Understanding the distinction between planned and emergent strategies is essential for evaluating how businesses adapt, innovate, and thrive in competitive environments.
Planned Strategy
A planned strategy is a deliberately formulated plan of action that outlines how an organisation will achieve its long-term objectives. It is often created through a formal strategic planning process led by senior management and involves analysing the current business environment, setting goals, and determining the steps necessary to reach those goals. Planned strategies are documented, structured, and implemented over a fixed period, usually with measurable milestones and performance indicators.
This approach assumes that the external environment can be understood well enough to make reliable predictions. It focuses on identifying the optimal course of action in advance and then executing it precisely, making use of management tools like SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), PESTLE analysis (Political, Economic, Social, Technological, Legal, Environmental), and Porter’s Five Forces.
Characteristics of Planned Strategy
Goal-Oriented: Strategic objectives are clearly defined, often aligning with the company's mission and vision.
Top-Down Structure: Strategy is developed by senior executives and communicated down through organisational levels.
Predefined Timelines: Strategies typically include scheduled goals over months or years.
Resource-Based: Planned strategies consider how to best utilise available resources to achieve objectives.
Formal Documentation: Strategic plans are often recorded in strategy reports, policy documents, or action plans.
Advantages of Planned Strategy
Provides Clear Direction: Employees and managers are aligned with the organisation’s long-term purpose, reducing uncertainty and ambiguity.
Improves Coordination: With well-defined goals, different departments can synchronise their activities effectively.
Facilitates Control and Accountability: Progress can be tracked using performance indicators such as Return on Capital Employed (ROCE), market share, or revenue growth.
Enhances Stakeholder Confidence: Shareholders and investors often prefer a company with a visible and deliberate strategy.
Supports Investment Decisions: Long-term strategies justify major capital investments by aligning them with corporate priorities.
Disadvantages of Planned Strategy
Inflexibility: Once a strategy is set, it may be difficult to adjust to sudden market shifts or new opportunities.
Over-Reliance on Forecasting: Assumes that future events can be predicted accurately, which is often not the case.
Slow Reaction Times: Planned strategies require time-consuming analysis and approvals to change direction.
Risk of Obsolescence: In fast-moving industries, the environment may change faster than the strategy can be updated.
Top-Down Disconnect: Employees further down the organisational structure may feel disengaged if they are not involved in the strategy development.
Emergent Strategy
An emergent strategy is one that develops over time as organisations react to unforeseen changes in the external or internal environment. Rather than being designed in advance, this type of strategy is based on real-world experiences, feedback, experimentation, and adaptation. It is not the product of a formal planning process but rather the result of countless decisions made at all levels of the organisation.
This strategy becomes visible only after a pattern of actions has formed. Emergent strategies are especially common in small or innovative businesses where flexibility and responsiveness are more valuable than predictability.
Characteristics of Emergent Strategy
Unstructured and Adaptive: Strategies are formed organically through ongoing actions rather than rigid plans.
Bottom-Up Input: Often driven by insights from operational employees who observe changes in real time.
Responsive to Feedback: Decisions are adjusted based on customer reactions, market data, or performance outcomes.
Fluid and Evolving: Strategies are continually updated, rather than fixed for long durations.
Experimentation-Based: Encourages trial-and-error and learning through doing.
Advantages of Emergent Strategy
High Adaptability: Can adjust to unpredictable events such as new competitors, regulation changes, or consumer trends.
Promotes Innovation: Allows businesses to explore new ideas without waiting for senior approval.
Reduces Risk of Strategic Misfit: Keeps the organisation aligned with its current environment rather than its historical assumptions.
Encourages Employee Engagement: Involving employees in strategic evolution empowers them and taps into diverse insights.
Improves Customer Responsiveness: By adjusting quickly to customer needs, firms can maintain high satisfaction and loyalty.
