Miles and Snow Typology
MILES AND SNOW TYPOLOGY
In their 1978 book Organization Strategy, Structure, and Process, Raymond E. Miles and Charles C. Snow argued that different company strategies arise from the way companies decide to address three fundamental problems: entrepreneurial, engineering (or operational), and administrative problems. The entrepreneurial problem is how a company should manage its market share. The engineering problem involves how a company should implement its solution to the entrepreneurial problem. The administrative problem considers how a company should structure itself to manage the implementation of the solutions to the first two problems. Although businesses choose different solutions to these problems, Miles and Snow suggested that many companies develop similar solutions. As a result, they postulated that there are four general strategic types of organizations: prospector, defender, analyzer, and reactor organizations.
Prospector organizations face the entrepreneurial problem of locating and exploiting new product and market opportunities. These organizations thrive in changing business environments that have an element of unpredictability, and succeed by constantly examining the market in a quest for new opportunities. Moreover, prospector organizations have broad product or service lines and often promote creativity over efficiency. Prospector organizations face the operational problem of not being dependent on any one technology. Consequently, prospector companies prioritize new product and service development and innovation to meet new and changing customer needs and demands and to create new demands. The administrative problem of these companies is how to coordinate diverse business activities and promote innovation. Prospector organizations solve this problem by being decentralized, employing generalists (not specialists), having few levels of management, and encouraging collaboration among different departments and units.
Defender organizations face
In their 1978 book Organization Strategy, Structure, and Process, Raymond E. Miles and Charles C. Snow argued that different company strategies arise from the way companies decide to address three fundamental problems: entrepreneurial, engineering (or operational), and administrative problems. The entrepreneurial problem is how a company should manage its market share. The engineering problem involves how a company should implement its solution to the entrepreneurial problem. The administrative problem considers how a company should structure itself to manage the implementation of the solutions to the first two problems. Although businesses choose different solutions to these problems, Miles and Snow suggested that many companies develop similar solutions. As a result, they postulated that there are four general strategic types of organizations: prospector, defender, analyzer, and reactor organizations.
Prospector organizations face the entrepreneurial problem of locating and exploiting new product and market opportunities. These organizations thrive in changing business environments that have an element of unpredictability, and succeed by constantly examining the market in a quest for new opportunities. Moreover, prospector organizations have broad product or service lines and often promote creativity over efficiency. Prospector organizations face the operational problem of not being dependent on any one technology. Consequently, prospector companies prioritize new product and service development and innovation to meet new and changing customer needs and demands and to create new demands. The administrative problem of these companies is how to coordinate diverse business activities and promote innovation. Prospector organizations solve this problem by being decentralized, employing generalists (not specialists), having few levels of management, and encouraging collaboration among different departments and units.
Defender organizations face