You should not be surprised to find differences among the strategic preferences of the various managers of a firm. Each of these managers, after all, will be working from a somewhat different personal background and job context. As a matter of fact, you should expect that marketing and operations managers, for example, will read the facts of a situ- ation differently, see different options for action, and weigh consequences unevenly. This is one of the prime arguments for articulating a strategy in the first place—to provide a unifying theme that will help to bring these different strategic preferences together, and establish a common basis for management action. But a good strategic process alone may not be enough to achieve and sustain a workable consistency of preference in a diverse management group.
It follows that you should identify the strategic preferences of the key management groups in a business and determine how consistent these preferences are with those required by the strategic proposal under consideration. This is anticipated in Table 7.3, which calls for analysis by management group. Again, the art of the analysis is to be care- fully selective in choosing which particular groups and preference issues to study.
You will probably encounter some obstacles in the process of identifying the real pref- erences of diverse groups of managers. Some will be in subordinate and perhaps vulnerable positions and reluctant to openly express their views. In firms that have learned how to support an open expression of opinions and to avoid the difficulties of frozen preferences, this obstacle will not be a serious problem. Preferences may be carefully and even ambigu- ously posed, but they will be genuine. In relatively unhealthy firms, you may find that managers and groups operate more or less continuously with hidden agendas. Even senior and experienced people may be less than candid. In unhealthy businesses it is often diffi- cult to tell what a manager’s real position and preferences are, even when he or she openly supports a strategic initiative. The great fear is that the manager will nod yes, and then walk away and do nothing to help implement the strategy.
In our discussion we will assume that you are dealing with a management system that is healthy enough for the essential preferences of the managers to be identified, even if this takes careful diagnostic work. If a firm is so politicized that it is impossible to develop a reasonably valid impression of management preferences, the problem is so fundamental that it raises the question of the viability of the business, which is beyond our immediate scope.
The following paragraphs discuss the conflicts that might arise from differences within a management group in three increasingly difficult categories.
Minimal Conflict This is a situation that emerges when there are minimal differences among the strategic preferences of the key managers and groups in a business. Such a com- monality of preference is an important feature of companies that have had strong leaders for some time, or that have otherwise built up clear traditions and culture. In these companies, the managers that succeed over time are those who conform to the dominant ethos.
Homogeneity across a management group can be a mixed blessing, however. It can be a powerful asset if the preferences line up with the strategic proposal under consideration. Minor conflicts can probably be ironed out easily, because the group is used to the give and take of working together. However, if these preferences are inconsistent with strategic needs, you now face the problems of what Irving Janis calls “groupthink,” in which the concurrence of a cohesive group overrides a realistic appraisal of new realities.28
Moderate Conflict At this level it is often possible to bring diverse preferences into line with strategy by further documentation, persuasion, changes in the stakes for par- ticular individuals, or changes in management assignments. A very important reason for having a strategic planning process in a business (and for having the process driven by line managers) is to work out preference conflicts as they happen. Even if a conflict still exists at the end of the process, the managers with problems will fully understand why the proposed course is deemed necessary, and may be more flexible in adapting to it.
It is difficult to resolve conflicts between strategic requirements and the preferences of a group of managers by modifying strategy; the most likely route to reconciliation is through organizational action. From a diagnostic standpoint this means, first, identifying the actions that are likely to bring preferences into alignment and second, identifying the organizational capabilities that will be required for implementation of the action.
Consider the task of bringing together differences of preference across business functions. It is commonplace for R&D, operations, and marketing managers to take a different view of strategic problems and of proposed solutions. Depending on the depth of the differences and the flexibility of the people involved, reaching a reasonable consensus may require, for example, providing better information about the market, changing incentives to emphasize joint performance, or, at the opposite extreme, restructuring to manage with smaller and more identifiably responsible leaders and teams. Each step of action across this spectrum puts increasing demands on the organization’s ability to deliver and takes you further into the issue of whether those capabilities are in place or whether they can be developed.
There is also a catch in the process of using organizational action to address prefer- ence discrepancies. The current organization of a business is in many ways the creation of the managers you are dealing with and it reflects their preferences for how the business should be run. The execution of a new direction involves a capability on the part of the people in the organization to address and change those organizational preferences as well as the targeted strategic preferences. This is no small task. We shall return to it in our discussion of strategic change in later chapters.
Serious Conflict If managers are at such great odds with each other that there is no reasonable strategy that they can commonly endorse, you may be watching the total disintegration of an organization. The causes for the difficulties probably go far beyond the individual preferences of one manager or another. The management team may have tried in the past to paper over their differences, but the conflicts have kept re-emerging. The situation calls for a comprehensive review of the whole business and for action, as necessary, across an equally broad front.
149 M a n a g e m e n t P r e f e r e n c e s a n d C o m p e t i t i v e A n a l y s i s