What Can the History and Origins of Strategy Tells Us about How It Is Conceived of and Practiced - Coursework Example

What can the history and origins of strategy tells us about how it is conceived of and practiced today? Contents Contents 2 Introduction 3 Discussion 4 Section 1: The origin and evolution of strategy 4 Section 2: Theories of strategy 7 Section 3: Role of strategy in the current business world 10 Conclusion 12 References 14 Introduction The concept of strategy has emerged from the arena of military studies and has later been adapted in business due to the multiple uses of strategy found in business organizations. The adoption of strategies in businesses was a complex process because the ways of functioning of the military domain and the management and business domains are much distinct. The strategies in businesses have to be adapted and formulated in a more modest way as compared to the primary evolution area of strategy in the military studies. The main aim of business strategies is to decrease the gaps between tactics and policies within an organization. Strategies coupled with the tactics and resources in a company helps to achieve the ends or business objectives through the optimal use and employment of the available means or resources and capabilities in a business. The aim of this paper is to study the present role of strategy in the modern world through a review of the evolution of strategy over eyras, the concepts of strategy used in various areas of business and management, the views of the scholars and practitioners regarding the structure, components and use of strategies and the particular aspects that have influenced the ways in which strategy is practiced and conceived in the present business world. For this purpose, the various definitions and theories of strategy are reviewed and evaluated from various dimensions. The legacies of the different dimensions and evaluation of strategy as a concept are studied and the discussions regarding how these dimensions of strategy have helped or hindered the form and use of strategy in the present day scenario are presented. The main aim of the paper is to study the concepts of tactics, policy, ends and other terms related to strategy to understand how the origin of strategy has affected the importance and role of strategy in different types of organizations and industries,. The discussion part of the report is divided into three main sections. In the first section, the origin and evolution of strategy is studied followed by a discussion of the structures and theories of strategy as postulated by different scholars in section 2. The third section comprises of the view of how strategy is perceived as an important process and practice for the mangers of domestic, global and transnational businesses. The report is suitably concluded through the summarization of the argument in the different sections and by articulating the final finding of the paper regarding the links between the origin and legacy of strategy and the ways in which strategy is perceived today. Discussion Section 1: The origin and evolution of strategy Strategy refers to a high level of planning which is implemented with the aim of achieving one or multiple goals and objectives under uncertain scenarios. The term strategy was initially termed in the 6Th Century C. E. as a sense of an “art of the general” in which several subsets including logistics, tactics and planning are used. The term was first used as per the terminologies in East Rome. Later, in the 18th century, the word strategy was translated into the vernacular languages common in the Western society. Since then, the word strategy has emerged on to denote the comprehensive methods of trying to pursue distinct objectives and ends through the employment for resources and planning systems. Strategy in the corporate world refers to the formulation of actions that can be implemented with the aim of the management of businesses. Strategy in the business world is considered to be highly important because the capabilities and resources available within an organization or an industry are limited in terms of quantity. As such, the employment of the resources and capabilities should be done in a high end planned manner so that the dearth of resources is not faced by any organization or industry and so that the optimum use of different kinds of resources can be done while extracting the maximum value from these resources. A strategy generally includes the setting of goals, the mobilization of the resources and capabilities for the execution of the desired actions and the determination of actions for the achievement of goals. The strategies are also employed for describing how the objectives and goals can be attained through the use of the means or resources. In an organization, the development of strategies are generally the tasks and responsibilities of the senior management while the lower level of managers and employees have the duties of employing the suitable resources and capabilities for the implementation of the strategies as devised by the management of the organization. The strategies from the perspective of business or corporate strategies can be formulated as the patterns of activities that the organization adapts to in response the external environmental factors which are influencing the business in the present situations or are likely to influence the business in the future. Strategies generally include distinct activities like strategic thinking and strategic planning which are developed with the intention of delivering value for the organization in question. A good strategy is expected to have a well defined and underlined structure that is commonly known as kernel. As per Professor Richard P. Rumelt (2011), strategy can be described as a type of approach for problem solving through the formulation of a structured doctrine. The kernel would include three main parts. These are explained as follows: The diagnosis part which is aimed a defining or explaining the nature of the challenges and issues that should be addressed by the formulated strategy The guiding policy part which aims at developing the steps to deal with these challenges and issues and The coherent actions development part, in which the suitable actions are designed, prioritized and interlinked on the basis of the guiding policy for the strategy development (Rumelt, 2011). As per another theory of strategy, there are three elements or parts of a strategy which are premeditation, anticipation of the behaviours of the entities related to the business like the competitors, business partners and stakeholder groups and the objective oriented and purposeful formulation of suitable coherent actions that would help to solve the issues