Strategy: The Way The Gaints Perceives
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INTRODUCTION:
“Strategic management is a continuous, iterative process aimed at keeping organizations as a whole appropriately matched to its environment”
(Certo and Peter, 1990).
This report critically evaluates the different approaches adopted by different authors in explaining the concept of strategic management and outlining their main characteristics. The term strategy is vast; it not only defines the direction of an organization but also defines the milestones it has to reach while moving in that direction. In this unstable business environment of today the organization faces different forces such as technological innovations, market instability, chaos, government policies and so on. All these factors has contributed for the changes in the environment, therefore affected the way business strategies are devised and executed. Different authors have diverse views about strategy, the discussion below compares and contrasted views of some of the authors of strategic management, understanding their perceptions. The first part of the report states different definitions of strategic management, the second part explains he concept of context, it answers the questions like, what is context? Why is context important? The third part compares and contrasts various perceptions of different authors regarding strategic management. Finally it concludes by summarizing all the key points in this essay.
There are many definitions and assumptions of strategy, selections of which are reproduced below:
Grant (1995) defines strategy as a “unifying theme that gives coherence and direction to the individual decisions of an organization or a person”. Johnson & Scholes (1997) define strategy as the direction and scope of an organization over the long term providing advantages for an organization through its settings of resources within a changing environment, to meet the different needs of the market, and fulfill the expectations of the stakeholder. Quinn (1980) stated that ��a strategy is a plan that integrates an organization goals and actions into a cohesive whole”. Mintzberg and Quinn (1991) write that strategy can be a plan, a ploy, a pattern, a position, or a perspective dependent upon the context. A starting point to begin with would be to explore the different approaches of the schools.
Now before plunging towards discussing different perceptions about strategic management it is very much important, to realize the importance of context in development of strategy. Context forms the background to strategic management; all other elements of strategic management have to be appropriate to the context. Context is both subjective and objective. Context is multidimensional, Context depends upon the perception of an organization for example a company that deals in bus transportation views itself as in passenger transportation, public transport or as an entertainer (luxury transport). The context will be different for all the three different views. The context is the environment within which the company has chosen to exist. Therefore, before the commencement of the strategy formation, understanding the context is very essential, because once a context is selected, the company will try to draw its revenue and profit from it. An organization, which chooses wrong context, is in dire jeopardy from the start. So choosing the right context is a must. Further Beer (1984) describes context as something that provides questions, issues, and dilemmas which strategic management need to resolve. Beer perceives context as identifying and assessing situations, which the organization was exposed to in the past or probably will face in the future. The uniqueness of the context is very important sometimes there are similarities between two contexts but there will be some characteristics those are different in both the context. Uniqueness of context is required since there are different strategic models to choose from and choosing the correct model for a particular context is very important, as a general model would not provide with the whole truth. Since the contexts are unique, each context presents a set of issues and dilemma to a particular organization, so these issues, and dilemmas could not be transfer from one organization to another. Even the imitator organization cannot use the same issues and dilemma. Now for choosing a context the following key element needs to be taken under consideration:
The investors, the key users, the environment (in which the organization is operating), the government, and the market. The investors or the shareholders are one of the key elements in forming the context, it is necessary to identify the key shareholders of the company. Secondly, the government plays an important role in defining context, the government policies regulates the way the organization operates in a particular country. Sometimes government does not recognize some businesses, these situations arises the need for taking government as a crucial factor while deciding the strategy. Thirdly the key users are identified and taken into considerations while developing the strategy, the key users such as the customers, employees etc are the main assets of the organization, any strategic plan the organization devise has to involve these key users. Fourthly, environment is always kept under consideration whenever a strategy is made; environment does not only signify the climatic change but also the surroundings in which the organization is operating, a change in the environment (may be political/legal, social, economical etc) affects the operations of the organization. Lastly, the market (the battleground) on which the organization is competing is taken into the context while structuring the strategy. A thorough research (PESTEL analysis) of the market is necessary before entering the market since it throws light on the position and prospects of the organization in that particular market. (Cummings, 2004).
Once a complete understanding of the context is prepared, the next big thing will be developing the strategy. There is no full proof procedure for making strategy; many authors such as Mintzberg, Whittington, and Pascal have provided the world with some schools of thoughts, the report further converse 10 schools of thoughts of Mintzberg with others
Mintzberg & Lampel (1999) listed 10 different schools in one of the most well known classification about strategic thinking. For them, they signify different processes for determining strategy for all parts of the same process. Among the schools of thought that formulate analytic and prescriptive strategy, the strategy is defined before hand. I.e. The