approach. The issue models and supporting data then provide the basis for strategic decision making. The approach has numerous advantages over other approachesboth more and less formal-for resolving the strategic questions that must be addressed in any comprehensive planning process.
The literature of planning often refers to the need for planners to consider ‘strategic issues’.‘--5 However, despite the widespread use of this phase there appears to be no agreement as to just what constitutes a strategic issue. More importantly, there is no methodology that specifically deals with the way in which consideration of such issues may be systematically and effectively integrated into the organization’s planning process. Because of the pervasiveness of the strategic issue concept, and in the light of evidence2 that such issues, however defined, can indeed prove valuable in planning, the development of such a methodology would appear to be important. This paper describes a methodology-termed ‘strategic issue analysis’-that can serve to bring the analysis and consideration of strategic issues into the mainstream of the strategic planning process.
Strategic
Issues
The working definition of ‘strategic issue’ used here is that it is a ‘condition or pressure’2 on the organization that involves: (a) possible possible
outcomes that are important to, or of high impact on, the organization’s
overall performance;
The author is Professor of Business Administration at the Graduate School of Business, University of Pittsburgh, Pittsburgh, PA 15260, U.S.A.
45
University
of Pittsburgh
(b) controversy, in that it is likely that reasonable people may take different positions concerning the impact of the issue; and (c) strategy consequences, in that the various possible outcomes implied by the issue would prescribe that different strategies should be implemented. Frequently, such issues can involving the organization’s ment-its competitors, the dustry, customers’ groups, somewhat more likely to be internal issues. Illustrative companies
be stated as questions external environgovernment, the inetc.-since these are controversial than are
of the strategic issues commonly face are:
that
many
Is the economic climate in country Y conducive to developing an integrated operation there? What is the likelihood that our competitor will introduce a major new product line next year? Will government financial disclosure requirements intensify in the next five years? What is our firm’s realistic growth the next decade? What is the likelihood the Q market?
capacity
over
that a new firm will enter
Will product liability laws be enacted and interpreted more stringently in the future than in the past?
Dealing
with Strategic
Issues
There are at least four ways in which strategic issues may be dealt with in an organization. First, they may simply be resolved by an individual or group in authority or recognized to be ‘expert’ in the area. For instance, if a strong-willed chief executive or chief economist decrees that the organization will plan for a strong economic upturn in the coming year, this strategic economic issue may be directly resolved. At the other extreme is the case in which
ofdealing with strategic issues an issue is formally modeled.
46
Long Range
Planning
Vol. 15
August
For instance, a formal predictive model might be developed to predict the likelihood of a major change in industry pricing strategy. Since the important strategic issues facing an organization are dynamic in nature, and since such models are inherently time-consuming and expensive to develop, this may be practical only for those issues that the firm repeatedly faces; yet, it is the theoretically best way of resolving strategic issues. Of greater importance because of the prevalence of use, is the ‘issue staff study’. In this method of resolution, an issue is posed and a planning staff sets about to collect data and conduct analyses to resolve the issue. The sometimes-voluminous reports of issue staff studies are the ‘grist for the mill’ of the strategic planning process in some organizations. The fourth approach to resolving has elements of each of the first different from each of them. This termed strategic issue analysis (SIA), (a) the application of judgment, authoritarian approach, (b) the use of approach, (c) data collection,
models,
r-l
as does the
the
modeling
(4
the narrow scope ofjudgment approach,
of the cost and time involved a predictive model,
P-4much (4
the important
1. Threat
in developing
role of staff analysts in rendering for which they may not be that is inherent in an issue staff
business judgments
best qualified study.
The Strategy
Issue Model
The concept of a strategic issue model is basic to the SIA approach. Such a model is merely an explication of the elements of the issue and their inter-relationships. Every complex strategic issue can be disaggregated into constituent parts. It is this logical hierarchical disaggregation that constitutes the strategic issue model. The various sub-issues and sub-sub-issues constitute an ‘information structure model’ of the issue that is much less difficult to develop than would be a predictive model. Yet, if used in an SIA process such as that to be described, such a model can be quite useful in strategic planning.
avoids:
cost Advantages Product Differentiation
Capital Requirements
--
Independent of Size
Access to Distribution Channels
I-
- L
Figure
of the authoritarian
Figure 1 shows a strategic issue model for the issue, ‘What is the likelihood that a new company will enter the Q market this year?’ It shows the ‘threat of entry’ strategic issue (based on that of Porter’)
as does the issue staff study.
