CONCEPT OF STRATEGY

Hence, what role does culture, strategy and its implementation play in attainment of
organisational success? The following factors are key:
• Goals that are simple, consistent, and long term
• Profound understanding of the competitive environment
• Objective appraisal of resources
• Effective implementation since without this, the best- laid strategies will be of little use (Grant,
2010, pp. 11).
Strategy is simply about competitive advantage and this literature explains why strategy is
important to organisational success.
Strategy is not simply about competing for today but rather concerned with competing for
tomorrow. Hence, this dynamic concept of strategy involves establishing objectives for the future
and determining how they will be achieved. Future objectives relate to the overall purpose of the
firm (mission), what it seeks to become (vision) and the specific performance targets.
Strategy is also dynamic by not only competing in the present but rather preparing for the future.
It is also a quest for value because business is simply about creating value. Value is the monetary
worth of a product or an asset.
Strategy is a term that comes from the Greek word ‘strategia’ meaning generalship.
However, the concept of strategy did not originate with the Greeks. Sun Tzu’s classic The Art of
war is regarded as the first treatise on strategy (Tzu, 1988).
While strategy is the overall plan for deploying resources to establish a favorable position; a
tactic is a scheme for a specific actions. Whereas tactics are concerned with the maneuvers
necessary to win battles, strategy is concerned with winning the war (Grant, 2010, pp. 14).
In the military circles, strategy is often referred to maneuvering the troops into the position
before the enemy is actually engaged. In this sense, strategy refers to the deployment of troops.
Once the enemy has been engaged, attention now shifts to the tactics.
Strategy also refers to the means by which policy is effected, accounting for ‘clauswitz’ famous
statement that war is the continuation of political relations via many other means.

1
 Liddel (1967) defines strategy as an art of distributing and applying means to fulfil the ends of
policy. In fact, military strategy is clearly a mean to political ends. So, strategy answers the
question; what are the ends we seek and how should we achieve them?
Mintzberg (1984) equally describes strategy as a plan, a how, and a mean of getting from here to
there. Strategy is simply positioning and a perspective of vision and direction.
He further argues that strategy emerges over time as the intentions or motives collide with and
accommodate a changing reality.
Porter (1996) opined that strategy is about competitive position of a combination of the
ends/goals for which the firm is striving and the means/policies by which it is seeking to get
there. Otherwise, strategy has no existence apart from the ends sought. Hence, it is about means,
the attainment of ends, not their specification. So, establishing the aim or the ends of an
enterprise is only a matter of policy which comes from the Greek word ‘politeia’ and polites- the
state and the people.
Strategy is about how will you do it and what will you do. It is not always about winning but
meeting the stated objectives. It can be defined as the mean by which an organisation seeks to
meet its objectives. It is a deliberate choice, a decision to take a course of action rather than
reacting to circumstances.
Figure 1: Common Elements in Successful Strategies (Source: Grant, 2010: 12).

Successful Strategy

Effective Implementation

Simple, Consistent, Profound understanding of Objective appraisal of

Long- term goals the competitive resources
environment (Culture)

2
 Therefore, the task of business strategy is to determine how the firm will deploy its resources
within its environment and so satisfy its long- term goals, and how to organize itself to
implement that strategy.
The emphasis on strategy as a quest for performance is directing attention to the sources of
profitability for the bank.
The notion of strategic fit is the link between the firm and its external environment.
Nevertheless, for a strategy to be successful, it must be consistent with the firm’s external
environment, and with its internal environment- its goals and values, resources and capabilities,
and structures and systems.
Enterprises needs business strategies for much the same reasons that armies need military
strategies to give direction and purpose, to deploy resources in the most effective manner and to
coordinate the decisions made by different individuals.
Therefore, leading an organisation is clearly more difficult than surfing, but both require
learning. Successfully creating sustainability through changes that progressively build on each
other requires a learning engine that runs throughout the organisation (Hughes & Beatty, 2005,
pp. 19).
Strategy making and strategy implementation processes provide the foundation for that learning
engine and strategic leadership is what drives it. A strategy is a system of finding, formulating,
and developing a doctrine that will ensure long-term success if followed faithfully.
Make strategy a learning process in organisations enhance growth. The extent to which
conditions facilitate strategy as a learning process stems from the combined effect of an
organisation’s culture, structures and systems.
The combined impact of culture, systems, and structure often create fertile soil for allowing
strategy in an organisation to stifle the learning process.
Mintzberg (1984) describes strategy as
• Strategy as plan: a directed course of action to achieve an intended set of goals; similar to the
strategic planning concept.
• Strategy as pattern: a consistent pattern of past behavior, with a strategy realized over time
rather than planned or intended.

3
• Strategy as position: locating brands, products, or companies within the market, based on the
conceptual framework of consumers or other stakeholders; a strategy determined primarily by
factors outside the firm.
• Strategy as ploy: a specific maneuver intended to outwit a competitor. This is common with
Politics, to have a competitive advantage over opponents. Is it for good or bad?
• Strategy as perspective: executing strategy based on a "theory of the business" or natural
extension of the mindset or ideological perspective of the organisation.
Strategy is the end; structure is the means. Strategy is the operationalization of the firm’s goals
of efficiency and/or effectiveness. It uses structure to achieve an end. The strategy space is based
on either exploitation or exploration (Burton, Obel & DeSanctis, 2011).
Strategy should be pursued to obtain the goals and that has to be done taking into account the
environment in which the firm operates. So, achieving high performance in a business results
from establishing and maintaining a fit among these three elements: the strategy of the firm, its
organisational design, and the environment in which it operates is vital.
Therefore a firm’s strategy reflects management’s assessment of the firm’s situation and its
choice of how to pursue the firm’s goals (Burton, Obel & DeSanctis, 2011).

