A New Approach to Strategy Formulation: Opening the Black Box

The strategic planning process is arguably one of the most important topics taught in a management class. Moreover, the subtopic of strategy formulation is both the most pivotal and the most difficult to teach. As many theorists argue, strategy formulation is the “black box” of strategic planning. One approach for both clarifying and teaching strategy formulation uses the thinking process tools of the theory of constraints. In this article, we briefly describe these thinking process tools and apply them to a popular introductory strategy case to illustrate how they can be used to teach strategy formulation. Implications of the thinking process for other strategic management issues are also discussed.