Strategic Thinking and Planning: A Critical Analysis of System Thinking and Its Application in Business

This essay critically analyses the statement 'Systems thinking essentially seeks to understand phenomena as a whole formed by the interaction of parts' and discusses the approaches of strategic management and system thinking. The essay highlights the importance of systematic thinking and planning in achieving organizational success and differentiates between strategic planning and thinking. It also discusses the concept of complex adaptive systems and their application in strategic thinking.

Running head: STRATEGIC THINKING AND PLANNING
Strategic Thinking and Planning
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This essay is written with the purpose of analysing the statement “Systems thinking
essentially seeks to understand phenomena as a whole formed by the interaction of parts” ,
described in Stacey, (2011) critically and it will help to provide perception on the approaches
of strategic management and system thinking in such a dynamic environment of business
(Haines 2016). As the nature of industrial issues are becoming complicated day by day,
organisations are demanded to think and implement new strategies as effectively as possible.
As the scenario is changing rapidly, with the help of the reference taken from North et al.
(2013)modelling complexity will be discussed through a process called Complex Adaptive
System. It will also elaborate a practice perspective to think effective strategies. The fact
cannot be denied that the entire world is experiencing a change as countries are being
interconnected with the progress of globalisation (Bond and O'Byrne 2014). As a result of
this, a complex social system is introducing itself as well as the demand of strategic thinking
is increasing in the global field of business. Modification of policies in any nation can leave a
deep impact on others as technological advancement has made the system dependent on each
other on a large scale. For instance, United States’ decision of reducing foreign aids can be
concerned. As described in Crawford, Costa-Gomes and Iriberri(2013), the governing body
once decided to increase the flow of domestic spending and it casted an unpredictable effect
on the other nations’ strategic planning. Therefore, through a systematic process of thinking
and implementing strategies, extremely complicated and unpredictable situations canbe
handled and how the entire process is going to be effective, that will be the central topic of
discussion.
The theme of strategic thinking revolves around the proper analysis of opportunities,
probable issues and a vision towards consequences caused by decisions and actions of a
certain organisation (Brocas et al. 2014). This process is considered globally as an ongoing
phenomenon and not an event. Thinkers have a visionary approach towards both the existing

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and future issues and its solutions. Managers should not consider this as an individual
thinking style;instead, it is a perception, whichgradually grows by interacting among the
organizations and learning from the strategic areas of business operations. A detail discussion
on how to analyse strategies has been conducted in Grant(2016), it also states that every
strategy is unique in nature as it is not possible to imitate thoughts for the competitors.
Strategic management helps to introduce perspectives and approaches yet to describe the
thinking process by a certain definition can be difficult as the approaches are numerous.
According to, Vanhaverbeke and Roijakkers(2013), it will be easier to understand the entire
procedure if the characteristics of strategic thinking can be elaborated first instead of going
through definitions because none of them covers all the dimensions. Strategic thinkers,
whenever face difficult situation they try to solve that with prior perception and available
information their ability lies in deciding something effective which will be beneficial for the
organisation and at the same time creates a positive impact on other companies or nations.
However, information cannot be available entirely unless one is living an ideal world.
Therefore, they have to take decision withability of thinking pragmatically based on the
partly available information and considering a wider scenario of work. It will help them to
attain appropriate insight as far as understanding of issues and concrete action is concerned
(LEU et al.2014).
Strategic management comes with two approaches of planning and thinking.Planning
helps an organisation to deal with the unpredictable,not so pleasant situations within an
organisation and to gain the competitive advantage in the market over the rivals. On the other
hand, managers use strategic thinking to identify the effective factors, which will help to
accomplish the objectives of an organisation along with satisfying the customers. This ability
of thinking comes from a creative mind as well as deeper understanding of business
operations. The managers should have enough vision to guide a company towards success

