The Harvard Policy Model

The Harvard policy model was developed as part of the business policy course taught at the Harvard Business School since the 1920s (Christensen et al. 1983 and earlier versions). The main purpose of the Harvard model is to help a firm develop the best fit between itself and its environment, that is, to develop the best strategy for the firm . According to Andrews (1980), strategy is "a pattern of purposes and policies defining the company and its business." If the appropriate strategy is identified and implemented, the organization will be more effective. Central to this model is attention to the internal strengths and weaknesses of the company and the values of senior management, to the external threats and opportunities, and to the social obligations of the firm. The systematic assessment of strengths, weaknesses, opportunities, and threats - or SWOT analysis - is the primary strength of the Harvard model.

Therefore, this model appears to be best applied at the level of the strategic business unit (Rue and Holland 1986). The main weaknesses of the Harvard model is that it does not offer specific advice on how to develop strategies, except to note that effective strategies will build on strengths, take advantage of opportunities, and overcome or minimize weaknesses and threats.

Strategic Planning Systems

Strategic planning system is conceived as a system whereby managers go about making, implementing, and controlling important decisions across functions and levels in the firm. For example, Lorange (1980) has argued that any strategic planning system must address four fundamental questions: (1) Where are we going? (mission), (2) how do we get there? (strategies), (3) What is our blueprint for actions? (budgets), and (4) How do we know if we are on track? (control). Therefore, the systems include usually three cycles: strategic issue identification, strategy development, and strategy implementation (Eckhert et al. 1986). Strategic planning systems vary along several dimensions: the comprehensiveness of decision areas included, the formal rationality of the decision process, and the tightness of control exercised over implementation of the decisions (Armstrong 1982)

The strength of these systems is their attempt to coordinate the various elements of an organization's strategy across levels and functions.

Their weakness is that excessive comprehensiveness, prescription, and control can drive out attention to mission, strategy, and organizational structure (Frederickson 1984), and can exceed participants' ability to comprehend them (Bryson, Van de Ven, and Roering 1987).