Strategic Management

The Nature of Strategy

What is Strategy?
 The Nature of strategy
Almost everyone thinks that they know what strategy is.
However, if you ask the word strategy means to them, their
range of replies is surprisingly varied. To some the term
“strategic” is no more than a synonym for “important”; to
others it may be a plan of action and for a third group it might
be a blueprint for success. More considered replies are likely
to reveal different shades of meaning within this broad range.
To us, strategic management is about envisioning and
realizing the future. Note that this definition requires that
strategy should both provide an idea of the future and
generate the action necessary to realize that idea.
Implementation is part of strategy and not a separate activity.
Strategy from the manager’s point of
view
Managers are responsible for the health of
their enterprises both in the present and in the
future. Strategic management is the part of their
job that relates to the future. Strategic
management is about taking action today to
achieve benefits in the future. The future is
always uncertain so that strategic management
decisions must be made with information that is
always incomplete and often wrong. This is not a
new issue. Peter Drucker (1995:85) put this very
clearly
 Management has no choice but to anticipate
the future, to attempt to mould it and to
balance short-range and long-range goals. It is
not given to mortals to do either of these things
well. But lacking divine guidance, Business
management must make sure that these
difficult responsibilities are not overlooked or
neglected, but taken care of as well as is
humanly possible.
 It is not easy for managers to manage
strategically. Henry Mintzberg (1989) has
observed and most managers will be personally
aware that: “Managers work at an unrelenting
pace and their activities are characterized by
brevity, variety and discontinuity”. Managers
have to manage strategically within this pattern
of work. The objective of strategic management
is to prepare an enterprise for future success, to
conceive and to secure the future of that
enterprise.
 Strategic management requires both thinking
and action. Strategic management only takes
place when action follows thought. Thought on
its own may be intellectually stimulating but it is
not strategic management. There are limits to
the ability of managers to foresee the future, to
understand the significance of changes, to
conceive strategies and to implement startegies
successfully. Managers need to be aware of
these limits but cannot avoid their responsibility
for taking action.
Definitions of Strategy
Many writers have attempted to define strategy. Such
definition that included all the aspects would have to be
very long.
One of the earliest definitions of strategy comes from
the ancient Greek writer Xenophon (Cummings 1993:
134): “Strategy is knowing the business you propose to
carry out” This definition stresses that strategy requires
knowledge of the business, an intention for the future,
and an orientation towards action. This definition also
emphasizes the link between leadership and strategy
formulation. Xenophon saw strategy as a direct
responsibility of those in charge, not as a spectator sport.
 Kenneth Andrews (1971) defined startegy as “ The
pattern of major objectives, purposes or goals and
essential policies or plans for achieving those goals,
stated in such a way as to define what business the
company is in or is to be in and the kind of company it
is or it to be”.
Note that in this definition strategy is concerned
with both purpose and the means by which purpose
will be achieved. It implies that strategy must address
the fundamental nature of the business in the future.
This suggests that strategy will be sensitive to values
and culture as well as to business opportunity. It also
implieas that managers are able and responsible for
making deliberate choices about the future nature and
scope of their business.
 Igor Ansoff (1987:1965) offers a brief
definition: “Strategy is a rule for making
decisions”. Ansoff also distinguish between
policy and strategy. A policy in a general
decision that is always made in the same way
whenever the same circumstances arise. A
strategy applies similar principles but allows
different decisions as the circumstances differ.
 Kenichi Ohmae (1983:92) defines strategy as
: “The way in which a corporation endeavours to
differentiate itself positively from its
competitors, using its relative strengths to
better satisfy customer needs”. This definition
addresses both the competitive aspect of
strategy and the need to build capabilities. It
also explicitly mentions customers and the
satisfaction of their needs as a driver of
strategy.
 More recently and reflecting this perspective
as a practicing management consultant, Michael
de Kare-Silver (1997) suggest that strategy
should have just two elements-future intent
and “sources of advantage”, He is therefore
restating the view that intent and strategy are
inseparable. The word “source of advantage”
has a similar meaning to capability but
emphasizes that capabilities only have value
when they meet the real needs of customers.
 Our own definition of strategy is : “Ideas and
actions to conceive and secure the future”. This
definition highlights the fact that strategy
requires thought about the future but also
effective action to realize the conception. This
definition, though brief, does not imply that
strategy cannot have the many aspects
discussed above.
 It is apparent that definitions of strategy
vary. To understand the reasons for this
variation, it may help to have some
understanding of where the ideas come from.
Thank you and God Bless