Definition of Terms and Concepts

Strategy: It is focused on achieving certain goals involving the allocation of resources and
implies some consistency, integration, or cohesiveness of decisions and actions. It is a plan of
action designed to achieve a long-term or overall aim (Grant, 2010, pp. 16).
Strategic Management: It involves the formulation and implementation of the major goals and
initiatives taken by an organisation's top management on behalf of owners, based on
consideration of resources and an assessment of the internal and external environments in which
the organisation operates.
Strategic Planning: Strategic planning is an organisation's process of defining its strategy, or
direction, and making decisions on allocating its resources to pursue this strategy. It may also
extend to control mechanisms for guiding the implementation of the.
Organisational Culture: This is the values and behaviors that contribute to the unique social
and psychological environment of an organisation (Schein, 2010). It is a set of beliefs, value,
norms and assumption that are shared by members of an organisation.

4
 Leadership: Northouse (2009) defines leadership as a process whereby an individual influences
a group of individuals to achieve a common goal.

Figure 2: The Basic Framework: Strategy as a link between the firm and its environment
Source: Grant, 2010, pp. 12).

THE FIRM THE INDUSTRY

• Goals, Culture and ENVIRONMENT
Values STRATEGY • Competitors
• Resources and • Customers
Capabilities • Suppliers
• Structure and Systems
As an organisation’s strategy may be influenced by strategic leaders: individuals whose
personality, position or reputation makes them central to the strategy development process. Thus,
strategy, maybe seen to be the deliberate intention of a strategic leader and may manifest itself in
different ways. The following are the roles of a strategic leader:
 Strategic leadership as a command: The strategy of an organisation may be dictated by an
individual. This is perhaps most evident in owner-managed small organisations where that
individual is in direct control of all aspects of the business.
 Strategic leadership as vision: It could be that a strategic leader determines or is associated with
an overall vision, mission or strategic intent that thereby motivates others, help create the shared
beliefs within which people can work together efficiently and guides the more detailed strategy
developed by others in an organisation.
 Strategic leadership as decision making: Whichever strategy development processes exist, there
could be many different opinions on future strategy within an organisation and perhaps much but
incomplete proof to support those ideas.
 Strategic leadership as the embodiment of strategy: An initiator or chief executive of an
organisation may represent its strategy. This can be unintentional but can also be deliberate.

5
 It is the task of top management to contribute to the process and implementation of their
organisation’s strategy.
Furthermore, as an organisation, strategic choices can be distilled to these two basic questions:
a. Where to compete?
b. How to compete?
And the answers to these questions define the major areas of a firm’s strategy:
 Corporate Strategy: This defines the scope of the firm in terms of industries and markets in
which it competes. Corporate strategy decisions include choice over in diversification, vertical
integration, acquisitions and new ventures; and the allocation of resources between the different
businesses of the firm. Corporate strategy is the responsibility of the top management team ant
the corporate staff.
 Business Strategy: This is concerned with how the firm competes within a particular industry or
market. If the firm is to prosper within an industry, it must establish a competitive advantage
over its rivals. Hence, this area of strategy is also known as Competitive Strategy (Grant, 2010,
pp. 19). Business strategy is primarily the responsibility of divisional management.
Here, our main focus is on business strategy since it remains a critical requirement for a
company’s success because of its ability to establish competitive advantage (Porter, 1980).

Identifying a Company’s Strategy

It entails the strategy statement that encompasses the mission statement of organisational
purpose; why company exist?; a statement of principles or value that states what the company
believe in and how they will behave; and the vision statement of what the company want to be.
The strategy statement articulates what the firm competitive game plan will be?
Hence, it comprises three definitive components of the objectives, scope (where the firm will
compete) and advantage (how the firm will compete) (Grant, 2010, pp. 23).
Strategy also occurs as decision support, a coordinating device and as a target.

Goals, Values and Performance

According to Alfred Sloan of General Motors who opined that the strategic aim of a business is
to earn a return on capital, and if in any particular case the return in the long run is not

6
 satisfactory, then the deficiency should be corrected or the activity abandoned for a more
favorable one.
• Goals: This is the scope of the organisation by assessing it through efficiency that focus on
inputs, use of resources and costs) and effectiveness that focus on outputs, products or services
and revenues). Hence, few organisations state their goal directly in terms of efficiency or
effectiveness.
• Values: Business is about creating value as value represents the monetary worth of an asset.
Values can be created in two ways; by production and by commerce. A sense of purpose of the
mission and vision is often complemented by beliefs about how the firm’s purpose can be
achieved. At one level, statement of values and principles may be regarded as instruments of
companies; external image management (Grant, 2010, pp. 55). Values are shared among
employees that form a central component of the organisational culture.
Understanding values requires us to decipher their relationships to needs. A primary function of
values is meeting needs (Hultman & Gellermann, 2002). Values is an enduring belief that a
specific mode of conduct or end-state of existence is personally or socially preferable to an
opposite mode of conduct or end-state of existence.
Values are also psychological constructs because they are internal to a person. Organisations as
such don’t have values but because they are composed of human beings, their cultures are shaped
by values. So, the values of persons shape organisational behavior and the direction taken by
organisations. Value is either terminal or instrumental where terminal values are the preferred
ends such as world peace, happiness and wisdom while instrumental values are the preferred
means for accomplishing those ends focusing on either competence which has to do with one’s
ability and integrity or character.
Values are also based on ethics and morals (Hultman & Gellermann, 2002).
Values can enhance a sense of identity and motivate employees. Since strategy connotes creating
purpose and committing revenues and principles, its major concern is simply to create value for
an organisation in the future (Hultman & Gellermann, 2002, pp. 33).
• Performance: Organisational performance comprises of the actual results of an organisation as
measured against its intended outputs (goals and objectives). According to Porter (1985),
organisational performance includes three specific areas of firm outcomes: (a) financial
performance (profits, return on assets, return on investment, etc.); (b) product market

