STRATEGY: IN THE FIELD OF MANAGEMENT

In organizational management, the concept of strategy is

mostly taken as a slightly different from rather than in Military
Science. However, even in this form, various experts do not
agree about the unified scope of strategy. Alfred D Chandler
makes a comprehensive analysis of the interrelationship
among the environment, strategy and organizational
structure.
It was Drucker who pointed out the importance of strategic
decisions in the practice of management at the first time in
1955 as, all decisions of business are the means to achieve
the expectations of decision makers. However, the concept of
business strategy was not fully developed until three
outstanding pioneers, Kenneth Andrews, Igor Ansoff and
Alfred Chandler Jr. made their mark.1 Because, the military
sense of strategy, which was originated very beginning, may
not seem to have much relevance to strategy in business,
public sector or other organizations. But at least it conveys
the message that strategy is an art and the ultimate
responsibility lies with the head of the organization. These
three outstanding pioneers were followed by Michael Porter,
Henry Mintzberg, Hamel and Prahaldd, Jauch and Glueck,
Johnson and Scholas, Thompson and Stockland and many
more who further developed the concepts of strategy and
strategic management.
Strategy is the determination of the basic long term goals
and objectives of an enterprise and the adoption of the
course of action and the allocation of resources necessary for
carrying out these goals.2 Similar views have been expressed
by professors at Harvard Business School who have made
considerable contributions in the development of business
policy and strategy. One of them is Andrew who has defined
strategy as:

Strategic Management: Concept and Application

Strategy is the pattern of objectives, purpose or goals and

major policies and plans for achieving these goals, stated in
such a way, so as to define what business the company is in
or is to be and the kind of company it is or is to be. 3 These
two definitions of strategy are quite comprehensive and
include objective setting part of strategy. They mainly focused
on the determination of objectives or goals of an organization.
A strategy is a plan developed by analyzing strengths and
weakness and determining the opportunities and threats the
environment has to offer so that the firm can achieve its
objectives. There are some different views expressed by
various eminent writers. They believe that a firm takes
actions for achieving its objectives in accordance with the
requirements of the external and internal environments. A
similar view is expressed by Jauch and Glueck who define
strategy as:
A strategy is a unified, comprehensive, and integrated plan
that relates the strategic advantages of the firm to the
challenges of the environment. It is designed to ensure that
the basic objectives of the enterprises are achieved through
proper execution by the organization.4
The main features of strategy, according to this definitions
are:
(a) Unified plan which ties all the parts of enterprise together
(b) Comprehensive plan which covers all major aspects of
enterprise (c) Integrated plan which makes compatible with
each other and fits together well, and (d) relates to gain
strategic advantages interacting with various environments.
Jauch and Glueck also developed some basic issues of
strategy. The conclusive issues are: (i) What is our business?
(ii) What should it be? (iii) What are our products, functions
and markets? (iv) What can our firm do to accomplish
objectives?
According to them, the answer of these questions simply
relates the meaning of strategy. First three concentrate on the
setting of objectives where as the last one focuses on the
evaluation of strengths and weakness, opportunities and
threats (SWOT) of the organization. They further compare the
strategy with sports of a game plan. Before a team goes in to

Introduction to Corporate Strategy

the field, effective coaches examine a competitors past

plans, strengths and weakness. Then they look at their own
teams strengths and weakness. The objective is to win the
game with a minimum of injuries and resources.
Johnson and Scholes define strategy as, Strategy is the
direction and scope of an organization over the long-term:
which achieves advantages of the organization through its
configuration of resources within a changing environment to
meet the needs of markets and to fulfill stakeholders
expectations.5 Further, they define It focused towards the fit
together well among all the parts of the plan in order to
achieve the ends. It is a plan that ties all the parts of
enterprise together and covers all major aspects aimed at
gaining a sustainable advantages over competitors.
A complete summary statement of strategy, in fact, says less
about what the word means than it does about the company
involved. According to Andrews Kenneth R., first, it will define
products in terms of more functional than literal, saying what
they do rather than what they are made of. At the same time,
it will design clearly the market and market segments for
which products are new or will be designed, and the channels
through which these markets will be reached. The means by
which the operation is to be financed, will be specified as well
as emphasis to be placed on safety of capital. Usually profit
objectives will be state in terms of earning per share, return
on investment or return on shareholders equity or some
combination of these. Finally, the size and kind of
organization which is to be the medium of achievement will
be described. This definition is mainly concentrated towards
the functional strategy than corporate.
Quinn's6 definition of strategy is very useful because it
combines internal resources with external focus: "A strategy
is the pattern of plan that integrates an organization's major
goals, policies and action sequences into a cohesive whole. A
well formulated strategy helps Marshal and allocate a
organization's resources into a unique and viable posture
based on its relative internal competencies and short
comings, anticipated changes in the environment, and
contingent moves by intelligent opponents."