Yet, the SIA approach
Economics of Scale
as does
strategic issues three; yet, it is approach, here involves:
1982
of entry
strategic
issue model
(adapted
from
Porter9)
Government Policy
Using disaggregated into the constituent parts: ‘capital requirements’, ‘accessibility of distribution channels’, ‘economies of scale’, ‘product differentiation’, ‘cost advantages’ and ‘government policy’. Each of these major elements is in turn broken down into successively more specific categories about which data may be collected
and assessed.
This is the key to the use of the issue model in the SIA process. The model is intended to specify the issue clearly and to provide access to data concerning the various constituent elements of the issue. Since it is not a predictive model, it is not intended to resolve the issue by answering the question. Rather, it is intended to ensure that the issue is clearly and specifically de_fned and that all pertinent data are provided to those who must judgmentally resolve the issue as a part of the planning process. The
Strategic
Issue Analysis
Process
Strategic
by the user in the design system.’
47
Issue Analysis and development
of the
In such participative processes, the user-manager can develop the understanding of the information and the system that is essential if he is to use it intelligently.8 Since a strategic issue model decomposes an issue into informational elements, it is reasonable to assume that the MIS experience would apply to this part of the strategic planning process as well. Thus, the SIA process incorporates a high level of manager participation and a great deal of interaction between managers, who will be the users of the issue models in their planning activities, and analysts, who will perform the development work in support of the planning process.
Based on this brief description of a strategic issue model, the SIA process can be described. The process involves the development of the issue model in a participative fashion that includes both who are presumed to be the prime managers, participants in a planning process, and staff planners, who provide support to the planning process.
The first step in the SIA process is the identification and preliminary statement of strategic issue. Issues may emanate from various points in the organization. In last year’s planning cycle, a controversy may have arisen that was not effectively resolved. The current economic climate may foster conOr, recent moves on the part of a troversy. competitor or the government may be perceived by some as harbingers of future problems.
The SIA process is described in Figure 2 in terms of a series of steps connected by a feedback loop. Each box in the figure describes a step in the process. The designations ‘M’, ‘A’, or ‘MA’ in each of the boxes describe the pre-eminent role of managers (M), analysts (A) or both (MA) in that step. The role of managers. and analysts is a critical element of the SIA process because it is designed to provide useful and substantive support to the planning process rather than to provide merely another esoteric study or forecast that is likely to go unused.
As shown in Figure 2, this phase is conducted primarily by the managers who are performing the organization’s planning. This is so because it is only they who can identify the potentially high-impact and controversial questions that will be important in the development of strategy and plans. If the identification of issues were performed by analysts, who have less knowledge of ‘the business’ and less currency about what may be truly important or potentially high in impact, the issues would be less useful to the planners.
Evidence that some participative and interactive process will be most useful in this regard is available from the field of management information systems h There, it is well recognized (MIS) development. that information systems that are not tailored to the preceived needs of user-managers are likely not to be used as intended. Moreover, the most successful information systems development processes have been found to be those that emphasize participation
On the other hand, the second step of the SIA process, involving the formal statement of the strategic issue must be done jointly by managers and analysts. This permits analysts to ask questions such as: ‘What do you mean by market penetration?‘; ‘What is the best indicator of our image with the customer?‘; etc. Such clarifying questions ensure that the issue will be precisely defined and agreed on by the managers. This avoids the all-too
Identification of Strategic Issue
H
Development of Formal Statement of issue
(MI
Figure
2. The SIA process
(MA)
A
b
Development of Preliminary Issue Model (A)
+
Critique and Revision of Model (MA)
3
Gathering
Use of Model in Planning Process
(A)
(MI
48
Long Range
Planning
Vol. 15
August
frequently-occurring situation in which the issues are debated in such broad and undefined terms that one suspects that each manager has a different understanding of just what the issue really is. The next stage of the process-the development of a preliminary issue model-is performed primarily by analysts. This step involves the delineation of the issue’s constituent elements by analysts who are expert in the areas. For instance, the ‘threat of entry’ issue described in Figure 1 may be referred to staff economists who would be charged with defining the constituent elements of the issue in an operational manner. The specific model described in Figure 1 is in fact based on a theory developed by an economist who has studied the competitive market.’ The ‘operational’ criterion means that the elements should be defined in ways that are measurable, or at least assessable.