or problems faced by the organization. According to Rumelt (2011), strategy is a way of solving a problem by considering the tradeoffs between the different elements related to the design and implementation of strategy as designed. There are two main stages involved in the concept of strategy which are the formulation of strategy and the implementation of strategy. The formulation phase of strategy includes the analysis of the environmental conditions or the external business situations, diagnosing the current and future challenges and issues associated to the business and the development of an appropriate guiding policy for the strategy. The formulation phase of strategy includes major activities such as strategic thinking and strategic planning. The implementation phase of strategy involves the practical persuasion of the action plans as developed on the basis of the guideline policy for the organization for the purpose of attaining the objectives as established in the guiding policy of the strategy. The basic requirements of strategy include multidimensional factors like the development of extensive knowledge regarding the internal structure and composition for the business and the condition of the environment, competitors and markets of the business, the ability of the strategists to examine and analyze this knowledge on an interactive and dynamic platform and the development of suitable logic and imagination for making the most appropriate choice between the multiple alternatives available for the formulation and implementation of strategies in a business (Heuser, 2010). Strategy is considered to be valuable because there are finite resources available in an organization and there are a number of uncertainties related to the assessment of the intentions and capabilities of the adversaries of a business. Additionally, the uncertainties related to the control of the strategy initiative, the irreversible employment and commitment of capabilities and resources, the necessity of collaborating and coordinating different actions over distance and time and the continuously shifting perceptions of the competing companies regarding each other act as other challenges in strategy development and implementation. Section 2: Theories of strategy The management theory of strategy has been formulated by Michael E. Porter in 1980. According to this theory, the essence of designing competitive strategies by a company is directly linked to the external environment of the company. As per this theory , strategy is a broad plan or formula that is used by the managers for analyzing how a company is going to develop its goals, compete with its adversaries and adopt the necessary course of action, development of policies and the employment and optimal allocation of resources which are required for achieving these goals. This theory also defines strategy as a process of combining the goals or ends of a company for which the company is striving and the policies or means by which the company is seeking to attain these goals. The management theory of business strategy was earlier postulated by Alfred Chandler according to which, strategy is the plan which involves the determination of the long term objectives of an enterprise and the design of the course of action and the use of means that can be done for carrying out the action plan for the attainment of the pre defined goals (Whittington, 2012). As per the definitions of Henry Mintzberg, strategy is a pattern of linking used in a stream of decisions. Most of the theories of strategy have defined it as a form of planning. However, the Mintzberg’s theory of strategy is different with describing strategy as a process or practice rather than a mere plan. Other scholars like Max McKeon have defined strategy as a human attempt to shape the future through the achievement of desirable means or results by the use for the available means or resources. According to the view of Dr. Vladimir Kvint, strategy can be defined as a well planned system for identifying, formulating and designing a doctrine that can be used for ensuring the long term success if the doctrine is followed properly (Freedman, 2013). Henry Mintzberg has given five different definitions of strategy in his work presented in 1998. These include: The concept of strategy as a plan in which strategy is seen as a directed course of activities and actions that are intended to achieve a pre defined set of goals. This is in similar lines with the concept of strategic planning. The concept of strategy as a pattern in which strategy is seen as a consistent patterns of trends and past behaviours that are realized over time and are not intended or planned in nature. In case the realized pattern of strategy remains different from the intent pattern of strategy, then this kind of strategy is referred to as emergent strategy. The concept of strategy as a position refers to the definition that strategies are primarily determined by the consideration of the external factors that affect the functions of an organization. These may include locating brands, studying competitive factors and innovating and differentiating products and analyzing the market on the basis of the conceptual framework of the different internal and external stakeholder groups of a company. The definition of strategy as a ploy refers to the use of a plan to specifically manoeuvre the business actions with the aim of cutting out competition for the business. The definition of strategy as a perspective says that the execution of a strategy is based on the particular theories of bushiness and is usually developed as the natural extension of the ideological or philosophic perspectives of an organization or the structural and working norms of an organization. The theory of strategy as used in the modern corporate world refers to the idea that strategy is the process of integrating different kinds of functional elements or inputs within a business from different functional units with the aim of deploying and using these inputs for the improvement and up gradation of the organization so that continuous response to the changes in the external and internal environments of the business can be made (Figure 1). Figure 1: Strategy as a process of integrating the inputs from all the functional disciplines.