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Business Strategy
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Business strategy means different things to different people. This entry offers a sub-
stantive discussion of what is meant by “strategy” and “business strategy”; the different
elements of a business strategy; and why top management efforts to craft strategy are
aimed at building a competitive advantage that can be sustained as long as possible.
A business strategy is partly planned and partly reactive, and tends to evolve over time.
The effective crafting or development of strategy, combined with effective strategy exe-
cution, is considered to be effective management. For communication practitioners, it
is often a formal part of their job descriptions to support the achievement of desired,
strategic business outcomes. Many have learned through formal or professional educa-
tion that they need to be part of the team that crafts and shapes the business strategy,
though many C-level/top executives struggle to understand how communication prac-
titioners can best support the business strategy.
A business strategy is commonly viewed, among other things, as a planning docu-
ment that is generated by the business on a regular basis; a process used to generate
a plan; an amorphous concept that describes how the organization will compete and
relate itself among different stakeholders; or a purposive, specified set of actions that
need to be taken in order to accomplish higher order organizational aims.
A popular term that has perennially made “top 10” listings of important business
concepts since the 1980s, business strategy is often misunderstood, badly crafted, and
poorly communicated by communication practitioners and the individuals entrusted
with developing and executing it for their organizations. It is likely that the confusion
is caused mostly by disagreements about the term “strategy,” as the term business is
generally well understood as a concept, discipline, or field of endeavor. Strategy, on the
other hand, has a much shorter scholarly history, is less established, and does not have
the clarity of scope that business entails.
Strategic matters are a key focus of this encyclopedia, and indeed the word “strategic”
shows up in its title. The Greek root origin of the word “strategy” is the word “strategia,”
which essentially means the roles of the leader or the commander’s intent in combat-
ive situations. Common, contemporary dictionary definitions of the term offer words
like approach, deliberate actions, plan, policy, scheme, stratagem, or tactics. These ideas
continue to be associated with today’s use and applications of business strategy and are
taught in most business school instruction to the future business leaders who will be
responsible for their organization’s strategy.
For the purposes of this encyclopedia entry, an organization’s business strategy rep-
resents executive management’s plan for running the business and conducting operations.
The International Encyclopedia of Strategic Communication. Robert L. Heath and Winni Johansen (Editors-in-Chief),
Jesper Falkheimer, Kirk Hallahan, Juliana J. C. Raupp, and Benita Steyn (Associate Editors).
© 2018 John Wiley & Sons, Inc. Published 2018 by John Wiley & Sons, Inc.
DOI: 10.1002/9781119010722.iesc0015
2 B U S I N E S S S T R AT E G Y
If all, or a substantial majority, of the preceding elements are present, the greater the
likelihood that the decision is indeed strategic; nevertheless, just because an action,
choice, or decision is not strategic does not make it unimportant or insignificant.
Indeed, the cumulative effects of many nonstrategic decisions help to determine
the performance of an enterprise in a marketplace, particularly in the shorter term.
B U S I N E S S S T R AT E G Y 3
Decisions such as seasonal price discounting, direct mail campaigns, product enhance-
ments, label design, advertising channels, promotional vehicles, and/or ambush
marketing are all nonstrategic. They have a comparatively short-term lifespan and
shorter-term performance effects or consequences, compared ceteris paribus (all other
things remaining constant) with strategic decisions/actions.
The key to the identification of a strategic decision is that they are the ones typically
made by senior executives, managing directors, and/or the senior management
team—those individuals working within an organization’s so-called “C-suite.” Con-
sequently, the business organization that gets the strategic decisions “right” has a
greater chance of also getting the nonstrategic decisions right. For communication
practitioners, it is not only important that the organization gets the strategic decisions
right, but also that all the organizational members responsible for understanding the
strategy and translating it into day-to-day actions, operations, and tactics needed to
achieve it, have a clear sense of what they need to be doing (aided and supported by
effective communication).
It should also be recognized that business strategy can be more, or less, important to
organizations depending on their circumstances or contexts. One of the key aspects
of choosing effective strategies depends on the industry context the business organiza-
tion competes within. Whether a business chooses to compete in a fragmented versus
concentrated industry; local versus global industry; generic versus specialized indus-
try; and so forth, will result in different actions, choices, or decisions. For example,
an organization that faces lots of new rivals who are entering their industries or mar-
kets will derive greater value from an effective, unique business strategy. Contrast this
with an organization that faces minimal to no business competition and little change of
customer preferences over time.
In general, organizations that exist in high VUCA (i.e., variability, uncertainty,
complexity, and ambiguity) contexts or environments will benefit more from having
an effective business strategy than organizations which are experiencing lower levels
of the VUCA factors. There are plentiful opportunities to craft a strategy that aligns
with, or tightly fits, an organization’s own particular situation, and that can be seen as
either valuably unique or discernibly different from competitors’ strategies. However,
just crafting a coherent strategy does not necessarily mean it will be an effective one.
An effective strategy that is well executed is nearly always a sign of effective executive
management. In theory at least, organizations with effective executive management
should outperform organizations with less effective executive management across a
wide range of performance dimensions—most important among those the customer,
financial, industry, market, and stakeholder-related bases upon which they compete
with rival organizations.
The temporal dimension of business strategy in its larger context is also important.
Bruce Henderson, the founder of the famed business strategy consultancy the Boston
Consulting Group, wrote in 1981 that strategy depends upon the ability to foresee future
4 B U S I N E S S S T R AT E G Y
• The business strategy never reaches fruition, is constantly being challenged inter-
nally, and fails to gel as a statement of the leadership’s intent.