For instance, although the ‘government policy’ dimension of the ‘threat of entry’ is not measurable in a quantitative sense, it is directly assessable in terms of the specific areas of licensing requirements, limits of access to raw materials, etc. Once a preliminary model has been developed by the experts, it must be discussed with the managers who are to be its users. This step of critiquing and revising the model is performed by managers and analysts acting in concert to discuss, understand and revise the model to make it as specific and as useful as possible. Clearly, the high involvement and influence of managers in this process prescribes a concept of an issue model that is somewhat different from the decision model concepts that are pervasively used in management science and operations research. The role of the issue model is to explicate and synthesize the managers’ common understanding and definition of the issue, rather than some academic or theoretically correct definition of it. This view of an issue model inherently requires that the plannermanagers, who will use the model, be involved in developing it, whereas the more formal view of a model is such that it may be best for the analyst to develop it because he has the best understanding of the underlying economic theory, modeling techniques, etc.” Once the issue model is developed, data are gathered by analysts to permit the assessment of each of the ‘tips of the branches’ of the issue model ‘tree’. Again using the ‘threat of entry’ issue in Figure 1 as an example, analysts would need to gather available data concerning licensing requirements, economies of scale in various areas of the business and the wide variety of other dimensions at the ‘bottom’ of the tree. Some of these will be quantitative in nature-for instance, those under Some may be assessable only ‘capital requirements’. in qualitative terms-e.g., ‘good’, ‘moderate’, or ‘poor’-such as for ‘access to distribution channels’.
1982 Others may be described factually with a brief statement-such as with licensing requirements. After the data have been collected, the issue model is ready for use. Of course, the feedback loop from each stage of the process back to the one in which the issue is formally stated must be recognized. This merely means that the issue may require redefinition as a consequence of the happenings in one of these subsequent phases.
Using the Results Issue Analysis
of the Strategic
The use to be made of the detailed strategic issue model that is the output of the SIA process in planning is straightforward. The issue model, including the data that have been collected as an assessment of each branch of the tree, represents the organization’s assessment of what the issue really means together with the best information that it can obtain
about each constituent
element
of the issue.
Despite the fact that the model provides no overall assessment, as would a predictive model, it provides an excellent basis for making judgments-both by individuals and by group concensus. The model, as presented here, does not incorporate any specific assessment of the relative importance of each part of the issue. These important assessments are left to individuals based on their own background and experience and to the planning groups in which When each participant in the they participate. planning process is forced to deal with each issue in the specific terms of the strategic issue model rather than in vague and undefined terms, real concensus is possible. Consensus that is achieved without the specificity that is imposed by the issue model is often superficial, since agreement can be reached in terms of words that may mean different things to the parties to the agreement. Since issues are directly related to alternative strategies, once a degree of concensus is achieved, the consequent strategic decisions are generally identified. It remains only to explicate the strategy detail and to develop a plan for in greater implementing it. Thus, the SIA process fits as an integral part of the strategic decision-making process.
Advantages
of the SIA Approach
The SIA approach has numerous advantages over each of the three alternative approaches discussed earlier. In contrast to the authoritarian approach, the participative SIA approach widens the scope of judgment and focuses disagreements on specific sub-issues. In an
Using Strategic authoritarian environment, the scope of judgment is more narrow, even if the judgment of others is solicited, and it is certainly less specific. Without the issue model, disagreements are often about conclusions and consequences and hence are difficult to resolve. With the issue model, disagreements focus on specific constituent elements and are therefore easier to resolve. A main advantage more
traditional
of the decision
SIA approach modeling
.
