The Concept of

Strategy
Session 2

Department of Business
Administration

In this discussion, you will be

able to understand strategy
process with a broadened
perspective and an open mind

Origins of Strategy
Strategy as a field of human inquiry &
concerned may be old as civilization
itself. Some of the few Oriental, Greek,
& Roman classics that have survived
deal to some extent with what we
might commonly term strategy
(conceived as rational decision-making
& selection of the best course of action
under a given set of circumstances).


With rich military literature published
since the 18th century, the science of
strategy attempted to replace the art
of strategy. This trend reached its
peak after WW ll with introduction of
operations analysis with computer
technology that attempted to model
reality using a large but finite number
of variables.

The Etymological
Definition
Etymologically, the word strategy can be
traced back to the Greek word
strategos, defined as the commander in
chief of the ancient Greek city-states. By
expression, the concept of strategy came
to imply the art of the general in the
conduct of war.
The etymological meaning of strategy
relates this concept to that of leadership.
One of their roles is to formulate and
implement strategy.

...
This function of leadership
implies a continuous flow of
decisions under conditions of
high stress and with incomplete
and ambiguous information.
Such a decision-making process
is an art that integrates
experience with analytical and
intuitive capabilities.

...
The next step is to implement these
decisions which needs an another
set of leadership skills that includes
the ability to communicate clearly
and to mobilize the necessary
people and resources to translate
decisions into actions. This early
conception of strategy has strongly
influenced the strategy literature
throughout the ages.

Normative versus
Descriptive Perspectives
Detailed analytical-logical models
that tell us what strategists ought to
do. The planning school and Ansoff
(1965) offer examples of the
normative perspective. At the other
end are thick descriptions of the
messy process of strategy formation
and implementation, usually in the
form of case studies.


Mintzberg (1994) has criticized
the normative literature and
argued that its detailed
prescriptions of what strategists
should do have little
resemblance to observable
reality.

Strategy formulation as a leftbrain, right-brain, or group

process
Is (or should) the process of
strategy formation (be) essentially
analytical and rational or intuitive
and synthetic? Strategy formulation
seldom involves a single actor, to
what extent do group dynamics and
politics play a role in real-life
strategy formulation?

The development of the strategy

field
Strategy writers display an imposing
conviction (confidence) in both the certainty
of their analytical frameworks and the
relevance of their results to managers and
policy-makers. Success, measured in sales
and citation indexes, has been remarkable
for leading authors such as Porter.
Fields development has been a progressive
extension in central areas such as industry
analysis, acquisitions, alliances,
cooperation. The vast majority of work has
remained within the paradigm which gives
purpose to strategy studies: neo-classical
economics.

 A minority quota of strategy searching

for alternative perspective drawing on
separate paradigms, but organization
studies has them abundance. It is
diverse, and rejected the paradigm
consensus of disciplines. They celebrate
the theoretical openness and pluralism
of the subject.
The inability to distinguish sufficiently
clearly between taxonomy, deductive
logic, and empirical observations is
responsible for the limited progress
which is being made on the development
of an organized framework for the study
of business behaviour.
( Clegg, Hardy & Nord, 1999)

 Subject of strategy has suffered

from the neglect of sociological,
legal and alternative economic
theory.
Strategy and planning were
synonymous. The essential aim was
to assess the environment of the
firm, forecast the future of the
business and adjust internal
structures and resources
accordingly. The portfolio matrix
and product life-cycle were the
most popular devices to aid
planning process.
( Clegg, Hardy & Nord, 1999)

 The 1970s, it was the era that the notions

of strategy as a product of incremental,
adaptive, emergent processes began.
Quinn and Pettigrew offered the chance
for analysts of organizational power or
culture to intervene.
The 1980s, the diversification and
decentralization failed to meet the
demand of new international competition.
Emphasis shifted to a concentration on
core businesses (Peter & Waterman
1982) and clarification of the firm
objectives in competitive pressures.

( Clegg, Hardy & Nord, 1999)

 Here, Porters generic strategies gained

wider acceptance. The concept of
strategic intent (Prahalad and Hamel
1985) was centered in the decade.
These constructs took over from the
Boston Box frameworks and spoke
about need for Western businesses to
discover appropriate standards required
to compete with the Japanese.
Fundamentally rationalist Peter &
Waterman skillfully combined an
appreciation of superficial
understandings of culture and structure
with key features of strategic choices.
( Clegg, Hardy & Nord, 1999)

 Many social scientists predominate in

list-building, rush to prescription and
the statements of obvious found in
key strategy texts.
Organizational sociologists have much
to offer the strategy field in their
techniques of researching action,
perception, and social construction.

Strategy concept had emerged

with three distinct mental models
the linear, the adaptive and the
interpretive (Chaffee 1985).
( Clegg, Hardy & Nord, 1999)

Concluding remarks
In practice strategy is far more complicated
(than what Chandler defines). Evidently
objective decisions relating to finance or
products are conditioned by the social
character of an organization. Business
strategy is by no mean rational. It is critical
to examine intricacies/details of the
interior life of the firm to deconstruct
strategic management which is re/shaped
by structure, culture, and politics in wider
social and political context.