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SECTION 8 STRATEGIC MANAGEMENT

Studying Section 8 should take you about 18 hours. Section 8 mainly addresses the question of how individuals and organizations improve and become more effective (key question 3). After studying this section you should: have gained a better understanding of approaches to strategic and development planning and to marketing; be able to assess your own practice and that of your organization in the tasks of marketing, managing projects and planning for future developments; appreciate how you and your organization could relate more effectively to a changing, uncertain and ambiguous environment.

All the readings for this section are in Reader 4, Part 3.

8.1

INTRODUCTION
themes of this section are: organizations and their environments; strategic planning and management; organizational development planning; marketing.

The key

The overarching concept that we have chosen to describe this cluster of themes is strategic management. In Section 1 of the Study Guide strategic management was categorized as a management task. (You might like to look back at Section 1 to remind yourself about how strategic management fits in to our analysis of educational management; see in particular Figure 1 and Table 1.) This is true, but it is also more than that: 'strategic management is centrally concerned with synthesizing and integrating the main "functional" areas of management ... into a decision process which addresses the future direction of the organization as a whole ... Reference is sometimes made to a "helicopter" view - seeing the wood and the trees at the same time' (The Open University, 1995, p. 116). As part of this synthesizing, integrating purpose, strategic management is especially concerned with managing the relationship between the organization and its external environment - broadly what is described as 'context' in Figure 1 (Section 1). This section will look at how educational managers might work with people and use ideas to achieve the 'task' of strategic management within a particular context (see Figure 2 of Section 1). As the first reading will show, the term 'within a particular context' should not be understood in a determinist sense but needs to include the possibility of changing the context, difficult though this may often be. In what follows you will clear links with other sections of the Study Guide. Strategic management is intended to secure change for organizational improvement, so the ideas considered in Section 7 are especially relevant. This section also has close links with Section 4 on educational leadership, Section 6 on organizational effectiveness and Section 10 on financial and resource management.

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ENVIRONMENTAL
The first reading discusses some of the key concepts that can be used to analyse the relationship between an educational organization, its head and the external environment, such as boundaries, boundary spanning, permeability, dependence/ independence, network centrality, legitimacy and buffering, and it looks at a number of approaches to managing the environment. It does not deal directly with the concept of 'environment' because of insufficient space: the US author, Ellen Goldring, adapted this chapter for our reader from a much longer article (Goldring, 1995) in which she does explore this concept. For example, she draws a distinction between 'specific' environments, 'comprising those elements that have immediate, direct relevance for the organization and therefore interact continuously with it' (Goldring, 1995, p. 287), such as parents in the case of schools, and 'general' ones, which the organization does not deal with every day but of which it needs to be aware because of their potential relevance, such as the media. As she says, the concept of an organization's environment is 'broad and complex' and managers need to develop an 'environmental map' (p. 287). Evans (1995, Chapter 2) has a useful approach to this based on a marketing perspective, and the later readings in this section by Bagley et and discuss others. Although the focus of the chapter is on schools, the concepts are relevant to all educational organizations. You may feel, particularly if you work in a post-school establishment, that too much emphasis is given to the formal head when there are often many other 'boundary spanners'. As was argued in Section 4, leadership in organizations is not confined to those holding senior positions.

Reading 1 Please read Chapter 24 by Goldring in Reader 4. You may find the reading difficult because of its level of abstraction but it will repay careful study. As you read, make notes on: the link drawn between successful environmental management and internal power and legitimacy (recall the discussion of the latter concepts in Section 3); the key role of interpretation: understanding the environment is a largely subjective process and organizational members 'invent' their environments; the issues raised about the nature of effective leadership (one of our key questions) and in particular the argument that effective leadership requires an active, not a reactive, approach to dealing with the environment.

Unless you are a chess enthusiast, you may have found the reference in the final paragraph to positioning and strategizing in terms of the moves in a game of chess and the principal/strategist as a chess master somewhat chilling: educational leadership is not easily viewed in this way. Readings 2 to 5 look at different aspects of strategic planning and management; when you have studied them you will be able to judge how apt this analogy is.

8.3 DIFFERENT EXPLANATIONS OF STRATEGY DEVELOPMENT

Ideas of strategic planning and management have been common in industry and commerce for several decades but they have only recently been related to educational organizations. This has been due in large part to the growth in schools' and colleges' decision-making powers and the increased interorganizational competition and 'consumer' choice promoted by government policies.