over
approach
the is
clear. It is less time-consuming and expenslve to develop issue models than to develop sophisticated predictive models. The SIA approach allows judgment to be exercised concerning specific constituent elements of an issue rather than, as often is the case, about whether or not to accept or reject the comprehensive prediction that is the output of a more complex model. Moreover, the inherently less complex strategic issue model is likely to have both greater validity and greater utility than a more sophisticated decision model. This is so because it is simpler and more readily understood by managers and because far less in the way of substantive compromises need be made in developing this sort of model than is decision usually the case with mathematical models. The advantages of the SIA approach over the strategic issue staff study are not so apparent, but they are nonetheless substantial. While staff analysts play an important role in the SIA process, their judgments are not supreme. In the typical report of an issue staff study, analysts determine the order of presentation, the topics to be discussed (which are
Issue Analysis
49
equivalent to the subissues in SIA), the data to be presented, and the conclusions to be drawn. In the SIA approach, each of these is done jointly, with the latter most important one-the drawing of conclusions-being left to the managers who are best equipped to do so. Since the planner-managers are also those whose careers will.be most directly affected by the quality of the results, this would appear to offer a significant benefit from the standpoint of motivation and accountability as well as from that of allocating the making of business judgments to experienced managers rather than to analysts.
References (1) D. Barrows, Planning in the Ministry of Industry and Tourism, Long Range Planning, 12 (6), December (1979).
(2) J. K. Brown, The Business of Issues: Coping with the Company’s Environments, Conference Board Report No. 758 (1979).
(3) Ft. W. Cobb and C. D. Elder, Participation in American Politics: The Dynamics of Agenda Building, Johns Hopkins University Press (1972).
(4) M. Crenson, The Unpolitics of Air Pollution. Johns Hopkins University Press (1971).
(5) I. C. MacMillan, Strategy Formulation: PoliticalConcepts,
West
Publishing Company (1978).
(6) H. C. Lucas, Jr., Why Information Systems Fail, Columbia University Press (1975).
(7) W. R. King and D. I. Cleland, Manager-analyst teamwork in MIS, Business Horizons, April (1971). (8) R. L. Ackoff, A Concept of Corporate Planning, Chapter 6, John Wiley (1970).
(9) M. E. Porter, How competitive forces shape strategy, Harvard Business Review, April (1979).
(10) W. Ft. King, Methodological optimality in OR, Omega, February (1976).
Long Range Planning, Vol. 15, No. 4,. pp. 45 to 49, 1982 Printed in Great Britain
Using
Strategic
Issue Analysis
Willium R. King, Professor of Business Administration,
Strategic issue analysis is proposed as a method for resolving the strategic issues that are an important part of strategic management. The SIA process is one in which a strategic issue information model is developed using a joint manager-analyst teamwork approach. The issue models and supporting data then provide the basis for strategic decision making. The approach has numerous advantages over other approachesboth more and less formal-for resolving the strategic questions that must be addressed in any comprehensive planning process.
The literature of planning often refers to the need for planners to consider ‘strategic issues’.‘--5 However, despite the widespread use of this phase there appears to be no agreement as to just what constitutes a strategic issue. More importantly, there is no methodology that specifically deals with the way in which consideration of such issues may be systematically and effectively integrated into the organization’s planning process. Because of the pervasiveness of the strategic issue concept, and in the light of evidence2 that such issues, however defined, can indeed prove valuable in planning, the development of such a methodology would appear to be important. This paper describes a methodology-termed ‘strategic issue analysis’-that can serve to bring the analysis and consideration of strategic issues into the mainstream of the strategic planning process.
Strategic
Issues
The working definition of ‘strategic issue’ used here is that it is a ‘condition or pressure’2 on the organization that involves: (a) possible possible
outcomes that are important to, or of high impact on, the organization’s
overall performance;
The author is Professor of Business Administration at the Graduate School of Business, University of Pittsburgh, Pittsburgh, PA 15260, U.S.A.