7
 performance (sales, market share, etc.); and (c) shareholder return (total shareholder return,
economic value added, etc.).
However, the performance of an organisation can be judged by both individual and institutional
investors through quarterly net profit results; as this is now a fairly established practice that can
be evidenced almost daily in the business news section of the media.
Organisational performance model focused on strategy and planning, managing profitability,
minimizing risk, and expertise and capabilities. Organisational performance is a sign of the
capacity of an organisation to efficiently achieve independent goals

Industry Environment: The business environment of the firm consists of all the external
influences that affects its decisions and performance. Thus, the prerequisite for effective
environmental analysis is to distinguish the vital from the merely important (Grant, 2010, pp.
64).

Hence, understanding the porters’ five forces of competition framework: threat of

entry/substitute, threat of new entrants, rivalry among existing firms, bargaining power of
suppliers and bargaining power of buyers will determine the survival of a business strategy. So,
the profound understanding of the competitive environment remains a critical ingredient of a
successful strategy (Grant, 2010, pp. 91).

Concept of Strategic Management

Yogi Berra opined that “In theory, there is no difference between theory and practice. In practice
there is.”
Strategic management is the continuous planning, monitoring, analysis and assessment of all that
is necessary for an organisation to meet its goals and objectives. It also involves the formulation
and implementation of the major goals and initiatives taken by a company's top management on
behalf of owners, based on consideration of resources and an assessment of the internal and
external environments in which the organisation competes (Grant, 2003).
Strategic management provides overall direction to the enterprise and involves specifying the
organisation's objectives, developing policies and plans designed to achieve these objectives, and
then allocating resources to implement the plans.
Porter (1996) stated that:
a. Identifying three principles underlie strategy.

8
b. Making trade- offs by choosing "what not to do."
c. Creating "fit" by aligning company activities with one another to support the chosen strategy.
Some of the current trends in strategic management are the volatility and low growth of the
economy, technology, societal pressures, and dual strategies (Grant, 2010, pp. 464).
1. Strategic Planning: Strategic planning is analytical in nature and refers to formalized
procedures to produce the data and analyses used as inputs for strategic thinking, which
synthesizes the data resulting in the strategy.
2. Strategic Thinking: involves the generation and application of unique business insights to
opportunities intended to create competitive advantage for a firm or organisation. It involves
challenging the assumptions underlying the organisation's strategy and value proposition.
Mintzberg (1994) posited that it is more about synthesis (i.e., "connecting the dots") than
analysis (i.e., "finding the dots").
Strategic management is about two major processes:
a. Formulation of Strategy (How the strategy is planned).
b. Implementation of Strategy (Bringing the strategy into practicable actions).
The entire learning process that entails a specific strategy mind- set, a way of thinking about how
to craft and implement strategy that operates in an ongoing state of formulation, implementation,
reassessment, and revision is guided by:
a. Assessing where we are i.e. information gathering in a competitive environment.
b. Understanding who we are and where we want to go i.e. the futuristic dimension of the
organisational strategy that includes vision, mission and the core values.
c. Learning how to get there i.e. understanding and formulating the critical elements of strategy.
d. Making the journey i.e. translating strategy into action through the implementation of tactics.
e. Checking the progress i.e. continuous assessment and evaluation of organisation’s effectiveness
(Hughes & Beatty, 2005, pp. 20).
However, to develop a strong strategic culture within an organisation, leadership must emphasize
strategy as a learning process but this often takes time and resources to fully develop.
To adequately understand what strategic management means, there is need to define and
understand ‘strategy’ and its attributes.
Strategy is the means by which individuals or organisations achieve their objectives or certain
goals whether it is corporate or business (Grant, 2010, pp. 19).

