Design school – Strategy as a process of formation (Mintzberg et al., 1998:p. 23-45)
Design school is centralized formation strategy in which the idea comes before the action. This school focuses on identifying the opportunities according capabilities and constrains. And the popular strategic planning tool for evaluating a project and a potential business venture as designing school is to analyze SWOT – Strengths, Weaknesses, Opportunities and Threats. In the simple view, designing school is a model of strategic – making which must match between internal capabilities and external possibilities. Even though this school implies two different directions, but interconnected, internal capabilities is the chances of success while external appraisal is the keys of success.
Planning school – Strategy formation of a formal process (Mintzberg et al., 1998:p. 48-79)
This school concentrates on implementation by basing on the Design school: the SWOT analysis. After finding out SWOT, the basic idea is to divide neatly into smaller steps which have been supported with a lot of checklists, to focus on objectives and elaboration of operating costs and budgets. Hence, this school must be made explicit in order that they can be carried out through attention to objectives, budgets and operating plans.
Positioning school – Strategy formation as an analysis process (Mintzberg et al., 1998)
In contrast with design school and planning school with no limits on the strategies, positioning school mentioned that only a few key strategies can fit any given firm. The main concept of this school is to create strategies which are generic, specially common and identifiable positions in the market. Mentioning the responsibilities in this school, analysts play a major role, feeding the results to managers who control and decide the choices.
A resource-based approach to strategic management focuses on costly-to-copy attributes of the firm as sources of economic rents and, therefore, as the fundamental drivers of performance and competitive advantage (Barney, 1986, Rumelt, 1884, 1987). It means that resource – based view is the access way using the role of entrepreneurial resources as one of important sources considered the competitive advantage. Entrepreneur resources are regarded to everything internal to the firm and listed all assets, capabilities, information, knowledge, human resources, etc. A few among these characteristics can be combined and make firms different from one another.
As following, there are some different points between 2 approaches like design/planning/position school and resource based view.
The first difference is “structured and planned” or not. The resource-based view (RBV) has no managerial implications while design, planning and positioning schools are formed under the rational and prescriptive category. It means that RBV only tells managers to develop and obtain valuable, rare, imitable and non-substitutable resources and develop an appropriate organization, but it is silent on how this should be done (Connor, 2002; Miller, 2003) while design, planning and positioning schools discuss how the strategy needs to be done through prescriptive approaches. The prescriptive approaches mention the process of how to formulate, plan, develop and implement the organization strategies by using historical and other data to create the rational arguments. Then, the organization will base on these results to get its goals and achievements.
The second distinction is “Applicability”. The RBV’s applicability is limited while design, planning and position schools can be less different towards large enterprises in the same industry. The limitation of RBV’s application is mentioned that it only holds as long as the rules of the game in the industry remain relatively fixed. In the unpredictable environment, in which new technologies and/or new markets emerge and the value of resource can drastically change, we need to go beyond the RBV to explain a firm’s sustainability (Barney, 2002)
The final difference is that RBV is not the theory of the firm while design/planning/positioning schools are the theories of the firms. Strategy formation undertakes design school is the process of conception, planning school is the a formal process and positioning school is an analysis process (Shekhar, 2009). Hence, they have been considered the theories which any entrepreneurs can base on to propose their strategy. In contrast, the RBV is no theory of the firm because it does not render the RBV problematic as a theory of rents and sustainability (Conner, 1991). It means that RBV has had no intention of explaining the existence and boundaries of firms (Barney, 2005). Hence, we cannot find out any point that requires RBV to meet all criteria for the theory of the firm.