45
University
of Pittsburgh
(b) controversy, in that it is likely that reasonable people may take different positions concerning the impact of the issue; and (c) strategy consequences, in that the various possible outcomes implied by the issue would prescribe that different strategies should be implemented. Frequently, such issues can involving the organization’s ment-its competitors, the dustry, customers’ groups, somewhat more likely to be internal issues. Illustrative companies
be stated as questions external environgovernment, the inetc.-since these are controversial than are
of the strategic issues commonly face are:
that
many
Is the economic climate in country Y conducive to developing an integrated operation there? What is the likelihood that our competitor will introduce a major new product line next year? Will government financial disclosure requirements intensify in the next five years? What is our firm’s realistic growth the next decade? What is the likelihood the Q market?
capacity
over
that a new firm will enter
Will product liability laws be enacted and interpreted more stringently in the future than in the past?
Dealing
with Strategic
Issues
There are at least four ways in which strategic issues may be dealt with in an organization. First, they may simply be resolved by an individual or group in authority or recognized to be ‘expert’ in the area. For instance, if a strong-willed chief executive or chief economist decrees that the organization will plan for a strong economic upturn in the coming year, this strategic economic issue may be directly resolved. At the other extreme is the case in which
ofdealing with strategic issues an issue is formally modeled.
46
Long Range
Planning
Vol. 15
August
For instance, a formal predictive model might be developed to predict the likelihood of a major change in industry pricing strategy. Since the important strategic issues facing an organization are dynamic in nature, and since such models are inherently time-consuming and expensive to develop, this may be practical only for those issues that the firm repeatedly faces; yet, it is the theoretically best way of resolving strategic issues. Of greater importance because of the prevalence of use, is the ‘issue staff study’. In this method of resolution, an issue is posed and a planning staff sets about to collect data and conduct analyses to resolve the issue. The sometimes-voluminous reports of issue staff studies are the ‘grist for the mill’ of the strategic planning process in some organizations. The fourth approach to resolving has elements of each of the first different from each of them. This termed strategic issue analysis (SIA), (a) the application of judgment, authoritarian approach, (b) the use of approach, (c) data collection,
models,
r-l
as does the
the
modeling
(4
the narrow scope ofjudgment approach,
of the cost and time involved a predictive model,
P-4much (4
the important
1. Threat
in developing
role of staff analysts in rendering for which they may not be that is inherent in an issue staff
business judgments
best qualified study.
The Strategy
Issue Model
The concept of a strategic issue model is basic to the SIA approach. Such a model is merely an explication of the elements of the issue and their inter-relationships. Every complex strategic issue can be disaggregated into constituent parts. It is this logical hierarchical disaggregation that constitutes the strategic issue model. The various sub-issues and sub-sub-issues constitute an ‘information structure model’ of the issue that is much less difficult to develop than would be a predictive model. Yet, if used in an SIA process such as that to be described, such a model can be quite useful in strategic planning.
avoids:
cost Advantages Product Differentiation
Capital Requirements
--
Independent of Size
Access to Distribution Channels
I-
- L
Figure
of the authoritarian
Figure 1 shows a strategic issue model for the issue, ‘What is the likelihood that a new company will enter the Q market this year?’ It shows the ‘threat of entry’ strategic issue (based on that of Porter’)
as does the issue staff study.
Yet, the SIA approach
Economics of Scale
as does
strategic issues three; yet, it is approach, here involves:
1982
of entry
strategic
issue model
(adapted
from
Porter9)
Government Policy
Using disaggregated into the constituent parts: ‘capital requirements’, ‘accessibility of distribution channels’, ‘economies of scale’, ‘product differentiation’, ‘cost advantages’ and ‘government policy’. Each of these major elements is in turn broken down into successively more specific categories about which data may be collected
and assessed.
This is the key to the use of the issue model in the SIA process. The model is intended to specify the issue clearly and to provide access to data concerning the various constituent elements of the issue. Since it is not a predictive model, it is not intended to resolve the issue by answering the question. Rather, it is intended to ensure that the issue is clearly and specifically de_fned and that all pertinent data are provided to those who must judgmentally resolve the issue as a part of the planning process. The
Strategic
Issue Analysis
Process
Strategic
by the user in the design system.’