9
The word "strategy" has been used implicitly in different ways even if it has traditionally been
defined in only one.

Explicit recognition of multiple definitions can help people to manoeuvre through this difficult
field. Management expert, Henry Mintzberg, argued that it's really hard to get strategy right. So,
to help us think about it in more depth, he developed his 5Ps of different definitions of (or
approaches to) developing strategy. These includes:
1. Strategic Plan: Planning is something that many managers are happy with, and it's something
that comes naturally to us. As such, this is the default, automatic approach that we adopt-
brainstorming options and planning how to deliver them. The problem with planning, however,
is that it's not enough on its own. This is where the other four Ps come into play.
2. Strategic Ploy: Mintzberg (1984) opined that getting the better of competitors, by plotting to
disrupt, dissuade, discourage, or otherwise influence them, can be part of a strategy.
This is where strategy can be a ploy, as well as a plan. For example, a grocery chain might
threaten to expand a store, so that a competitor doesn't move into the same area; or a
telecommunications company might buy up patents that a competitor could potentially use to
launch a rival product.
3. Strategic Pattern: Strategic plans and ploys are both deliberate exercises. Sometimes,
however, strategy emerges from past organisational behaviour. Rather than being an intentional
choice, a consistent and successful way of doing business can develop into a strategy.
For instance, imagine a manager who makes decisions that further enhance an already highly
responsive customer support process. Despite not deliberately choosing to build a strategic
advantage, his pattern of actions nevertheless creates one.
To use this element of the 5Ps, take note of the patterns you see in your team and organisation.
Then, ask yourself whether those patterns have become an implicit part of your strategy; and
think about the impact these patterns should have on how you approach strategic planning.
Mintzberg (1984) recommended the use of tools such as Unique Selling Proposition Analysis
(USP) and Core Competence Analysis.
4. Strategic Position: Position is another way to define strategy, that is, how you decide to
position yourself in the marketplace. In this way, strategy helps you explore the fit/alignment
between your organisation and your environment, and it helps you develop a sustainable

10
 competitive advantage. For example, your strategy might include developing a niche product to
avoid competition, or choosing to position yourself amongst a variety of competitors, while
looking for ways to differentiate your services (Porter, 1996).
Mintzberg (1984) emphasized further that, when you think about your strategic position, it helps
to understand your organisation's "bigger picture" in relation to external factors. To do this, use
PEST Analysis, Porter's Diamond and Porter's Five Forces to analyse your environment and
these tools will show where you have a strong position and where you may have issues.
Note: There can be a lot of overlap between "Strategy as a Position" and other elements of the
5Ps. For instance, you can also achieve a desired position through strategic planning and by
using a ploy.
5. Strategic Perspective: The choices an organisation makes about its strategy rely heavily on
its culture just as patterns of behavior can emerge as strategy, patterns of thinking will shape an
organisation's perspective and the things that it is able to do well.
For instance, an organisation that encourages risk- taking and innovation from employees might
focus on coming up with innovative market offering as the main thrust behind its strategy. By
contrast, an organisation that emphasizes the reliable processing of data may follow a strategy of
offering these services to other organisations under outsourcing arrangements.
To get an insight into your organisation's perspective, Mintzberg (1984) recommended the use of
cultural analysis tools like the Cultural Web, Deal and Kennedy's Cultural Model, and the
Congruence Model.
Ovidijus (2013) defines strategic management as a continuous process of strategic analysis,
strategy creation, implementation and monitoring, used by organisations with the purpose to
achieve and maintain a competitive advantage. In essence, it answers the following three
questions:
 Where the organisation is at the moment?
 Where does it want to go?
 How it will get there?
He claimed that, strategic management is not about predicting the future, but about preparing for
it and knowing what exact steps the company will have to take to implement its strategic plan
and achieve a competitive advantage.

11
 Dess et al (2005) posit that strategic management consists of the analysis, decisions and actions
an organisation undertakes in order to create and sustain competitive advantages. This definition
captures two major elements that go to the heart of the field of strategic management. First, the
strategic management of an organisation entails three on- going processes: Analysis, Decisions
and Actions.
That is, strategic management is concerned with the analysis of strategic goals (vision, mission,
and strategic objectives) along with the analysis of the internal and external environment of the
organisation. Next, leaders must make strategic decisions. These decisions, broadly speaking,
address two basic questions:
 What industries should we compete in?
 How should we compete in those industries?
These questions also often involve an organisation’s domestic as well as its international
operations. And lastly are the actions that must be taken. Decisions are of little use, of course,
unless they are acted upon. Firms must take the necessary actions to implement their strategies.
This requires leaders to allocate the necessary resources and to design the organisation to bring
the intended strategies to reality.”
Second, the essence of strategic management is the study of why some firms outperform others.
Thus, managers need to determine how a firm is to compete so that it can obtain advantages that
are sustainable over a lengthy period of time. That means focusing on two fundamental
questions:
 How should we compete in order to create competitive advantages in the marketplace? For
example, managers need to determine if the firm should position itself as the low-cost producer,
or develop products and services that are unique which will enable the firm to charge premium
prices or some combination of both.
 Managers must also ask how to make such advantages sustainable, instead of highly temporary
in the marketplace. That is: How can we create competitive advantages in the marketplace that
are not only unique and valuable but also difficult for competitors to copy or substitute?
Porter (1986) argues that sustainable competitive advantage cannot be attained through
operational effectiveness alone. Most of the popular management innovations of the last two
Decades; total quality, just-in-time, benchmarking, business process reengineering, and
outsourcing all are about operational effectiveness. Operational effectiveness means performing

