Humans have had, and sadly still appear to have, a deeply dis­turb­ing need to settle con­flict using armed war­fare. While stor­ies of the battle abound in prose, poem, song and cinema there is usu­ally only glib allu­sion to the thought and pre­par­a­tion made prior to the slaughter itself. Though pre­med­it­a­tion prior to whole­sale murder is an unsa­voury concept, it is from this con­scious anti­cip­a­tion of bru­tal­ity that the art of strategy was born; to save one­self and one’s friends at the expense of foes.

An often trans­lated and stud­ied treat­ise on strategy is that of a Chinese Gen­eral from around 2600 years ago named Sun Tzu (Wing, 1997). Though this is one of the earli­est known doc­u­mented manu­als on the topic of strategy, it is likely that mil­it­ary strategy pre-dated Sun Tzu. Ori­gin­ally, par­tic­u­larly when applied to the mil­it­ary, the desired out­come of a well executed strategy was to gain advant­age over oth­ers at their expense. As applied to busi­ness in the mod­ern era, strategy is becom­ing more often used to gain com­pet­it­ive advant­age while bene­fit­ing all involved in the value chain. A pos­it­ive out­come may also be gained for one’s com­pet­it­ors as long as sus­tain­able com­pet­it­ive advant­age is main­tained for oneself.

A single defin­i­tion of strategy simply doesn’t exist. With each com­ment­ator on the topic of strategy, there appears to be an accom­pa­ny­ing defin­i­tion. An excel­lent defin­i­tion described in Colin White (2004) by de Wit and Meyer (1998) is “any course of action for achiev­ing and organization’s purpose(s)”. This is an all-encompassing defin­i­tion that includes all of a busi­nesses’ pro­duct­ive activ­ity and it is this defin­i­tion that will be used for the pur­pose of this essay.

Hav­ing provided the gen­eral pur­pose and defin­i­tion of strategy, this essay will describe four approaches that may be taken to mak­ing strategy. Addi­tion­ally, it will be argued that without a strong work­place cul­ture, ele­ments of the four approaches are likely to be used within a single organisation.

Approaches to Stra­tegic Management

Devel­op­ing a strategy is described most com­monly in lit­er­at­ure as being based on the way in which the pro­cess of strategy is developed and the desired out­come of that strategy Richard Whit­ting­ton (2001). The pro­cess of strategy devel­op­ment is either delib­er­ate or emer­gent (or adapt­ive) while the desired out­come is to max­im­ise profit or to achieve mul­tiple pur­poses (plural) Richard Whit­ting­ton (2001).

These form a mat­rix of four basic approaches that may be taken to make a strategy. The four approaches are Clas­sical, Evol­u­tion­ary, Sys­temic and Pro­ces­sual. Each of these will be described in detail.

Clas­sical

The clas­sical approach to strategy mak­ing is the delib­er­ate pro­cess of devel­op­ing a strategy to max­im­ize profit. This approach, though described as clas­sical, was mainly developed and pro­pounded by man­age­ment strategists in the 1960s such as Igor Ansoff and Alfred Sloan (Richard Whit­ting­ton, 2001). Sloan, the former chief of Gen­eral Motors, was cred­ited with much of the organisation’s early suc­cess pre­dom­in­antly due to his approach of delib­er­ate exam­in­a­tion of the internal and external envir­on­ment and then devel­op­ing a strategy to dir­ect resources to meet the company’s long-term goals (Richard Whit­ting­ton, 2001). The long term aim of the clas­sical approach to strategy is clearly to make profit and this is best summed up in Sloan’s own words from his biography;

“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 sat­is­fact­ory, the defi­ciency should be cor­rec­ted or the activ­ity aban­doned.” (Richard Whit­ting­ton, 2001).