47
Issue Analysis and development
of the
In such participative processes, the user-manager can develop the understanding of the information and the system that is essential if he is to use it intelligently.8 Since a strategic issue model decomposes an issue into informational elements, it is reasonable to assume that the MIS experience would apply to this part of the strategic planning process as well. Thus, the SIA process incorporates a high level of manager participation and a great deal of interaction between managers, who will be the users of the issue models in their planning activities, and analysts, who will perform the development work in support of the planning process.
Based on this brief description of a strategic issue model, the SIA process can be described. The process involves the development of the issue model in a participative fashion that includes both who are presumed to be the prime managers, participants in a planning process, and staff planners, who provide support to the planning process.
The first step in the SIA process is the identification and preliminary statement of strategic issue. Issues may emanate from various points in the organization. In last year’s planning cycle, a controversy may have arisen that was not effectively resolved. The current economic climate may foster conOr, recent moves on the part of a troversy. competitor or the government may be perceived by some as harbingers of future problems.
The SIA process is described in Figure 2 in terms of a series of steps connected by a feedback loop. Each box in the figure describes a step in the process. The designations ‘M’, ‘A’, or ‘MA’ in each of the boxes describe the pre-eminent role of managers (M), analysts (A) or both (MA) in that step. The role of managers. and analysts is a critical element of the SIA process because it is designed to provide useful and substantive support to the planning process rather than to provide merely another esoteric study or forecast that is likely to go unused.
As shown in Figure 2, this phase is conducted primarily by the managers who are performing the organization’s planning. This is so because it is only they who can identify the potentially high-impact and controversial questions that will be important in the development of strategy and plans. If the identification of issues were performed by analysts, who have less knowledge of ‘the business’ and less currency about what may be truly important or potentially high in impact, the issues would be less useful to the planners.
Evidence that some participative and interactive process will be most useful in this regard is available from the field of management information systems h There, it is well recognized (MIS) development. that information systems that are not tailored to the preceived needs of user-managers are likely not to be used as intended. Moreover, the most successful information systems development processes have been found to be those that emphasize participation
On the other hand, the second step of the SIA process, involving the formal statement of the strategic issue must be done jointly by managers and analysts. This permits analysts to ask questions such as: ‘What do you mean by market penetration?‘; ‘What is the best indicator of our image with the customer?‘; etc. Such clarifying questions ensure that the issue will be precisely defined and agreed on by the managers. This avoids the all-too
Identification of Strategic Issue
H
Development of Formal Statement of issue
(MI
Figure
2. The SIA process
(MA)
A
b
Development of Preliminary Issue Model (A)
+
Critique and Revision of Model (MA)
3
Gathering
Use of Model in Planning Process
(A)
(MI
48
Long Range
Planning
Vol. 15
August
frequently-occurring situation in which the issues are debated in such broad and undefined terms that one suspects that each manager has a different understanding of just what the issue really is. The next stage of the process-the development of a preliminary issue model-is performed primarily by analysts. This step involves the delineation of the issue’s constituent elements by analysts who are expert in the areas. For instance, the ‘threat of entry’ issue described in Figure 1 may be referred to staff economists who would be charged with defining the constituent elements of the issue in an operational manner. The specific model described in Figure 1 is in fact based on a theory developed by an economist who has studied the competitive market.’ The ‘operational’ criterion means that the elements should be defined in ways that are measurable, or at least assessable.
For instance, although the ‘government policy’ dimension of the ‘threat of entry’ is not measurable in a quantitative sense, it is directly assessable in terms of the specific areas of licensing requirements, limits of access to raw materials, etc. Once a preliminary model has been developed by the experts, it must be discussed with the managers who are to be its users. This step of critiquing and revising the model is performed by managers and analysts acting in concert to discuss, understand and revise the model to make it as specific and as useful as possible. Clearly, the high involvement and influence of managers in this process prescribes a concept of an issue model that is somewhat different from the decision model concepts that are pervasively used in management science and operations research. The role of the issue model is to explicate and synthesize the managers’ common understanding and definition of the issue, rather than some academic or theoretically correct definition of it. This view of an issue model inherently requires that the plannermanagers, who will use the model, be involved in developing it, whereas the more formal view of a model is such that it may be best for the analyst to develop it because he has the best understanding of the underlying economic theory, modeling techniques, etc.” Once the issue model is developed, data are gathered by analysts to permit the assessment of each of the ‘tips of the branches’ of the issue model ‘tree’. Again using the ‘threat of entry’ issue in Figure 1 as an example, analysts would need to gather available data concerning licensing requirements, economies of scale in various areas of the business and the wide variety of other dimensions at the ‘bottom’ of the tree. Some of these will be quantitative in nature-for instance, those under Some may be assessable only ‘capital requirements’. in qualitative terms-e.g., ‘good’, ‘moderate’, or ‘poor’-such as for ‘access to distribution channels’.