12
similar activities better than rivals. Each of these is important, but none leads to sustainable
competitive advantage, for the simple reason that everyone is doing them.
Strategy is all about being different from everyone else. Sustainable competitive advantage is
possible only through performing different activities from rivals or performing similar activities
in different ways.
Companies such as Wal-Mart, Southwest Airlines, Apple, GTBank, and Amazon have developed
unique, internally consistent, and difficult to imitate activity systems that have provided them
with sustained competitive advantage. A company with a good strategy must make clear choices
about what it wants to accomplish. Trying to do everything that your rivals do eventually leads to
mutually destructive price competition, not long- term advantage.
Ovidijus (2013) opined that both strategic management and strategic planning terms mean the
same. However, the difference is that the latter one is more used in the business world while the
former is used in the academic environment.
Below are some of the importance of strategic management identified by him:
a. Requirement for sustained competitive advantage: Competitive advantage is what keeps
great organisations ahead of their competitors.
He pointed out that the company, which has a competitive advantage, performs financially much
better than other companies in the industry or better than the industry average. Some companies
may achieve it without thorough strategic plan but for the most players out there it is vital to plan
strategically, i.e. analyze, create, implement and monitor, and do this continuously. It is not
guaranteed that companies will ever achieve competitive advantage conducting strategic
planning but it is an essential process if the company wants to sustain it.
b. View things from broader perspective: The other reason why most organisations don’t
simply rely on their finances, marketing or operations functional areas to create competitive
advantage is that managers of each area often view things only from their own specific angle,
which is too narrow a view for the whole organisation to rely upon.
Only the managers (e.g. CEOs or Strategic Thinkers/Planners) who see the whole picture of the
company and its surrounding environments can make the decisions that bring the competitive
advantage.
c. Facilitates collaboration: Nowadays, most companies involve middle managers of functional
areas into the process of formulating strategic plan. Middle managers are the people who

13
 implement the strategies set out in a plan and if they aren’t involved in making the plan, then
they aren’t so committed to support it.
Thus, strategic management is used to achieve the competitive advantage and to integrate all the
functional areas of the company by facilitating the communication between the managers of all
levels (Mintzberg, 1984).
Ovidijus (2013) also identifies some benefits of strategic management as follows:
 Defines a company’s vision, mission and future goals.
 Identifies the suitable strategies to achieve the goals.
 Improves awareness of the external and internal environments, and clearly identifies the
competitive advantage.
 Increases managers’ commitment to achieving the company’s objectives.
 Improves coordination of the activities and more efficient allocation of company’s resources.
 Better communication between managers of the different levels and functional areas.
 Reduces resistance to change by informing the employees of the changes and the consequences
of them.
 Strengthens the firm’s performance.
 On average, companies using strategic management are more successful than the companies that
don’t.
 Strategic planning allows the organisation to become more proactive than reactive.
Although strategic management has lots of significance and brings many benefits to the
company, but it also has its limitations. Some of these limitations includes:
 The costs of engaging in it are huge.
 The process is complex.
 Success is not guaranteed.
Above are the reasons why small and medium enterprises are usually reluctant to have their own
strategic departments.
However, the advantages of having strategic departments or adopting strategic management
processes far outweigh its disadvantages because strategy is forward looking by not only
providing answers but to help organisations understand the issues (Grant, 2010, pp. 27).

14
One of the key strategic management stages is identification and evaluation of the organisation’s
external environment for a new business opportunities, thus investments.

Theoretical Framework of Strategic Management

According to Ketchen & Short (2013), authors of a book titled mastering strategic management
and published on the web by flat world knowledge Inc., perhaps the earliest- known discussion
of strategy is offered in the old testament of the Holy Bible. Approximately 3, 500 years ago,
Moses faced quite a challenge after leading his fellow Hebrews out of enslavement in Egypt.
Moses was overwhelmed as the lone strategist at the helm of a nation that may have exceeded
one million people. Based on the advice from his father-in-law, Jethro, Moses began delegating
authority to other leaders, each of whom oversaw a group of people. This hierarchical delegation
of authority created a command structure that freed Moses to concentrate on the biggest decision
and helped him implement his strategies.
Similarly, the demands of strategic management today are simply too much for a chief executive
officer (the top leader of an organisation) to handle alone. Many important tasks are thus
entrusted to vice- presidents and other executives. While trying to describe how strategic
management has evolved into a field of study and how strategy in ancient times and military
strategy can provide insights to businesses, they made reference to George Santayana’s quote of
the life of reason which says that “those who cannot remember the past, are condemned to repeat
it.” So, arguing that, Santayana’s quote has strong implications for strategic management. They
claimed further that, the history of strategic management can be traced back several thousand
years. Great wisdom about strategy can be acquired by understanding the past, but ignoring the
lessons of history could lead to costly strategic mistakes that could have been avoided. Certainly,
the present offers very important lessons; businesses can gain knowledge about what strategies
do and do not work by studying the current actions of other businesses.
Perhaps the most famous example of strategy in ancient times as highlighted by Ketchen & Short
(2013) revolves around the Trojan horse, “Greek soldiers wanted to find a way to enter the gates
of Troy and attack the city from the inside. They devised a ploy that involved creating a giant

15
 wooden horse, hiding soldiers inside the horse and offering the horse to the Trojans as a gift. The
Trojans were fooled and brought the horse inside their city.