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In the years that corporate strategy has been studied and practised in the business world, a major debate has developed about the relative roles of 'rationalism' and 'intuition' in promoting successful strategies. (As you will by now be aware, this debate about rational and intuitive thinking, first raised here by Bennett in Reader 1, Chapter 5, is relevant to most of the topics covered in the course.) Successful businesses have by no means always depended on highly detailed business plans. In fact, as John Kay, an influential contemporary writer on the subject, points out, there has been growing with such an approach: 'Elaborately quantified corporate plans lay gathering dust on the shelves of managers who went on making the decisions they would have made had the plan never existed' (Kay, 1993, p. 341). Because of this dissatisfaction, the familiar idea that 'successful strategies are often opportunistic and adaptive, rather than calculated and planned' (p. 356) has recovered ground and 'rationalism is in retreat, but by no means routed' (p. 354). Does this mean the analytic model should be rejected altogether, and, if so, what should replace it? Reliance on intuition alone is hardly adequate: 'Intuitive responses and judgements are not always right, and whether they are right or wrong they are always the product of some implicit model' (p. 344).

Reading 2 You should now read Chapter 16 by Bailey and Johnson in Reader 4. This reading identifies and describes six different explanations of how strategies develop in organizations. Thus it goes far beyond a simple dichotomy between rationalism and intuition to indicate a range of distinct approaches derived from the literature on strategic planning and management. Although the six are described in general terms and are not related to any particular type of organization (the research to which the accounts were later applied was conducted mainly in business firms), their relevance for educational organizations seems very apparent. will ask you to make use of Bailey and Johnson's six perspectives when you study Reading 3.

You will have noted Bailey and Johnson's statement that the different views of how strategies develop should not be taken as mutually exclusive and that in practice there is generally a combination of processes. Kay warns against creating an 'artificial polarization' between rational and incremental approaches, and suggests we think about mixed models such as 'guided adaptation and managed incrementalism' (Kay, 1993, p. 358).

8.4

APPLYING THE CONCEPTS

You should now expect a fairly sharp change of focus as we move from conceptual analysis to application. The next three readings look in different ways at how the ideas of strategic planning and management may be applied to educational organizations. One issue raised in Reading 3 is the distinction between strategic planning and organizational development planning. The latter term has been familiar in education over a longer period. This issue will reappear in Reading 4, and I will consider it when you have studied Reading 5, which focuses explicitly on school development planning. For the moment, you should simply note the distinctions made in Readings 3 and 4, consider whether the authors agree about the differences between the two ideas and formulate your own view of these.

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Reading 3 Now read Chapter 19 by Weindling in Reader 4. The author: considers the origins and development of these ideas in non-educational settings; discusses how they may be adapted for education; presents a model of what he calls the 'strategic planning process'; and offers a range of practical techniques which, although he relates them to schools, are equally appropriate for other kinds of educational organization.

As you read, try to identify the different perspectives that were described in Reading 2. Which of Bailey and Johnson's six perspectives does Weindling's model of the strategic planning process approximate to most closely?

The planning perspective seems closest to the approach that refers to as 'long-range planning', with its highly sequential and formalized style, but the description of 'strategic planning' in Figure is also quite formal and analytic in its approach, although looser than long-range planning in its references to dynamic organizations and shifting environmental factors: to this extent it moves towards the logical incrementalist approach. The latter is more clearly seen in the discussion of vision later in the reading and the emphasis on evolutionary planning processes in that section, which also, of course, closely reflects the visionary perspective: the values audit is also relevant to this. The political perspective is most evident in the discussion of stakeholders and stakeholder analysis. The cultural perspective does not appear to be explicitly addressed in this reading, but in another presentation of the model has drawn attention to the importance of this dimension: make your school more effective requires that you first gain an understanding of the culture and then work to build and reshape the hidden and taken-for-granted rules that govern day-to-day behaviour. The model of strategic planning ... is one way of achieving cultural change' (The Open University, 1993b, p. 18). The natural selection perspective is not really reflected in the reading because Weindling considers that some of the techniques related to this, such as competitor analysis, are less relevant to the public sector. However, the impact of competition is now a very significant factor for many educational organizations. The application of such techniques to an educational setting has been discussed and illustrated by Weeks (1994). With regard to the second of the points I asked you to consider in the activity, my own view, as the above comments imply, is that the model Weindling puts forward, while a mixed one, is nevertheless more 'deliberate' than 'emergent' (Mintzberg, 1994) and is therefore essentially a combination of the planning and logical incrementalist approaches.