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unless both the potential and resources will go in vain. A book entitled ‘Strategic Thinking’
written by Kenichi Ohmae says that if the fundamental issues cannot be recognised in a
proper way, both the physical and psychological pressure on the employees will not be able
to deliver the desired outcome. Strategic thinking involves recognising the field of
competition as well as understanding the opportunities before the competitors get to know
about those. In order to understand the impact of strategic thinking the instance of Amazon’s
one of the managerial decisions can be taken into account. They decided to sell books online
for the first time back in the year of 1995, as they were able to identify the fact that virtual
shopping not only reduces costs but also creates more choices for the customers. An insight
provided by Eden and Ackermann(2013), as they recognised the opportunity before any other
company did, automatically the point added up to their favour and helped them to gain
competitive advantage in the market. In the midst of such a dynamic environment of
business,these approaches create motivation and commitment for the enterprise and its
stakeholders. Therefore, it can be stated that strategic planning is necessary to execute the
prior framed strategies, which are unconventional in nature,through a pragmatic thinking
process.
Strategic thinking delivers a sense of systematic attitude. There are two central
contributions of the systematic approach to the strategic management of a certain
organisation. The system provides a guidance on which the strategic planning is going to be
applied; it determines the appropriate way and time to apply the strategy as well. Moreover, it
suggests a series of methodologies, which should be implemented as a strategic plan. Before
applying systematic methods,it is important to know the factors working behind any kind of
organisational emergency. A strategic thinker should frame a system of values and develop a
perception on the relationship between several factors influencing the business. According to
the porter’s model “strategy is a holistic and integrated attitude”, yet several different

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activities can be found regarding this matter. Systematic approach always keep the objectives
and orientation of the company in mind. The singular focus drives the organization and its
resources towards the objective. Managers should have greater vision while thinking
systematically, because strategies are framed considering the past and current issues, as well
as future opportunities. Identification of right time to implement strategies is essential
otherwise; the organization may miss the chance of getting benefit out of existing
opportunities. Discovering hidden opportunities is another task, which is necessary to adopt
strategies accordingly. Sometimes, assuming future situations and planning solutions for
probable cases, which is called hypothesizing, is considered a blend of creative thinking and
professional understanding.As described in Bond and O'Byrne(2014), the company will make
profit in future if current strategies have enough potential to accomplish the goals. Therefore,
this essay differentiates strategic planning and thinking as two different phenomenon and
planning needs to be done after a detail process of thinking. Further, two different level of
thinking can be identified; one is individual and the other is organizational. Both the levels
are interdependent while taking business decisions on the behalf of the organisation. A detail
study of Cummings and Worley(2014) suggests that, in order to understand both the
approaches clearly and by the process it works within an organisation,a framework will be
presented. There are five stages of strategic thinking, first the management has to learn the
external and internal factor, which influence the business operations. Considering the
environment the organisation has tomeasure the possibilities to be successful.Next,
according to that whatever strategies have been framed a successful implementation of
those through operationsis the next thing to do. Then, the organization’s objective to create
the ideal future will be fulfilled. Therefore, it can be said that, strategic thinking is not a
single phenomenon rather there are several phases through with the systematic approach can
be achieved. This analysis supports the theory, “Systems thinking essentially seeks to

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understand phenomena as a whole formed by the interaction of parts” as described in the
journal, (Stacey, 2011).
There are various execution methods of five phases of systems of thinking. Methods
are as follows. Comprehensive strategic planning is necessary according to the organizational
need, quick and short-term strategic planning is helpful to resolve the issues of small and
medium organizations and make the best use of market opportunities, developing a strategic
plan after understanding the areas of improvement and according to the needs of projects
entire strategic plan demands to be changed. It has been stated distinctly in the study
performed by Kopnina (2017), that,sometimes, it is essential to adopt new strategies to cope
up with the dynamic environment of business.
Along with these variations, few more types of systematic thoughts and strategies are
there. Such as, according to Grunig (2013), developing the quality of the product to provide
satisfaction among the customers, human resource should be managed with easy
communication method and developing their potential as per need to make them more
effective can be beneficial for the organization’s future.
Above all, a systematic approach in strategic thinking and implementing strategies
can increase the chances of organizational success to a greater level. A detail study of Dibrell,
Craig and Neubaum (2014) suggests that corporate business strategy focuses on the strategic
options with which multi business organisations have to deal with, to perform better and
increase competitive advantage in the market. Business firms generally concentrate on
effective strategies of launching products. Although, the strategies are objective oriented,
various factors work behind framing a proper promotional strategy via systematic thinking
and planning. A much-discussedand debated dimension regarding this sector, which is
currently coming forward that is, if the traditional methods of thinking and planning is

