1- r.daa

(

TIIE

NATIJRE

OF

STRATEGY

1.

Origins:

The origins

of strategic

rnanagement can

be

traced back

to the

earliest

civilisations

where

people

began

organising

themselves

socially,

politically and commercially. The

term

"strategy"

is

derived

from the

ancient

Greek

('stratos'

-

army.

'agein'

-

to lead),

where

it

was used to describe

the elements

involved

in

the preparation and

conduct of

military campaigns.

The dominance

of the

military/state

on the development

of

stategy continued

up to

WW2.

Until this

period

leaders

such

as Napoleon,

Von Clauswiz,,I-eri4

Mao Tse-Tung, Sun

Te-Zu, and Montgomery,

etc.

were seen

as great

strategists,

positioning their

various

forces to overcome

some enemy.

pre

WW2 was inextricJbly

linked

to

military

power and

visa

versa. WW2

was

a

watershed in the

application

of strategy

in

that it

was recognised

that

many

of

the skills,

processes and contexts

used

in the art

of

war could

be used

independently to

gain commercial success.

In its simplest

form

a

the development

ofstrategy

in a business/corporate

sense

can

be

seen

in four

distinct

phases.

a. 1900's:-

Budgeting

and Control:

Featured

systematic

management;

assumed

that

past

conditions

would

prevail in the

future'

Dominated

by

military/bureaucracie

s.

b.

1950's:-

Long-Range

Planning: Plans

based

on forward

projection

of trends.

c.

1960/70's:-

Strategic

Planning:

Analysis

of the

business

environment

was

important,

as

were business

cycles, in

particular, annual

ones.

d.

1970's*: -

Strategic

Management:

Also

an environmental

emphasis

but,

due

to

the

failure

of the

planning regimes in

the 1970's,

the

process avoids

use

of

planning

cycles

and

depends on continual

adjustment.

The route

taken

has

been

one

that

has

recognised

the

increased complexity

of the

environment

in

which businesses

have to operate.

It acknowledges

that

our

understanding

ofthe

business

environment

has

increased,

as

has

the amount

of information,

resulting

in

more

detailed,

and

thus

complex,

analyfical

and

decision

making

techniques.

It is

important

to

recognise that strategic

management

is

about selecting

the

optimal

solution

for

your

parlicular

situation

from

the

information

at

your

disposal.

Definition

of Strategy:

There

are

many definitions

of

strategy.

J&S have

put

forward a

statement

that covers the main

aspects

of the

subject'

.

Sf,-ategy

is the direction

and

scope

of an organisation

over

the long-term

which

matches

its resources

to its

changing

environment

and, in

pafticular, its

customers/markets,

so

as to

meet stakeholder

expectations.

Notice

that J&S

do

not mention

planning. Strategic

management

is not planning. It may

well

include

planning but

strategy

is far

more

subtle

and responsive

than

a set of

plans. Planning

cultures

and regimes

frnd

it difficult

to

respond to rapid

changes

in their

environments

and

consequently

suffer

at

the

hands of

those

organisations

with less

rigid management

systems.

Michael

Porter

at Harvard

led

the

field in strategic

determination

with respect to

the external

environment

(MBV).

Other

writers,

notably,

Hamel

and

Prahalad

have championed

internal

aspects

through

RBV.

We can

suppose

that

the best

approach

to

strategic determination

both

intemal

and external

factors

since

it

would

be foolish

to

claim

that an organisation

can

operate

without

regard

to its

external

environment

and

in the

same

vein

it is impractical

for organisations

to

develop suicessfully

without a

clear

understanding of

their

own

internal resources

and capabilities.

Increasingly,

writers and

practitioners

are moving

towards

a holistic

(the

organisation

and

environment)

approach

towards

strategic

determination.

The

scope of strategy:

Strategy

should

consider all

the

elements of

an organisation

and

how

they

inter-relate

with eaih

other

and,

most importantly,

with

the environment

in

which

they

operate.

It

should

not

be

the

preserve

of the

board

of

directors to

formulate

strategy.

Both

formulation

and

implementation

should

involve

other

members of

the organisation'

2.

3.

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Essentially

the process

of

sEategy

making

should be

viewed

within an

external

environment

continuum.

If

the

environment

is

stable

then

a iational

approach

is

appropriate.

If

environment

is

fast changing,

or

even

chaotic,

then

emergent

(descriptive)

techniques

ar€ more

appropriate.

The

incrementalist

view

seeks

to

build

a

'change culture' within

the

company

such

that

some

aspect

of stategic

change

is

always

being determined.

Incremental

(descriptive)

change

usually

happens

in moderately

dynamic/dynamic/chaotic

environments.

Minuberg

has

written

widely

on

this

subject

and developed

a concept

of

ten strategic

schools,

which

distinguish

in

the

way

a corporate srategy

is

formed.

Essentially, however,

the

division

is

between

prescriptive

approaches

(three

schools:

Planning, Positioning,

Design)

and

descriptive

approaches

(seven

schools:

Entrepreneurial,

Cognitive, Learning, Power,

Cultural, Environmental,

Configuration.)

The

choice

essentially

relates

to

the state of

the

environment

and the

cultural

make-up

of the company.

(See

Strategy

Safari: Minuberg,

Ahlstrand

and

Larnpel,

Prentice

Hall,

1998)

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