8.5

THE PLANNING PERSPECTIVE: AN ILLUSTRATION

Reading 4 Please read now Chapter 17 by the National Audit Office (NAO) in Reader 4. This presents a fairly detailed illustration of Bailey and Johnson's planning perspective. As you read it, make notes on: how the authors distinguish between strategic planning and school development planning (see the comments made on this when introduced Reading 3);

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the large 'menu' of 'main themes' they see as being included in a good strategic plan in the section headed 'Content of the strategic plan' and the similarly large number of stages they propose under the heading The planning process'; their rigorous approach to the linkage between strategic planning and budget-setting, which they have found to be a weak part of the process in many schools.

The approach advocated by the NAO is clearly to the criticisms that have been made of rationalism and the planning perspective, for example its neglect of behavioural aspects of organizations and the limited capacity of human beings to absorb and manipulate large quantities of information simultaneously. However, it also seems to me to illustrate the strengths of the approach, and to indicate why, in Kay's words which I quoted earlier, rationalism may be in retreat but is far from routed. Indeed, in the education sector growing requirements for accountability have recently forced organizations to learn about and develop such approaches (ironically at the very time when their limitations have become increasingly apparent to many outside education). The great virtue of the approach is its ability to systematize the extremely complex tasks of deciding where the organization might go and how it might get there. The checklists that it tends to generate (such as those in Reading 4), while they can sometimes seem dehumanizing, can also provide invaluable organizing tools. Bailey and Johnson's conclusion on the planning perspective in Reading 2 seems to me well put and very relevant to this reading: of the problems, the discipline and techniques of planning approaches can be useful because they may provide a framework for strategic thinking; and if managers also address the problems of managing strategy within the social, cultural and political worlds of organizations, then such thinking can be very helpful.'

8.6

STRATEGY AND MANAGEMENT STYLE

We focus next on some areas that rationalist approaches tend to neglect, notably management style and organizational culture and ethos, or as Drodge and Cooper in the next reading put it, 'the way in which the process is enacted'. In the British further education sector in recent years, colleges have had to undertake strategic planning by conforming to an explicit framework laid down by a central agency. Thus the coverage of the plan (what Drodge and Cooper call 'the mechanics of planning') can vary little between colleges. The emphasis then shifts from the details of what is included in the process (the concern of Reading 4) to how it is carried out, which is what Reading 5 is about.

Reading 5 You should now read Chapter 18 by Drodge and Cooper in Reader 4, which is based on a study of the implementation of strategic planning in three contrasting colleges. Certain explanations are put forward for the different character of the process in the three colleges. As you read, reflect on what alternative or additional explanations might be plausible.

Drodge and Cooper's main explanation is in terms of leadership and management style. In essence, in one of the colleges senior management was seen as operating a directive approach to strategic development, while in the others - and especially in one of them - more emphasis was put on devolution and staff participation, on releasing creativity and fostering organizational learning through the process, and in this way spreading ownership. Distinctive styles were perceived to operate at the three colleges, to which the authors attach

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the labels humanist, and managerialist. You may have recognized one of these labels, and the description attached to it by the authors, as applying to strategy development in the organization in which you work. However, factors other than management style, of a more 'situational' kind, may also be in play, as Drodge and Cooper recognize in their concluding section, when they refer to the different contextual circumstances of the three colleges and their different stages in the 'organizational lifecycle'. The type of strategic management practised in an organization at a particular time is related to the nature of its external environment as well as to its internal characteristics. This is by no means to dismiss the significance of leadership style, simply to emphasize the importance of the conditions in which it is exercised.

8.7

ORGANIZATIONAL DEVELOPMENT PLANNING

Development planning has been introduced in education to serve a variety of purposes. In the school sector, as Weindling indicated in Reading 3, a particularly important objective was to enable schools to reconcile and integrate the many different innovations they were being asked to assimilate - that is, it was seen as a means of coping with (and hopefully avoiding) innovation overload. Weindling's distinction between strategic and development planning is not clearcut. He says that the development plan should summarize the outcomes of the strategic planning process and should lead to the production of detailed action plans for each of the priorities established. The strategic and development plans are thus closely related, if not identical. In Reading 4 the NAO seems to imply that the school development plan is concerned with separate plans for specific areas, such as the curriculum and staff development, whereas strategic planning is holistic, bringing all aspects of a school's activities together in a single document, to secure a co-ordinated approach. However, this distinction seems hard to sustain as most development plans have sought to achieve such integration, though often perhaps without the close link to budgeting recommended by the NAO. Fidler (1996) has examined the two terms in relation to school improvement and argues that strategic planning and management differs from development planning (which he says has a similar cycle) in two important respects. First, strategic planning incorporates the results of 'environmental scanning' of influences outside the school which may affect its future. This concept has already been touched on in Readings 1 and 3, and is more fully considered in Reading 8, which we consider shortly. The second is the creative and proactive process of 'visioning' the future, which was discussed by Weindling in Reading 3, to complement the analysis of the present position. Fidler believes that these more forward- and outward-looking processes tend to be seen as specifically 'strategic'. In my view it is not helpful to think of strategic and development planning as distinct and separate processes. Development planning might be considered as the short-term operationalization or working out (leading to detailed action plans) of a strategic approach, which embraces environmental scanning and visioning activities. The whole process should be flexible and 'evolutionary' to take account of frequently shifting external and internal circumstances, and should retain scope for opportunistic and adaptive responses. There has been limited research on the application of strategic and development planning in educational organizations. Drodge and Cooper's study looked at further education colleges: the next reading looks at development planning in primary schools.