When the night arrived, the hidden Greek soldiers opened the gates for their army, leading to a
Greek victory.” In modern times, the term Trojan horse refers to gestures that appear on the
surface to be beneficial to the recipient but that mask a sinister intent. Computer viruses also are
sometimes referred to as Trojan horses.
Johnson et al (2006, pp. 4) narrated an incident that happen at Yahoo corporation in 2006 that
made headlines called, ‘the yahoo peanut butter manifesto’ by Garlinghouse; a yahoo senior vice
president who wrote a memo to his top managers arguing that, “yahoo the diversified internet
company, was spreading its resources too thinly, like peanut butter on a slice of bread.”
Garlinghouse, highlighted the need to be part of a solution rather than becoming part of the
problems in the organisation in his memo. And he identified three major challenges that requires
attention:
• Focused and Cohesive Vision: “We want to do everything and be everything to everyone. We
know this for years, talk about it incessantly, but do nothing to fundamentally address it. I have
heard of strategy being defined as spreading peanut butter across the myriad opportunities that
continue to evolve in the online world.
The result is a thin layer of investment spread across everything we do and thus we focus on
nothing in particular. I hate peanut butter. We all should.”
• Clarity of Ownership and Accountability: The most painful manifestation of this is the
massive redundancy that exists throughout the organisation. We now operate in an organisational
structure admittedly created with the best of intentions that has become overly bureaucratic. For
far too many employees, there is another person with dramatically similar and overlapping
responsibilities. This slows us down and burdens the company with unnecessary costs.
• Decisiveness: Combine a lack of focus with unclear ownership, and the result is that decisions
are either not made or are made when it is already too late. Without a clear and focused vision,
and without complete clarity of ownership, we lack a macro perspective to guide our decisions
and visibility into who should make those decisions. We are repeatedly stymied by challenging
and hairy decision.

16
 Grant (2010) admonishes that the evolution from corporate planning to strategic management is
associated with increasing focus on competition as the central characteristic of the business
environment and competitive advantage as the primary goal of strategy. Hence, the emphasis on
strategy remains a quest for performance directed at profitability (pp. 15).

Strategic Management Process

Any business venture, at the beginning, would start with the examination of the business
environment and resources it has. Once that is identified, it would then define its strategic
objectives that eventually should support the firm’s mission, vision and values. After that is
done, they would proceed with the strategy development stage.
Lynch (2012) defines strategic management as an ongoing process that should be revised and
updated on a consistent basis (pp. 3).
An inner circle of strategy implementation includes following stages:
• Planning (assessing the current situation)
• Developing (what organisation wants to achieve; where the organisation wants to be; etc.)
• Integrating (communication across functions and roles)
• Reviewing (what needs to be monitored: KPI, balanced scorecard, metrics)
• Updating and execution (an updated/new strategy is executed).
While an outer circle of strategic management consist of three key decision elements:
• Investment decision (a business opportunity identified and evaluated based on objectives)
• Financial decision (financing sources, cost of capital are identified and evaluated)
• Management decision (go/no- go).
The strategic management process means defining the organisation’s strategy.
It is also defined as the process by which managers make a choice of a set of strategies for the
organisation that will enable it to achieve better performance. The process includes:
a. Environmental Scanning refers to a process of collecting, scrutinizing and providing
information for strategic purposes. It helps in analyzing the internal and external factors
influencing an organisation (Ketchen & Short, 2013).
b. Strategy Formulation is the process of deciding best course of action for accomplishing
organisational objectives and hence achieving organisational purpose. After conducting
environment scanning, managers formulate corporate, business and functional strategies.

17
c. Strategy Implementation implies making the strategy work as intended or putting the
organisation’s chosen strategy into action. Strategy implementation includes designing the
organisation’s structure, distributing resources, developing decision making process, and
managing human resources. This is the most difficult part in our culture.
d. Strategy Evaluation is the final step of strategy management process. The key strategy
evaluation activities are: appraising internal and external factors that are the root of present
strategies, measuring performance, and taking remedial/ corrective actions. Evaluation makes
sure that the organisational strategy as well as its implementation meets the organisational
objectives (Ovidijus, 2013).
These components are steps that are carried, in chronological order, when creating a new
strategic management plan.

Figure 3: Strategic Management Process (Source: Grant, 2003: 509)

Components of Strategic Management Process

a. Goal- Setting
The purpose of goal- setting is to clarify the vision for your business. Keep in mind during this
process your goals to be detailed, realistic and match the values of your vision. Is it short or long
term?
b. Analysis
Analysis is a key stage because the information gained in this stage will shape the next two
stages. In this stage, gather as much information and data relevant to accomplishing your vision.
c. Strategy Formulation
The first step in forming a strategy is to review the information gleaned from completing the
analysis. Once prioritized, begin formulating the strategy. Because business and economic
situations are fluid, it is critical in this stage to develop alternative approaches that target each
step of the plan. Scenario Planning comes into play for plausible futures.
d. Strategy Implementation
18
 Successful strategy implementation is critical to the success of the business and political venture.
This is the action stage of the strategic management process. Once the funding is in place and the
employees are ready, execute the plan.

e. Evaluation and Control

Strategy evaluation and control actions include performance measurements, consistent review of
internal and external issues and making corrective actions when necessary. Any successful
evaluation of the strategy begins with defining the parameters to be measured.
In responding to the environments in which most companies find themselves, business leaders
experience two major difficulties. First, the outlook for the future is highly uncertain and second,
the capacity for managerial action has been confounded by a conflict between short term and
long term forces (Grant, 2003, pp. 501).

Strategic Development
All organisations have two things in common, a present and a future as change is inevitable and
will occur whether planned or not. The quality of the future depends on the excellence of process
we use to get there. Strategic development is about change.
How management handles the new realities in technology, information flow, culture, global
competition and political accountability is key to success. Strategic development is developing
strategy in relations to the environment and uncertainty using the three elements of strategic
thinking, strategic acting and strategic influence to enhance sustainable competitive advantage
(Ackermann & Eden, 2011).
The four steps of strategic development as shown in the diagram below are:
 Analyze: Look to the market for what opportunities exist and assess which internal capabilities
you have that could take advantage of those opportunities?
 Decide: This is based on the opportunities in the marketplace and your ability to seize those
opportunities, decide where to invest your resources. It is equally important to decide
where not to invest.
 Design: Implementing the strategy decided upon in step 2 will require investment in capabilities.
Internal organisations may need to be formed, partnerships developed, policies written, and
technology updated.

