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In: Business and Management

Submitted By sogiasingh
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The Power School – strategy formation as a process of negotiation
The power school ‘...characterizes strategy formation as an overt process of influence, emphasising the use of power and politics to negotiate strategies favourable to particular interests...’ (Mintzberg et al.
(1998): 234).
The power that is considered here is beyond the legitimate wielding of economic power in the marketplace (as proposed by the positioning school). ‘Macro power’ is the illegitimate or ‘alegitimate’ (i.e. not expressly legitimate, in a ‘grey area’) use of power by the organisation in relation to those outside it. The lines can be very blurred between the use of political activity that is acceptable in relating to the organisation’s stakeholders and competitors, and that which constitutes a breach of law or trust in spirit, if not in the letter.
The field of ‘business ethics’ and the notion of ‘corporate governance’ are necessary elaborations of the business policy considerations that go hand in hand with strategy formulation. Increasingly, however, organisations are finding it beneficial to co-operate and collaborate with other players, forming strategic alliances, rather than seeking to damage them with their strategies.
Micro power’ is the ‘play of politics’ inside the organisation, and although acknowledged by all writers on strategy, it has rarely been investigated in itself. The idea that there could be a struggle of competing interests in strategy formation is entirely absent from all the prescriptive schools of strategy. There is an assumption that all are united in the pursuit of organisational goals (e.g. profit-maximisation), and that self-interest is synonymous with the interests of the organisation. In real management circles this has always been recognised as an unrealistic reflection of corporate life, even discounting the obvious conflict...

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