What is Strategy?
Definition and History
Strategy could be defined as a science using data and reasoning, an art using vision and ideas or a humanity, using history. Four generic approaches to strategy would be considered in this essay. These are: the classical approach, the evolutionary approach, the processual approach and the systemic approach.
The word strategy is derived from the ancient Athenian word strategos meaning ‘a general’ which comes from roots meaning ‘army’ and ‘lead’. Hoskin (1990) finds that many of the earliest managerial systemisers of American business shared military origins, in particular, training at the officer cadet school West Point in the early nineteenth century. In contemporary strategy analysis, there is still an influence of military imagery.
Mintzberg’s 5Ps
Henry Mintzberg (1987) came up with 5 Ps for strategy which are: plan, ploy, pattern, position and perspective.
Strategy as a plan is a conscious set of actions, a guideline to deal with a situation. This implies that strategies are made in advance of the actions to which they apply and they are made consciously and purposefully.
Strategy can be a ploy too as a plan: an intended ‘manoeuvre’ to outwit opponents. Ploys are tactics and work together with plans.
Strategy as a pattern is a stream of behaviours. It is consistency in behaviour, whether or not intended. Patterns are realised strategies unlike plans which are intended strategies.
Strategy as position is a means of locating an organisation in an ‘environment’. A position can be preselected or aspired to through a plan (ploy) or can be reached through a pattern of behaviour. Achieving a desirable strategic position can avoid competition.
Strategy as perspective looks inward as opposed to strategy as position which is external. It is to the organisation what personality is to an individual. It suggests that strategy is a concept, a vision or mission which must be shared by all members of the organisation.
Competing Approaches
The Classical Approach to Strategy
For Classicists, profitability is the supreme goal for business and rational planning, the means to achieve it. The beginning of a coherent discipline emerged in the 1960s, with the writings of business historian Alfred DuPont Chandler (1962), theorist Igor Ansoff (1965) and businessman Alfred Sloan (1963). These three men established the key features of the Classical approach: the attachment to rational analysis, the separation of conception from execution, and the commitment to profit maximisation. Chandler (1962) believes strategy to be: the emphasis on the long run, the explicit and deliberate conception of goals and the logical cascading of actions and resources from original objectives. The military metaphor reinforces typical features of Classical approaches to strategy. Classicists believe in the superiority of top-down, planned and rational approach to strategy. The ideal of rational economic man projects strategy as the product of a single entrepreneurial individual, acting with perfect rationality to maximise ‘his’ economic advantage. The classical approach to strategy places great confidence in the readiness and capacity of managers to adopt profit-maximising strategies through long term planning.
Evolutionary Perspectives on Strategy
The Evolutionary theorists are less confident about management’s ability to plan and act rationally. They expect markets to secure profit maximisation. They believe in the natural selection process and argue that irrespective of whatever methods managers adopt, only the best performers will survive. Markets, not managers, choose the prevailing strategies within a particular environment.
Gause (1934) says: coexistence is impossible if organisms make their living in an identical way. This theory can be applied to businesses. The market ensures that everybody has access to Michael Porter’s (1985) writings on competitive advantage,