19
 Act: Strategy decisions made in Step 2 and designed in Step 3 flow down to actions in the form
of performance objectives, budgets, and action plans (Hughes & Beatty, 2005).

Figure 4: Strategic Development Template (Source: Hughes & Beatty, 2005: 54).

Analyze Decide
What do you want to do, become or accomplish?
 What opportunities exist
in the market place?
Design
 What capabilities and What do we need to create, refine or buy?
advantages do we have
as organisation?

 What are the guide posts Act

or given provided by our
company? How do we get it done in 6- 12 months?

Strategic development consists of these four components; awareness, planning, development and
results because successful leaders insist on a continuous process of planning and development.
Great strategy doesn’t often come from one great idea but it is more likely that a highly-
developed plan will emerge as an outcome of dedication to a strategy development process
(Ackermann & Eden, 2011). Strategic development is about translating strategic thinking into
action when leaders are ready to act in the face of uncertainty by setting clearer priorities, acting
with short and long term interests in mind and allocating resources that matches the
strategic choices the organisation makes (Ackermann & Eden, 2011).

The element of strategic acting is also closely connected to strategic influencing when people are
influenced within an organisation to act individually and collectively in ways most likely to build
sustainable competitive advantages. Strategic leaders during the strategic development process
should know the path to pursue through their strategic thinking skills and must be decisive by
walking the path despite uncertainties (through the courage of strategic acting) and know how to
engender a strong commitment to the organisation’s strategic direction and learning (through

20
 their strategic influence). Often times, enlisting others in the effort can be a tough challenge but
it is the most critical element of building sustainability (Ackermann & Eden, 2011)

Strategic Planning Framework

Strategic planning starts with development and establishment of the organisation’s mission,
vision and values. Lynch (2012) defines its vision and values as genuine encounters and genuine
experiences in touch with the future.
Strategic Planning Framework represents an action plan that helps management to run business
over a long period of time. This plan also serves as a commitment by the management team to
follow its defined strategic goals, and to support and promote vision and mission of the
organisation (Niles, 2010).
Below are the ten critical steps in creating and implementing strategic planning in organisations:
1. Initiate and agree on a strategic planning process (Bryston & Alston, 1996, pp. 37).
2. Clarify organisational mandates.
3. Identify and understand stakeholders, develop, and refine mission and values, and consider
developing a vision sketch.
4. Assess the environment to identify strengths, weaknesses, opportunities and threats or
challenges.
5. Identify and frame strategic issues.
6. Formulate strategies to manage the issues.
7. Review and adopt the strategic plan.
8. Establish an effective organisational vision for the future.
9. Develop an effective implementation process.
10. Reassess strategies and the entire strategic planning process (Bryston & Alston, 1996, pp. 37).

21
Figure 5: Strategic Planning Framework (Researcher’s Interpretation)

STRATEGY
(Mission, Vision, Culture and Values)

OPERATIONS
INVESTMENT FINANCE
Working Capital
Current Assets requirements Equity
Non- Current Assets Sales Debt

Margin

One key important role for strategic planning systems is to drive corporate performance through
setting performance goals then monitoring results against targets. To be effective, performance
targets need to be consistent with long- term goals, linked to strategy, and relevant to the tasks
and responsibilities of individual organisational members. One tool is the balanced scorecards
(Grant, 2010, pp. 50).

Tips to Improve Strategic Planning

According to Dye & Sibony (2007), it can be a frustrating exercise, but there are ways to increase its
value. Research has shown that formal strategic-planning processes play a significant role in
improving overall satisfaction with strategy development.  They are:

22
 a. Start with the Issues: Begin it by deliberately and thoughtfully identifying and discussing the
strategic issues that will have the greatest impact on future business performance.

Figure 6: Strategic Planning Process (Source: Fabozzi & Peterson, 2003: 934).

Define the Objective:

Maximize owner wealth

Develop a Strategy and a Strategic Plan:

Define Comparative and Competitive
Advantage

Develop the Investment Develop Budgets: Develop the Financing

Strategy: Coordinate the investment Strategy:
Identify and Evaluate plan needs with the financing Identify the needs for financing
Investment Opportunities plan and the means of financing.