1982 Others may be described factually with a brief statement-such as with licensing requirements. After the data have been collected, the issue model is ready for use. Of course, the feedback loop from each stage of the process back to the one in which the issue is formally stated must be recognized. This merely means that the issue may require redefinition as a consequence of the happenings in one of these subsequent phases.
Using the Results Issue Analysis
of the Strategic
The use to be made of the detailed strategic issue model that is the output of the SIA process in planning is straightforward. The issue model, including the data that have been collected as an assessment of each branch of the tree, represents the organization’s assessment of what the issue really means together with the best information that it can obtain
about each constituent
element
of the issue.
Despite the fact that the model provides no overall assessment, as would a predictive model, it provides an excellent basis for making judgments-both by individuals and by group concensus. The model, as presented here, does not incorporate any specific assessment of the relative importance of each part of the issue. These important assessments are left to individuals based on their own background and experience and to the planning groups in which When each participant in the they participate. planning process is forced to deal with each issue in the specific terms of the strategic issue model rather than in vague and undefined terms, real concensus is possible. Consensus that is achieved without the specificity that is imposed by the issue model is often superficial, since agreement can be reached in terms of words that may mean different things to the parties to the agreement. Since issues are directly related to alternative strategies, once a degree of concensus is achieved, the consequent strategic decisions are generally identified. It remains only to explicate the strategy detail and to develop a plan for in greater implementing it. Thus, the SIA process fits as an integral part of the strategic decision-making process.
Advantages
of the SIA Approach
The SIA approach has numerous advantages over each of the three alternative approaches discussed earlier. In contrast to the authoritarian approach, the participative SIA approach widens the scope of judgment and focuses disagreements on specific sub-issues. In an
Using Strategic authoritarian environment, the scope of judgment is more narrow, even if the judgment of others is solicited, and it is certainly less specific. Without the issue model, disagreements are often about conclusions and consequences and hence are difficult to resolve. With the issue model, disagreements focus on specific constituent elements and are therefore easier to resolve. A main advantage more
traditional
of the decision
SIA approach modeling
.
over
approach
the is
clear. It is less time-consuming and expenslve to develop issue models than to develop sophisticated predictive models. The SIA approach allows judgment to be exercised concerning specific constituent elements of an issue rather than, as often is the case, about whether or not to accept or reject the comprehensive prediction that is the output of a more complex model. Moreover, the inherently less complex strategic issue model is likely to have both greater validity and greater utility than a more sophisticated decision model. This is so because it is simpler and more readily understood by managers and because far less in the way of substantive compromises need be made in developing this sort of model than is decision usually the case with mathematical models. The advantages of the SIA approach over the strategic issue staff study are not so apparent, but they are nonetheless substantial. While staff analysts play an important role in the SIA process, their judgments are not supreme. In the typical report of an issue staff study, analysts determine the order of presentation, the topics to be discussed (which are
Issue Analysis
49
equivalent to the subissues in SIA), the data to be presented, and the conclusions to be drawn. In the SIA approach, each of these is done jointly, with the latter most important one-the drawing of conclusions-being left to the managers who are best equipped to do so. Since the planner-managers are also those whose careers will.be most directly affected by the quality of the results, this would appear to offer a significant benefit from the standpoint of motivation and accountability as well as from that of allocating the making of business judgments to experienced managers rather than to analysts.
References (1) D. Barrows, Planning in the Ministry of Industry and Tourism, Long Range Planning, 12 (6), December (1979).
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