Disadvantages of Emergent Strategy
Lack of Strategic Clarity: Without a shared plan, departments may pursue conflicting or inconsistent objectives.
Difficult to Measure Success: Without predefined benchmarks, evaluating performance becomes more subjective.
Risk of Fragmentation: If multiple initiatives are pursued simultaneously, it can stretch resources too thin.
Possibility of Strategic Drift: The company may slowly move away from its core competencies or values without realising it.
Leadership Challenges: Senior leaders may struggle to maintain control or cohesion across diverse teams.
Comparing Planned and Emergent Strategies
Understanding the differences between the two approaches is crucial in choosing the right one for a business or combining elements of both.
Planned strategy is deliberate, developed in advance, and relies on environmental predictability.
Emergent strategy is adaptive, evolving through real-time learning, and embraces uncertainty.
The key is recognising that both have value depending on the context. For example, in sectors where regulation and capital investments dominate (like pharmaceuticals or aerospace), planned strategies are essential. In contrast, for sectors like software, retail fashion, or digital media, emergent strategies may prove more effective.
Strategic Fit in Different Environments
Tech Startups and Dynamic Markets
In fast-changing industries, such as technology and digital startups, emergent strategy tends to be more effective.
Example: Slack
Initially created as an internal communication tool by a gaming company.
Feedback from internal users led to the realisation that the tool had potential as a standalone product.
The company pivoted away from gaming and refocused entirely on developing Slack as a workplace communication platform.
Why Emergent Strategy Worked:
The technology market evolves quickly, with new tools and competitors emerging frequently.
Being responsive to internal data and customer use allowed the company to adapt successfully.
There was no time for a traditional top-down strategy to be developed and executed.
Other examples:
Twitter emerged from a failed podcasting company.
Instagram pivoted from a location-based check-in app called Burbn.
In each of these cases, success came not from sticking to the original plan but from reacting to user behaviour and market opportunities.
Traditional Industries and Predictable Markets
In contrast, manufacturing, logistics, and construction firms often benefit more from planned strategies.
Example: Toyota
Uses long-term planning for production levels, procurement, and process innovation.
Implements the Toyota Production System (TPS), a carefully structured method for achieving operational efficiency.
TPS is based on predictable customer demand, employee routines, and stable supply chains.
Why Planned Strategy Works:
Demand is more stable, allowing forecasts to be more reliable.
Long-term supplier contracts and factory operations benefit from consistent planning.
Regulatory compliance and safety protocols demand structured procedures.
In such contexts, the rigidity of planned strategy is a strength, not a limitation. Deviations can lead to serious cost overruns, product defects, or safety violations.
Hybrid Strategies: Combining Planning and Emergence
In reality, many businesses operate with a hybrid strategy that combines the strengths of both planned and emergent approaches. This allows a company to maintain structure and control while remaining open to unexpected opportunities.
Example: Google
Plans major strategic areas such as cloud computing, advertising, and artificial intelligence.
At the same time, allows teams 20% of their work time for personal innovation projects.
Products like Gmail, AdSense, and Google News originated from these emergent efforts.
Benefits of a Hybrid Approach:
Strategic Anchoring: Keeps the business focused on key priorities while exploring new directions.
Encourages Organisational Learning: Lessons from emergent initiatives feed back into long-term strategy.
Balances Risk and Reward: Planned investment ensures stability, while emergent projects drive innovation.
Improves Talent Retention: Employees value autonomy and purpose, both of which are fostered through emergent thinking.
Challenges of Hybrid Strategy:
Maintaining Coherence: Without clear communication, different units might interpret strategic goals differently.
Conflicting Metrics: Measuring planned success with KPIs can clash with emergent projects that are still evolving.
Resource Allocation Conflicts: Teams may compete for funding or leadership attention, disrupting harmony.
To overcome these challenges, leadership must:
Establish a clear strategic vision.
Encourage feedback loops from bottom-up initiatives.
Ensure regular review and integration of emergent ideas into formal planning.