Evaluate Performance:
Post- auditing, Compare results with
plans

23
b. Bring together the right people: Strategic conversations will have little impact if they involve
only strategic planners from both the business unit and the corporate levels. One of our core beliefs is
that those who carry out strategy should also develop it. The key strategy conversation should take
place among corporate decision makers, business unit leaders, and people with expertise essential to
the discussion (Dye & Sibony, 2007).
c. Adopt planning cycles to the needs of each business: Managers are justifiably concerned about
the resources and time required to implement an issues- based strategic- planning approach. Indeed,
one merit of a tailored planning cycle is that it builds slack into the strategic- review system, enabling
management to address unforeseen but pressing strategic issues as they arise.
d. Implement a strategic-performance-management system: In the end, many companies fail to
execute the chosen strategy. So, putting in place a system to measure and monitor their progress can
greatly enhance the impact of the planning process. However, most companies believe that their
existing control systems and performance-management processes (including budgets and operating
reviews) are the sole way to monitor progress on strategy. When designed well, strategic-
performance- management systems can give an early warning of problems with strategic initiatives,
whereas financial targets alone at best provide lagging indicators. An effective system enables
management to step in and correct, redirect, or even abandon an initiative that is failing to perform as
expected (Bradford & Duncan, 2007).
e. Integrate human-resources systems into the strategic plan: Simply monitoring the execution
of strategic initiatives is not sufficient; their successful implementation also depends on how managers
are evaluated and compensated.
Finally, some business leaders have found ways to give strategic planning a more valuable role in the
formulation as well as the execution of strategy. Companies that emulate their methods might find
satisfaction instead of frustration at the end of the annual process (Dye & Sibony, 2007).

24
 References
Ackermann, F. & Eden, C. (2011). Making Strategy; Mapping out Strategic Success, 2nd
Edition, Thousand Oaks, SAGE Publications Inc.
Bradford, R. W. & Duncan, B. T. (2000). Simplified Strategic Planning. Chandler House Press.
Bryston, J. M. & Alston, F. K. (1996). Creating and Implementing your Strategic Plan: a
workbook for public and non- profit organisations. Jossey- Bass Publishers.
Burton, R. M., Obel, B., & DeSanctis, G. (2011). Organisational Design, a step-by-step
approach. Cambridge University Press, New York. (2nd Edition).
Dess, G. G., Lumpkin G. T. & Taylor, M. L (2005). The Relationship between strategic
Management, Industrialization and Human Resource Management, McGraw-Hill, NY. 2nd Ed.
New York: http://www.sbaer.uca.edu/publications/strategic_management/pdf/01.pdf.
Dye, R. & Sibony, O. (2007). How to Improve Strategic Planning, McKinsey Quarterly, August
2007.
Grant, R. M. (2010). Contemporary Strategy Advantage. 7th edition. John Wiley & Sons
Limited, West Sussex, UK.
Grant, R. M. (2003). Strategic Planning In a Turbulent Environment: Evidence from the Oil
Majors. “Strategic Management Journal, 24, pp. 491- 518.
Guth, W. D. & MacMillan, L. C. (1986). "Strategy Implementation versus Middle Management
Self-Interest," Strategic Management Journal, 7 (4), pp. 313- 27.
Hill, R. (2008). Strategic Financial Management. pp. 73- 75.
http://www.teliasonera.com/en/careers/students/studentliterature/#bookboon:?
category=df534df7-8299-48e8-891d-a16200feddd5. Accessed: 29 June, 2018.
Hofstede, G., Hofstede, G.J., & Minkov, M. (2010). Cultures and Organizations. (3rd edition).
Software of the Mind, Intercultural Cooperation and its importance for Survival. McGraw-Hill,
New York.

25
Hughes, R. L. & Beatty, K. C. (2005). Becoming a Strategic Leader; your role in your
organisation’s enduring success. John Wiley & Sons Inc. San Francisco, CA (1st edition).
Hultman, K. & Gellermann, B. (2002). Balancing Individual & Organisational Values
John Wiley & Sons, Jossey- Bass/Pfeiffer, pp. 1- 100.
Johnson, G., Scholes, K. & Whittington, R. (2006). “Exploring Corporate Strategy.” Texts and
Cases, (7th Ed): Harlow: Perason Education.
Kaya, C. & Ceylan, B. (2014). Creating a sustainable competitive advantage in organisations.
Ketchen, D. & Short, J. (2013). Mastering Strategic Management.
http://catalog.flatworldknowledge.com/bookhub/3085?e=ketchen_1.0-ch01_s03#
Liddel, B. H. (1967). Strategy. Basic Books.
Losey, M., Meisinger, S. & Ulrich, D. (2005). The Future of Human Resource Management.
John Wiley & Sons Inc., Hoboken, New Jersey.
Lynch, R. (2012). Strategic Management. 6th edition, Pearson Education, Harlow.
Machiavelli, N. (1999). The Prince, (5th Edition); Penguin Book Publishers.
Mintzberg, H. (1994). The Rise and fall of Strategic Planning. Basic Books.
Mintzberg, H. (1984). 5 Ps of Strategy ‘Developing a Better Strategy’
http://www.mindtools.com/pages/article/mintzberg-5ps.htm [2nd July, 2018 @ 12:50pm].
Nag, R., Hambrick, D. C. & Chen, M. J. (2007). "What is strategic management, really?
Inductive derivation of a consensus definition of the field"  Strategic Management
Journal. 28 (9): 935- 955. doi: 10.1002/smj.615. Retrieved July 2, 2018.
Northouse, P. (2009). Leadership Theory & Practice (6th Edition), Sage Publications Inc.
Ovidijus, J. (2013). ‘Strategic Management & Strategic Planning’ strategic management insight
http://www.strategicmanagementinsight.com/topics/strategic-management-planning.html [2nd
July 2018 @ 2: 00pm].
Porter, M. E. (1985). Competitive Strategy. New York: Free Press.
Porter, M. E. (1996). What is Strategy? Harvard Business Review, Nov- Dec.
Tzu, S. (1988). The Art of Strategy: A New Translation of Sun Tzu’s Classic “The Art of War,”
trans. R. L. Wing (New York: Doubleday).

26