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effective enough if the situation is critical and complex. Business practitioners and experts
have started to think business strategies in a complexity perspective, in the background of 21st
century. It is obvious that, management has to keep the effects of globalization in mind while
implementing strategies and it has been proven that the traditional methods are unable to cope
up with the transformation of business environment. Therefore, strategies should be viewed
in a complex perspective if the purpose is to achieve organizational excellence. The business
practitioners and scholars have assumed it that, business organisations who are operating in
multiple sectors are example of complex adaptive system, which includes several modular
and loosely interlinked business units (Malviya 2017). While the structure of these kind of
organisations are consistent, considering the changing business scenario,traditional methods
of sharing information and theories in the understanding of organizational need has become
difficult. According to the statement provided by Benn, Edwards and Williams(2014), as the
speed of global environmental change in business is rapid, it has been increasingly difficult to
cope up with the changing atmosphere applying different strategies for different needs. When
the present issues are evaluated in a complexity perceptive, a vast difference can be noticed
between the implications of corporate strategies maintaining the traditional way and
following a complex one. Organizational complexity theory is in the central focus here.
Although, the search of new theories to resolve issues while implementing strategy was
necessary yet some of the existing strategic theories are still equally effective in this field.
Business organisations operating in multiple fields adopt the culture of Complex
adaptive system (CAS) to engage themselves into strategic thinking in a systematic way
(Liang et al. 2013).A reading of Khadartseva (2014) helps to grow the perception that, Proper
thinking and plan is necessary to avoid issues due to the complex structure of the organisation
and the external factors, which are changing as the time progresses. Complex adaptive system
always search for new regulations and try to avoid conventional methods in order to execute

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policies. As the application of technology has been increased as a tool of research, CAS feels
to introducenew dimensions while breaking the traditional boundaries. The concept of
complexity adaptive system is always associated with the development of the business
(Cummings and Worley 2014). Hence, thinkers use to frame the agendas while developing a
perception of a dynamic global environment. Both the natural and human world has instances
of Complex Adaptive System. Political parties, economic principals are considered under the
CAS of human world. In order to develop an understanding of the system few characteristics
of CAS need to discussed. CAS is consisted of several networks of gathering information,
learning from the feedbacks and prior experience and imposing strategies accordingly. It is
needless to say, considering the nature of Complex Adaptive System, that their future is
unpredictable (Roh, Hong and Min 2014). It exists in multiple levels within an
organisation,as one level is dependent on the other for both the positive and negative
outcome. Instructions are always unpredictable instead of pre-determined. There are various
fields where complex adaptive system has been applied. Starting from the science
communities, disciplines like economics and political science have adopted this system so
far. Multi business units are also regular practitioners of this system.
Apart from identifying complexity within a system, it is essential to measure the
intensity of a complex situation as well. Measurement is necessary for better understanding of
the complex environment and imply the strategies. Business units are interlinked with
cultural values, mutual collaboration andadvanced HR management policies. A business firm
likely to receive success when all of these factors are working together yet in the period of
organizational crisis if the structure does not collaborate with each other, it affects the
performance of the farm largely. As the units are loosely linked with each other yet
committed to deliver mutual supportthere are several scopes of innovation, which adds
competitive advantage in favour of the organisations (Johnston and Bate 2013). According to

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North et al. (2013), the complex adaptive systems are useful for business organisations like
Brugal & Cia to manage proper understanding of the concepts of systems associated with the
business functioning and furthermore determine the behaviors of the system to ensure
improved business effectiveness along with better productivity and higher revenue
generation. The complex adaptive system is considered as useful and reliable for Brugal &
Cia, the rum manufacturing company, in terms of systems thinking as well as facilitates the
strategic planning and the implementation of strategies required to accomplish the business
goals and objectives with ease and effectiveness (North et al. 2013). The adaptive system has
assisted in defining new ways of thinking about strategies and even maintained transition
across phases to manage effective behaviours too. Based on the statement provided by Levin
et al. (2013), there are various benefits associated with the complexity adaptive system and
one such advantage could be the optimization, which has eased down the business operations
at Matasha, the tobacco company too. It allow the employees of the business organizations to
think strategically and understand the system dynamics by integrating the various
components of the system with the business operations (Levin et al. 2013). This will create
better scopes for resolving the issues and complexities much more easily, furthermore enable
innovation and creativity for the development of own self, the organization and its employees
too.
One such example is that the adaptive system implemented at Coles, the retail chain
supermarket, has facilitated the general management orientation and allowed the business
practitioners to formulate new theories, ideas and concepts required to implement successful
organizational change all throughout. The adaptive system can be useful during the mergers
or acquisitions’ situations, where systems thinking, learning and adaptation are necessary for
maintaining a flavour of uniformity. As stated by Arrow et al. (2013), it will not only
strengthen the design principles, but will also consider the core values and beliefs required