Strategic Decision-Making in Different Contexts
Choosing between planned and emergent strategies is not binary. The appropriate choice depends on factors such as:
Industry dynamics: High-change industries benefit more from emergence; stable industries lean towards planning.
Size of the organisation: Larger organisations often require structure to maintain coordination.
Market position: Market leaders might prefer planning; challengers and disruptors may choose emergence.
Culture and leadership style: Hierarchical organisations favour planning, while collaborative cultures encourage emergence.
Understanding when and how to shift between these approaches can be a major source of competitive advantage. Businesses that are too rigid may become obsolete, while those too chaotic may fail to capitalise on growth opportunities.
FAQ
A business can identify its strategic approach by evaluating how decisions are made and implemented. If strategies are developed through structured planning meetings, with defined long-term objectives, timelines, and documentation, the business is likely following a planned strategy. In contrast, if strategic direction changes frequently based on market feedback, employee input, or customer trends without formal plans, it suggests an emergent approach. Analysing internal communication, resource allocation, and leadership style can also provide clues about the strategy in use.
Organisational culture is critical to emergent strategy because it influences how employees react to change and whether they feel empowered to innovate. A culture that values experimentation, open communication, and learning from failure supports the development of emergent strategies. In such environments, employees are more likely to share insights and initiate change without waiting for formal directives. On the other hand, a risk-averse or highly hierarchical culture may suppress the organic development of new ideas, limiting the effectiveness of an emergent strategy.
Yes, a planned strategy can evolve into an emergent one if the business begins to deviate from its original plan due to changes in the external environment or internal learning. For instance, if customer behaviour changes unexpectedly or a competitor introduces disruptive technology, the original plan may become less relevant. In response, managers may start making adaptive decisions based on new information, gradually shifting the business towards an emergent approach. This transition is often unintentional but necessary for maintaining competitiveness in a changing market.
Leadership style plays a key role in determining which strategic approach is more likely to succeed. Authoritarian or directive leaders typically favour planned strategies, as they prefer control, predictability, and formal processes. In contrast, transformational or democratic leaders are better suited to emergent strategies, as they encourage collaboration, empower employees, and adapt to feedback. The leader’s ability to communicate vision, support innovation, and respond to uncertainty often dictates how effectively a business can execute either approach.
Emergent strategies can be suitable for large multinational corporations, but they require careful coordination. While these businesses often use planned strategies to manage global operations, they can also encourage emergent behaviour at the local or departmental level. For example, regional teams may adapt marketing campaigns or customer service practices based on local preferences. Successful implementation of emergent strategy in such firms depends on decentralised decision-making, strong internal communication, and a corporate culture that supports flexibility while maintaining overall strategic coherence.
Practice Questions
Explain two benefits to a business of adopting an emergent strategy. (6 marks)
One benefit of adopting an emergent strategy is that it allows a business to respond quickly to changes in the external environment, such as new technologies or shifts in consumer behaviour. This adaptability can provide a competitive advantage. A second benefit is that emergent strategies often encourage innovation from within the organisation. Employees at all levels can contribute ideas based on real-time feedback, which can lead to the development of successful new products or services. Both benefits help businesses remain relevant and competitive, especially in dynamic markets where planned strategies may be too rigid or slow to adjust.
Analyse the impact of using a planned strategy on a business operating in a stable market. (9 marks)
Using a planned strategy in a stable market enables a business to allocate resources efficiently and follow a clear direction. With limited environmental changes, long-term forecasts are more accurate, supporting structured decision-making. This can enhance productivity, reduce uncertainty, and improve stakeholder confidence. For example, a manufacturing firm with predictable demand can plan operations and supply chains in advance, reducing costs and delays. However, if the market does shift unexpectedly, the business may struggle to react due to the inflexible nature of a planned strategy. Therefore, while effective in stable markets, a degree of flexibility should still be maintained.