\ (Source: Ronda-Pupo and Guerras-Martin, 2012) Section 3: Role of strategy in the current business world The role of strategy is highly profound in the current competitive business world. The strategies are continuously being updated by the managers with the aim of developing competitive advantage and creating success and sustainability in the dynamic and globally integrated business environment. Business strategies are defined as business planning which are implemented over a long time period, which is usually a period ranging from 3 to 5 years or more. A corporate strategy on the other hand is a more significant process which involves the use of major decisions and the employment of resources in the critical areas of the business to meet the corporate objectives while adhering to the core philosophies of the organization. The strategies usually differ according to the industry and scale of operations and the scope of the organization’s functions in the respective industry (The Economist, 2012). There are two main categories of business strategies that can be identified in the management of the business activities. These include the generic strategies and the competitive strategies. The main kinds of generic strategies that an organization can use include growth strategies, internationalization or globalization strategies, retrenchment or cost cutting strategies and expansion strategies that can be pursued by a company to ensure the creation of higher competitive advantage and success. The creative strategies are equally significant for surviving in the globalized corporate world. The competitive strategies are aimed at improving the business by keeping in mind the aim of the company to perform better than its rival companies. The main focus of competitive strategies is on the development of ways to cut out the rival companies and gaining competitive advantage by developing unique ideas rather than copying the ideas or strategies used by the competing companies (Knights and Morgan, 1990). There are two main avenues in which a company can use competitive strategies. These are by the sale of goods and services at competitive prices as compared to the rival companies and by differentiating the products and services of the company from the rival companies. Also, the competitive strategies include the achievement of economies of scale which enables the firms to extract advantage by pursuing higher volumes of products and output by enabling the companies to spread the expenses throughout the whole volume of products and services produced by the firm (Schwartz, 2000). Strategic management and strategic thinking are the formal expressions of the use of strategy in the organizations. Strategic management has become critical for the development of an organization because it helps to align the vision and mission of the organization with operational capabilities of the organization. The main aim of strategic management is to develop the relationships between the mission and the overall vision of the company with the strategies used by the company. Also, strategic management aims to integrate and coordinate the functional activities of a business with the aim of achieving the long term business and corporate objectives. The main goal of strategic planning and strategic management is to develop suitable strategies and use them as processes and practices by compiling and disseminating the vision, mission and corporate philosophies pertaining to the enterprise. The strategies are formulated and used by the top level of management in a company and are authorized by the board of directors so as to make sure that the developed strategies are in line with the main working principle of the company and with the expectations and requirements of the stakeholder groups of the company. Conclusion Strategy has been found out to be highly significant and beneficial for driving value for a business. The role of strategy has evolved over the years of its existence in which strategy has evolved significantly to become a cultural approach and process from being a plan of action. Today, strategies are derived by all types of businesses with the aim of meeting a number business and corporate objectives, all of which are directly or indirectly related to a very critical component of the management of organizations which is the maximization of stakeholder values and satisfaction of the interests and demands of the stakeholder groups of a company. The implications of different types of selected strategies are essentially considered in the current scenario which was not done in the initial stages of the emergence of strategy as a business and management concept. Today, strategy is perceived as a high level of responsibly included in the job roles of the top managers which hint at the increasing importance of the concept as a main source of survival and competitive advantage creation. The achievement of high levels of alignment as well as consistency in strategic management and planning with respect to both the internal and the external environment of the business has emerged as a pre requisite for functioning effectively and efficiently in the current business world by enabling the company to mitigate the challenges and tap in the opportunities in a more prompt manner. Thus, in the present day scenario, strategy can be more appropriately defined as a situational activity and a process rather than a mere plan. The evolution of strategy has shaped the ways in which strategy is employed and formulated by the managers in the different organizations. The idea that strategy is integral for creating competitive advantage and that strategies should be used as continuous processes rather than one time plans, have made it necessary for the organizations to embed the strategic processes in the context and culture of the organization. The construction of the strategies are ideally distributed among different entities and departments within the organization with the aim of integrating the divergent interests and goals to develop a common course of action for the business for the achievement of the pre defined goals and objectives of the business. Strategy is conceived to be a more distributed activity in the current management aspects because of the inherent nature, structure and components of the concept. References Freedman, L. 2013. Strategy: A History.  London: Stamford. Heuser, B. 2010. The Evolution of Strategy. Cambridge: Cambridge University Press. Knights, D. & Morgan, G. 1990. The Concept of Strategy in Sociology: A Note of Dissent. Sociology. Vol.24 (1), p. 475 Ronda-Pupo, G. A. & Guerras-Martin, L. A. 2012. Dynamics of the Evolution of the Strategy Concept, 1962–2008: A Co-word Analysis. Strategic Management Journal. Vol. 33(2), pp. 162–188. Rumelt, R. 2011. Good Strategy/Bad Strategy: the Difference and Why it Matters. London: Profile Books. Schwartz, M. 2000. Why Ethical Codes Constitute an Unconscionable Regression. Journal of Business Ethics. Vol. 23(2), pp. 173-184. The Economist. 2012. The Rise of State Capitalism: The Visible Hand. Special Report, pp.3–5. Whittington, R. 2012. Big Strategy/Small Strategy. Strategic Organization. Vol.10 (3), pp. 263– 268. Read More