Strategic Management: Concept and Application

From these definition, some key attributes of strategy can be

identified as follows:
(i) Strategy in either a plan or a pattern of action: The
presumption that strategies are formal statements and
should be written.
(ii) That pattern of action is in sequence: Thus to
combine these two strategy and action together, strategy
can be 'emerging pattern of action' as Mintzberg puts it,
which evolve over a period, with a clear view of the
outcome desired and planned for.
(iii) Coordinating resources: Strategy is about coordinating
resources in a unique way based around the organization
in internal competencies, coping with its short comings
around the organization. Coordination presupposes
collaboration between functions, departments and
individuals.
(iv) Future action: Strategy is about future action based on
forecasts, guesses and anticipated change both in the
environment
(political,
economic,
social
and
technological) and about what the competitors will do, or
have done.
From these definitions and explanations, it is clear that the
scope of strategy becomes too broad to include total
managerial
functions
which
are
related
with
the
determination of organizational objectives in the light of
environmental variables and the determination of course of
action and commitment to achieve such objectives.
Dilemma of Forming Strategy

Mintzberg talks about the formation of strategies, rather than

the formulation of them. Fig. 1 shows the idea.

Introduction to Corporate Strategy

Fig. 1: Mintzberg's strategy types (Mintzberg/Waters 1985: 258)

An example of this approach
Collins and Porras (1994). found that amongst their 18 high
performing visionary US companies there was no evidence of
brilliant and complex strategic planning.

Rather, their

companies make some of their best moves by experimentation,

trial and error, opportunism and - quite literally - accident. What
looks in retrospect like brilliant foresight and preplanning was
often the result of Lets just try a lot of stuff and keep what
works . Behn (1988) had already found similar results in the
public sector. None of this would have come as a surprise to
Lindblom (1959) whose prescient article pointed out much the
same thing many years ago, but which fell into disuse over the
years of dominance of the command model. Lengnick Hall
and Lengnick Hall (1988) also challenged the assumption that

Strategic Management: Concept and Application

strategic decisions were taken at a particular point in time such

that the influence of HRM on that process could be measured.
See Brewster Mail
1.

2.

3.

It has been observed that the organizations that use strategic management
formally and consciously outperform the organizations that do not manage
strategically. In the light of the above statement, present a case study of any
one Nepalese organization of your choice regarding how far it has practiced
strategic management and how it has reflected in its overall performance
and competitiveness.
Strategic management is a critical element for the success of any enterprise
in the present day globalizing world. How far do you agree with the
statement? Discuss with illustrations indicating the importance of strategic
management particularly from the perspective of Nepalese enterprises.
Why is it essential to have a sound strategic management process for the
efficient operation of an organization? Discuss the importance of the
strategic management process to attain defined goals-with-illustrations.

ENDNOTES

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5
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Armstrong, Michael, (2004), Handbook of Strategic Human Resource Management, Crest Publishing House.
Chandler, Alfred D. (1962), Strategy and Structure, Cambridge MA: MIT Press, P.13
Andrew, Kenneth R. (1971), The Concept of Corporate Strategy, Homewood P. 28
Jauch, L. R. and Glueck, W. F. (1985), Business Policy and Strategic Management, McGraw Hill edition, P.11
Johnson, G. and Scholes, K. (2000), Exploring Corporate Strategy, 4th ed. PHI P. 10
Quinn, J. (1990) quoted in Grant, R. M. (1998) Contemporary Strategic Analysis. (II ed.) Malden, MA, Blackwell.