• The business strategy is unsatisfactorily articulated by the organization’s leadership.
• The organization’s leadership could not actually agree or reach consensus on the
business strategy, and multiple versions exist in practice, if not in the plan itself.
• The communication practitioners were never, or are not, part of the processes
used to develop the business strategy. Consequently, they are asked in a second-
B U S I N E S S S T R AT E G Y 5
practitioners are compensated similarly. The best ones have earned the trust of their col-
leagues in the C-suite, and their value is recognized by earning lucrative compensation
among the organization’s other staff professionals, recognition as a valued contributor,
and the trust of their executives.
At the business level, the critical strategy question to be answered is how the orga-
nization should compete in a given business or industry—in other words, how it
will win. “Winning” is the ultimate dependent variable in business strategy, and
the range of independent variables encompass the many strategic choices made by
executives within the strategy process. The central focus of any strategy is the actions,
choices, plans, and decisions in the market place that executives take to improve
the company’s financial and market performance, to strengthen its competitive
position over time, and to gain and sustain a competitive edge over its rivals. Key
choices and decisions made at the business level of strategy are usually characterized
by:
organize events to help stakeholders gain more awareness of the organization and its
products/services; monitor and manage web communication with various stakehold-
ers; or manage internal communication with employees to ensure they appropriately
grasp their roles in, and ability to contribute to, the successful execution of the strategy
and assist in the achievement of desired outcomes (i.e., goals). All of these communica-
tion activities must reinforce and help develop better understanding of harmonization
and/or alignment of different groups within the organization, or between the organiza-
tion and its external audiences.
At the functional level, strategy refers to the plan developed for how to strengthen the
organization’s functions, including ones like communication, engineering, production,
or sales. Functional-level strategy also concerns how the organization will coordinate
these different functions. It also refers to how it will manage resources, processes, and
people in order to support the chosen business strategy by creating and sustaining what
are known as core competencies.
A competence is the ability, as measured by possession of required skills, knowledge,
qualifications, or capacity, of an individual to successfully perform a designated activ-
ity. For instance, strategic communication can be a competency. Prahalad and Hamel
(1990) described a core competence as going deeper and beyond a basic competence
in that these embody an organization’s collective learning and allow it to coordinate
diverse skills and integrate multiple abilities or resources into a wider variety of mar-
kets. Core competencies are seen as the central strengths or strategic advantages of the
business, substantially contribute to the benefits a company offers its customers, and
allow it to compete successfully. If those core competencies are hard for rivals to imi-
tate or acquire, they are known as distinctive competencies, and are ones upon which
businesses can lengthen their wielding of competitive advantage.
Communication practitioners interact with functional-level strategy in a number
of ways. First, and most directly, it is their role and responsibility to make sure that
the organization’s communication functions, its capabilities and resources are used
effectively in supporting its higher-level strategies. Second, strategic communication
practitioners provide and leverage unique communication resources and support to
those functions of the business organization that are central to its core competencies.
Third, strategic communication practitioners identify and fulfill the communication
needs and priorities of the other organizational functions, making sure that the
communication they engage with meets demonstrated standards and levels of practice
that enable these functions to be as effective as they are able to be.
Like organizations and the environments that encompass them, business strategy
constantly evolves, as does and should the communication dynamically associated
with supporting and making it effective. Tomorrow’s communication practitioners will
require newer, evolved, and extended sets of competencies to get a seat at, or to remain
at, the boardroom table. These new competencies may not look anything like the
contemporary ones being used today. Surely, the societal acclimation to, and uptake of,
B U S I N E S S S T R AT E G Y 9
new information and communication technologies alone will compel the development
of new ones, and possibly in ways that are difficult for business strategists or communi-
cation practitioners to even fathom in their present VUCA-filled environments. They
will likely have to acquire them through experiencing the challenges that occur in that
cauldron that can be today and tomorrow’s challenging communication practice and
experience, and they will need to be quick learners, just like their organizations will
need to be if their business strategies are going to be successful.
References
Carroll, A., & Buchholtz, A. (2015). Business and society: Ethics, sustainability and stakeholder
management (9th ed.). Stamford, CT: Cengage Learning.
Holzer, B. (2007). Turning stakeseekers into stakeholders. Business & Society, 47(1), 50–67.
Porter, M. (1979). How competitive forces shape strategy. Harvard Business Review, 57
(March–April), 137–145.
Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business
Review, May, 79–91.
Further reading
Hamel, G., & Prahalad, C. K. (1994). Competing for the future. Cambridge, MA: Harvard Business
Review Press.
Lafley, A., & Martin, R. (2013). Playing to win: How strategy really works. Cambridge, MA:
Harvard Business Review Press.
Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. J. III. (2015). Crafting and executing
strategy: The quest for competitive advantage. Concepts and cases (20th ed.). New York, NY:
McGraw-Hill Education.
Craig S. Fleisher, PhD, is the Chief Learning Officer at the strategy consultancy Aurora
WDC, Madison, Wisconsin. A former dean, university research chair holder, and
professor at several North American universities, he holds graduate faculty status in
the EMScom, Universita della Svizzera Italiana (Switzerland), and Tampere University
of Technology, Finland. Author of 14 books and over 150 scholarly papers, he is a life
member of the International Association of Business Communicators, was president of
a Canadian public affairs association, a U.S. foundation, and an international strategy
association. Today, he speaks around the globe on strategy topics and advises dozens
of the world’s leading brands across numerous industries.