What Is the Prescriptive Approach to Strategic Management?

In many different disciplines, there is a prescriptive way to approach tasks and goals as well as a descriptive way. The prescriptive approach is best described as doing things “by the book”, tackling a challenge like learning a language or navigating new parenthood according to the strategies recommended by experts. Conversely, the descriptive approach is learning by experience. For a language learner, this might mean immersion in the language, and for a new parent, it often means learning by trial and error.

Strategic management is no exception to this concept. At its core, managing people is all about the relationship between an organizational leader and the people she manages. She can approach this role by learning how to manage her team by asking for their thoughts and opinions, a descriptive approach to management, or she can apply a prescriptive approach, which means communicating her positions and her goals with the expectation that her team will follow her in pursuit of them.

Tip

With the prescriptive approach to strategic management, leaders make the decisions and expect their employees to comply.

Strategic management is the ongoing process of optimizing an organization to meet its goals. It involves defining the company’s goals and developing policies and environments that move the company toward achieving those goals. Typically, companies need to adjust their resource allocations and pivot to meet new and different consumer needs over time to stay competitive. In a nutshell, this is strategy.

Strategic management in action is the process of taking concrete steps to meet goals. It also involves one of a company’s most valuable assets: its people. Any steps a company takes impacts its employees, such as increasing its marketing budget, changing suppliers or establishing itself as a leader in one market to increase its clout in another, and the employees’ role in taking these steps determines whether a company employs a prescriptive approach to strategic management or another approach.

There are multiple schools of thought on strategic management. Two primary schools of thought are the prescriptive approach and the descriptive approach. The main difference between these two approaches to strategic management is the direction in which decisions flow. With the prescriptive strategy, leaders make decisions and expect employees to comply, while under the descriptive approach, leaders seek input and feedback from their subordinates.

Renowned McGill University management studies professor Henry Mintzberg identified another distinct management strategy: emergent strategy. Emergent strategy, he described, is a type of management strategy that develops organically within an organization. It develops in spite of the company’s stated business goals and mission or despite a lack of a mission and goals.

Understanding the Mintzberg emergent strategy can help a business leader understand the prescriptive strategy better because it provides a clear contrast. While an emergent strategy develops in the absence of or in opposition to a defined mission statement and goals, a prescriptive strategy is built around a company’s goals and mission. For example, a rehabilitation center that takes a holistic approach to patient progress might consciously employ a similarly holistic management strategy for its employees. In practice, this could mean regular employee check-ins with an on-site counselor or a company culture that encourages employees to set personal goals for themselves and hold each other accountable for reaching them.

Mintzberg described emergent strategy as “realized strategy” in contrast to “defined strategy”, which refers to prescriptive strategy. Like any other approach to strategic management, the Mintzberg emergent strategy has its advantages and its drawbacks. Its advantages include flexibility, adaptability and the organic development of management strategies that work for the companies where they develop. Its drawbacks include its capacity to become incoherent, the possibility of mixed messages for employees sprouting from an emergent management strategy and overall confusion and chaos when such a strategy is not clearly defined and communicated to team members.

When business leaders determine strategies and communicate these strategies to their teams, they set the tone for how employees will interpret and utilize the strategies. With the prescriptive approach, each employee’s role on his team and within the larger company strategy is defined clearly, as are his supervisor’s expectations for him and what he can expect in the future. There are numerous concrete benefits to following a prescriptive strategy, such as:

• Objectives are defined clearly.
  
  
• Every member of the organization (ideally) understands the organization’s goals and processes.
  
  
• The company hierarchy is clear to all members of the organization.
  
  
• Because goals are clearly defined, success can easily be measured.
  
  
• Resources have clear allocations.
  
  
• The solutions to specific challenges are clear; little or no time is spent determining how to handle challenges that arise.

Like other approaches to strategic management, the prescriptive approach is not flawless. The very elements that are considered benefits under some circumstances are drawbacks in others. For example, the prescriptive approach’s adherence to a prescribed plan of action can make it very inflexible. When a company operating under prescriptive strategic management encounters challenges that were not laid out in its plan, company leaders can find themselves feeling overwhelmed and lost.

Other drawbacks to taking a prescriptive approach to strategic management include:

• Employees can feel that their input is not valued.
  
  
• Rigid strategies can lead to excessive bureaucracy and time spent unproductively.
  
  
• A single mistake by the business owner or leader can derail company progress.
  
  
• Pivoting can be difficult when a strategy is clearly not working.
  
  
• Sticking to a prescribed strategy can cause a company to miss business opportunities.
  
  
• It can be difficult to adapt to changing environments.

Put simply, taking a prescriptive approach to strategic management means creating a "map" to reach a specified goal and then following that map by moving through each of its distinct steps to reach the identified goal. By outlining the steps each member of the team will take to move the company closer to its goal, this approach makes it easy for company leaders to determine where on the map they currently stand at any time and how to correct their course if necessary.

Many companies take a blended approach to strategic management. Rather than having business leaders plot out strategies to the last detail, they create somewhat looser, more general strategies and solicit input from department heads and employees. This way, employees at various levels of the company hierarchy can voice their concerns about the strategy and suggest alternative actions. A mixed approach like this can prevent poorly planned strategies from going into practice and can improve upon proposed business strategies.

A strategy might even start from a fairly prescriptive position and then develop down a more descriptive or even emergent path as the company finds its footing in its industry. For example, a used car dealer might create a detailed plan for becoming the dealer of choice among a community’s older buyers by offering low-cost, low-mileage commuter vehicles. While pursuing a strategy of running daytime television advertisements and taking out ad space on diner placemats, the company might start asking its employees about how their parents and grandparents approach buying used cars and what they value in interactions with dealers. This might drive the company to alter the language it uses in its advertisements or to change where it runs advertisements.