Miles and Snow Organizational Strategies

Background

The model of organizational strategies was developed by Raymond E. Miles an Emeritus Professor at University of California and Charles C. Snow a Professor in Business Administration at Penn State University. 

The review of the model is based on the book “Organizational Strategy, Structure, and Process” published in 1978. 

The model gives you an introduction to how you can change your organization's strategy and design goals and processes in your organization to support the new strategy. 

The model's main topic is how management handles the process of organizational adaptation, given that each of the organizational alternatives assigns management to a different role.

Miles and Snow identified four basic types of strategic behaviour and supporting organizational characteristics that they referred to as Defender, Prospector, Analyzer, and Reactor.

About the model

The model consists of two dimensions. One placed vertically and the other placed horizontally.

The vertical dimension differentiates between low exploitation at the bottom of the model and high exploitation at the model's top. With high exploitation, the management is trying to do better within the existing market opposite low exploitation, where they are satisfied with doing it the same way as always. At high exploitation, lean projects are done on an ongoing basis. At low exploitation, no one is trying to improve the organization's processes. 

The horizontal dimension differentiates between low exploration on the left side of the model and high exploration on the model's right side. With high exploration, the management is trying to do different things opposite low exploration where they are not looking for new markets or trying to invent new products. At high exploration, the management sees themselves as inventors or entrepreneurs. At low exploration, the management can get in a position where they see themselves as persevere of a heritage. We protect our customers. They must not be exposed to new products or services within our business area.

The two dimensions form a matrix consisting of four quadrants; these are

The Defender in the upper left corner with low exploration and high exploitation

The Prospector in the lower right corner with high exploration and low exploitation

The Analyzer in the upper right corner with high exploration and high exploitation and finally

The Reactor in the lower-left corner with low exploration and low exploitation

Miles and Snow found that all four organizational strategies are affected by the same problems. 

Miles and Snow found three major problems that require management attention and decisions These are the entrepreneurial problem, the engineering problem, and the administrative problem.

Each of these problems is interrelated, and each must be considered fully by management before an organizational strategy is completed.

The first organizational type is “the defender” in the upper left corner.

The entrepreneurial problem is to “seal off” a portion of the total market to create a stable set of products and customers. The is no or low exploration for new opportunities.

The second organization type is "the prospector" in the lower right corner. In many ways, prospectors are just the opposite of defenders.

The entrepreneurial problem is locating new products and opportunities. It is about exploration, also sometimes called innovation. They are always trying to find new possibilities.

The third organization type is "the analyzer" in the upper right corner. They share some of the characteristics of the prospector and some of the defenders' characteristics. The entrepreneurial problem is to locate new products and market opportunities while simultaneously maintaining a firm base of traditional products and customers.

The fourth and last organization type is "the reactor" in the lower-left corner. They have non or low exploration and exploitation. Those firms that land in the reactor category have no specific business approach.

Miles and Snow found no connection between the three major problems in companies placed in this organizational strategic type. This makes the review of the three major problems irrelevant. It should go without saying that organizations generally do not want to fall into the reactor type, as this means that they are simply trying to catch up with the market as things change over time.

Three of these strategic types –label the Defender, the Analyzer and the Prospector – are "stable" forms of organization. If management chooses to pursue one of these three strategies and designs the organization accordingly. The organization may be an effective competitor in its particular industry over a considerable period.

Criticism of model

You must define the concepts low and high on the two axles yourself.

The model does not provide an answer about which or the three strategic organization types is best at which point in time

The model does not give any hinds about when the company should shift position between the three stable strategic organization types

The model does not give any hinds about when the company should shift position between the three stable strategic organization types

The model is excellent in understanding the relationship between control and flexibility in an organization and making decisions that are consistent with the overall strategy