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Reading 6 You should now read Chapter 20 by MacGilchrist et al. in Reader 4, which examines the impact of development planning in nine primary schools. Interviews and observations were carried out in the schools over two years. In the book from which the reading is drawn (MacGilchrist ef al., 1995), the authors state that they believe their conclusions can be applied to the generality of schools, although they also draw attention to methodological shortcomings in their research, for example the fact that the nine schools were not randomly chosen but were nominated for inclusion on the grounds of their known interest and activity in development planning. As you read, make notes on: the four distinct types of plan that were identified in the research; the importance of an integrated approach to planning, and especially of the link with financial resources and the professional development programme; the need for both the plan itself and the evaluation process to focus centrally on the quality of teaching and learning in the classroom; what the authors call 'the multipurpose nature of development planning' that is, its role as both a vehicle for organizational improvement and a means of promoting accountability, and the possible tensions arising from this.

Activity 1 On the basis of your experience and your study of Readings 3 to 6, draw up a list of the key features of effective strategic development planning. Are all these features present in practice at your own establishment? What improvements are needed, and how might they be introduced?

8.8

MARKETING IN THEORY AND PRACTICE

In strategic thinking, organizations take a proactive approach to their environments. A key element of this is marketing. The idea of marketing is still controversial in education. To many teachers and educational managers it seems to equate providing education with selling commodities such as cars or soap powder. Marketing people reply that, while education is very different from manufacturing industry, it has many features in common with the ever more significant service sector of society, and could usefully draw on experience in the marketing of services to become more responsive to the wishes of 'customers' such as students, parents and employers. Deciding on the appropriate limits of marketing is a much discussed issue in education. Professional codes of conduct have been drawn up to try to ensure that an ethical approach is taken at all times and that 'dog-eat-dog' competition between colleges and schools as well as among schools is avoided (Secondary Heads Association, n.d). The two readings on this theme both look at aspects of the theory of marketing and relate them to actual practice in educational establishments.

Reading 7 Read Chapter 23 by James and Phillips in Reader 4. This article is unusually comprehensive in that it both discusses a range of key concepts in marketing and provides an assessment of their impact on a group of eleven widely contrasting schools. Through their conceptual discussion the authors offer a useful guide to the literature. You should therefore read the article carefully even if you do not work in a school setting.

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It is worth noting how the article is structured. After presenting the background, the authors identify the seven elements of the so-called 'marketing mix' model for services, explain the purpose and methods of their study and give an overview of the results. They then discuss each of the elements in turn, first in relation to the basic idea and the relevant literature and then by reporting on their empirical findings before moving on to the next one, and finally into a concluding discussion.

The authors' overall conclusion is that none of the schools studied had adopted coherent marketing approach as recommended in the literature - not even the private schools, which might be thought to have a particularly strong incentive to do so. They consider some of the possible reasons for this, including the wide range of imposed changes to which many of the schools were having to react and the distinctiveness of the educational relationship, which, they argue, makes educational marketing an especially complex and sophisticated activity. Another factor may be the relatively rationalistic approach taken in much of the marketing literature that the authors summarize. All the schools are said to be 'active in the various elements of the marketing mix albeit in an inconsistent and intuitive way', but in nothing like the systematic, comprehensive sense that the conventional theory of marketing would require. This issue of systematic versus intuitive approaches, which I discussed earlier in relation to strategic management, will arise again with respect to marketing in Reading 8.

Activity 2 would like you now to consider: how marketing is practised in each of the seven 'marketing mix' elements in your own organization or one known to you; how this practice compares with the findings of James and Phillips' research; and how in your view the marketing practice you identified might be improved.