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for implementing strategies effectively. It could create more value for the organization and
allow the companies to think strategically about being socially responsible too (Arrow et al.
2013). The power of innovation and creativity has been unlocked, which has increased the
potential to handle complex situations with convenience and ensured formation of dynamic
and systematic thinking as a whole. The complex adaptive system, as the name suggests,
deals with the modelling complexities and has high level of adaptive capability, which
ensures providing flexibility during the complex situations. Highsmith (2013) stated that the
model is considered as effective because of its extensive feature of simplifying the modelling
process and fosters the development of successful communication among the employees of
Coles too. This would also enhance the skills and knowledge of employees to handle crises
and improve the company’s flexibility to adapt to changing situations while improving the
non-linear interactions at the similar end too (Highsmith 2013). Therefore, it is clearly
understandable that the complex dynamic adaptive system can benefit the organizations by
making it remain competitive in the marketplace. With the use of this model, the gaps in
business functions and certain areas of weaknesses experienced at Tesco are also identified,
which can be managed through the adopting of good leadership. The management of
leadership skills will be facilitated with the complex adaptive system implementation and
shall make the organization respond to changes by bringing out the best potential of the
employees and enhancing the organizational effectiveness too (Fradkov, Miroshnikand
Nikiforov 2013).
The strategy from perspective of practitioner of Tesco enables managing various
policies and principles to conduct researches and detailed analytical study to assess the
external and internal environmental factors associated with the business functioning.
According to Fradkov, Miroshnikand Nikiforov (2013), the strategy as practice perspective is
influenced at Brugal & Cia with the involvement of various strategists who have dedicated

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themselves fully to the company by managing the workforce efficiently. The practice
perspective has helped in managing persuasion, diversity at workplace and even allowed the
companies to adapt to a new culture and changing environment (Whittington 2014). This also
has strengthened the relationship between business and its customers and improved the
strategic management planning to implement new ideas for business success and flourishing.
Whittington (2014) stated that the strategy in practice is mostly important for gaining
competitive advantage through gaining detailed knowledge about the micro and macro
environmental factors. By assessing these factors, the companies like Coles and Tesco will be
able to develop and implement strategies that can be vital for meeting up to the expectations
of clients in the different market segments, furthermore ensure higher level of customers’
satisfaction and increase in sales revenue too (Brownand Thompson 2013).
Thus, the strategy as practice means proper strategic planning and management. By
placing the strategies and ideas behind those into practice could enable renovation f the
organizational structure and create a good culture too. Based on Brownand Thompson (2013),
this would not only make the organizations adapt to changes within the organization, but
could even improve the implementation of strategy as practice in the micro, meso and macro
level functions conveniently. At the micro level, the managers of business organisations like
Coles implement strategies to ensure that the legal rules and codes of conduct are followed by
the employees while at the meso level, their skills and knowledge facilitate coordination
among employees as well as creates connection between the business functions and systems
thinking (North et al. 2013). This should be essential for handling the complex situations and
accumulate vast amount of knowledge and skills required to implement effective strategies
and undertake collective action as well.

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Therefore, as a conclusion, it can be stated that to attain the purpose of maintaining
performance and to gain opportunities strategic planning and systematic thinking are essential
part of managing a business organisation. Practice of CAS enables the companies to deal with
crises as well as help to maintain complexity within the company. As far as the statement as
described in the written account of Stacey is concerned, it can be concluded saying that
systematic process of thinking consists of various parts which are interrelated and the whole
phenomenon cannot be performed distinctly if one of these partsfails to accomplish its
purpose.

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