Scanning the market

Reading 8 Now read Chapter 22 by et in Reader 4. This is based on a major research project investigating the impact of choice and competition on schools and families the Parental and School Choice Interaction study, which was conducted at The Open University. The reading looks at how schools in three case study areas in different parts of England sought to understand what parents were expecting, in order to help them frame their strategic responses. You have already encountered two key ideas underlying this reading; an organization's environment is not so much an objective reality 'out there' as something that is perceived and interpreted in particular ways by members of the organization (see also Reading 1); the distinction between relatively systematic and more intuitive and casual approaches to information gathering and strategy development (see in particular Readings 2 and 7).

The chapter gives a number of examples of both systematic and casual approaches to obtaining information about the 'market' and then considers both the advantages and disadvantages of relying heavily, as the school managers in the study generally appeared to do, on 'soft', informal approaches. Make notes on your own view of this debate.

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This discussion is related to the issue of equity. It seems possible that more sophisticated, analytic approaches might be better able to help schools and colleges scan and interpret the preferences of all their potential 'customers', not just those from already-advantaged families whose views are likely to come across more sharply when informal methods are relied upon. The conclusion is, however, that responsiveness is not simply a matter of technique, and that wider social and contextual factors may determine whether or not an organization adopts a policy of strong 'market segmentation'. The values of managers and the organizational culture will also affect such a strategic decision: note, in this connection, the distinction proposed in the penultimate paragraph between exclusive, market-driven approaches to environmental scanning and inclusive, community-orientated ones. How far does this distinction match your experience?

The evidence presented in the reading reinforces the authors' conclusion that many schools have a limited conception of marketing, equating it with the promotional activities of informing and persuading rather than the more comprehensive idea put forward by marketing specialists which also embraces listening and responding (The Open University, 1993c). The schools in the study were often more interested in finding out what competing schools were doing than in establishing the preferences of users or potential users directly, and where they did adopt a broader approach the focus was sometimes restricted to a particular 'segment' of the market. Practice in your own setting may not, of course, accord with these conclusions: the reading gives examples of more extensive exercises, and such activities are almost certainly becoming more widespread as competition intensifies (see Deards, 1996, for an example from further education).

8.9 STRATEGIC MANAGEMENT AT THE INDIVIDUAL AND GROUP LEVELS

The final reading in this section may at first sight seem to have little relevance to the topics we have considered so far. It certainly involves a large change in focus, but if you think back to Section 1 of the Study Guide you should see the connection. In the discussion there about levels of operation (you as an individual, within a team of colleagues and within the organization), it was said that consideration of strategy in Reader 4 would mostly be concerned with the organization and its context. However, the issues of strategic management we have addressed are relevant at other levels too, and Reading 9 is concerned with such issues at the individual and group levels.

Reading 9 Read Chapter 21 by Young in Reader 4, which analyses and gives much practical advice on the leadership of projects or 'special tasks' that are outside normal day activities. Such projects are established when there is perceived to be a particular problem or issue that cannot easily be dealt with through the more permanent structure - of departments or committees, say. As you read, identify ideas that, despite the focus on the individual and group levels, are related to concepts and issues that have been considered earlier in this section. (I will comment on this after you have carried out Activity 3.)

Every type of organization will make provision for such special projects or tasks from time to time, and the reading does not focus on educational organizations specifically, though its relevance to these is clear. One example might be a group set up to investigate and report on how to improve marketing across a college or school. The following activity asks you to consider what project or 'special task' groups you have been involved in, and whether you have ever led such a group.

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Activity 3 After completing Reading assess your own experience of project team work (if any) against the factors that Young suggests make for success or failure. Relate this activity to the work you did on teams in general in Section 5.

Ideas in Reading 9 that seem to me to be relevant to others discussed in this section include the following: The distinction between 'hard' and 'soft' projects has much in common with earlier discussions about rationalistic and more intuitive approaches, and particularly with Bailey and Johnson's distinction between the 'planning' and 'logical incrementalist' perspectives on strategy development. The discussion of stakeholders mirrors much of what had to say on this topic, but, since the focus here is on an internal group rather than on the organization as a whole, a distinction is made between internal and external stakeholders. The model of 'The objective-centred project leader' (Reading 9, Figure 21.1), embracing the leader, the tasks, the team and the stakeholders, as well as the ideas of 'inner' and 'outer' directedness and the need to maintain a balance between these, are relevant to Goldring's discussion of organizational leadership, boundary spanning and the external environment.

8.10

CONCLUSION

I hope that the final reading and activity have demonstrated that the ideas examined in this section - such as strategic thinking, marketing, stakeholders, boundaries and environment - are much more widely applicable than is often assumed. Their relevance is not restricted to the level of the whole school or college, nor to the work of the most senior managers in them. The tasks and challenges of leadership and management may differ in magnitude at different levels of the organization, but they are often similar in kind.