This very rational approach has advant­ages where change in mar­kets and the industry move rel­at­ively slowly and where reas­on­able con­fid­ence can be achieved in long-term fin­an­cial mod­el­ing. The clas­sical approach relies on the stra­tegic cap­ab­il­ity being con­cen­trated in the organ­isa­tional leader and his or her abil­ity to suit­ably com­mand the organ­isa­tion. For this reason, par­tic­u­larly due to cog­nit­ive lim­it­a­tions in decision mak­ing by indi­vidu­als, many organ­isa­tions are adopt­ing an approach that, while focus­ing on busi­ness prof­it­ab­il­ity, acknow­ledges the dynamic pro­cesses act­ing upon and within the organisation.

Evol­u­tion­ary

The evol­u­tion­ary approach to strategy is based on the view that the organ­isa­tion is oper­at­ing within an eco­nomic envir­on­ment that is ever chan­ging. The role of strategy in this case is to respond to the envir­on­ment for sur­vival and profit. The main reason that this pro­cess is known as evol­u­tion­ary is that it is sim­ilar to Dar­winian the­ory in bio­logy where only those indi­vidu­als, or in this case strategies, best equiped to sur­vive envir­on­mental or eco­nomic pres­sures do so (Colin White, 2004). An example of this is the strategy of Sony dur­ing the 1980s where they released well over 100 dif­fer­ent ver­sions of their port­able cas­sette player, the Walk­man, and allowed the mar­ket to decide which would sur­vive and which would be removed from the mar­ket through fail­ure (Richard Whit­ting­ton, 2001).

Pro­ces­sual

The pro­ces­sual view of the is that the busi­ness envir­on­ment is messy and largely unpre­dict­able (Richard Whit­ting­ton, 2001). Addi­tion­ally, with this approach, there is an acknow­ledge­ment that decision-makers lack the abil­ity to act with pure reason and that only a few factors affect­ing a decision can be dealt with. This lim­it­a­tion of human cog­ni­tion is known as bounded ration­al­ity (Simon, 1982).

To make sense of the chaos of the world in which the organ­isa­tion oper­ates, man­agers develop mod­els, or pro­cesses, to help make decisions. These mod­els are known to be imper­fect rep­res­ent­a­tions of the com­plic­ated world but the help the strategist to identify and quickly respond to forces act­ing upon the organ­isa­tion. The mod­els that are used for decision-making may be expli­cit and doc­u­mented or cognitive.

Ulti­mately, because there is an accept­ance that the the world is messy and unpre­dict­able, it is accep­ted that max­im­ising profit is not within the con­trol of the strategist and suf­fi­cient profit becomes the goal. To achieve this, there is also a “pre­val­ence of sat­is­ficing in envir­on­ments which are tol­er­ant of under-performance” (Colin White, 2004) where the decision maker “looks for a sat­is­fact­ory, rather than an optimal, altern­at­ive” (Simon, 1982, p295).

Sys­temic

The sys­temic approach is taken by those that under­stand the need to “play by the local rules” (Richard Whit­ting­ton, 2001). The cul­tural con­text is key to the devel­op­ment of the strategy. This may be a func­tion of the way that a fam­ily cul­ture influ­ences a busi­ness or may also be influ­enced by the local cul­tures with dif­fer­ent levels of uncer­tainty avoid­ance, power dis­tance, col­lect­iv­ism, mas­culin­ity (Hofs­tede, 1983) and long-term vs short term ori­ent­a­tion. The sys­temic approach toward strategy is the delib­er­ate devel­op­ment of strategy to meet cul­tural and soci­etal needs while main­tain­ing suf­fi­cient profit.

Inev­it­able co-existence of mul­tiple approaches

In determ­in­ing which approach to strategy-making will be taken within an organ­isa­tion it is import­ant to first under­stand who the strategist or strategists are within the organ­isa­tion. The clas­sical approach com­monly has the organ­isa­tional leader as the source of strategy devel­op­ment and the driver of strategy imple­ment­a­tion. The more mod­ern approach is not only the accept­ance but the goal of enga­ging each indi­vidual within an organ­isa­tion as a strategist.

An organ­isa­tion is not a single entity but is rather made up of numer­ous indi­vidu­als that hold dif­fer­ent views of labour, eco­nom­ics, plan­ning and the organisation’s goals. Though it is the role of the strategists within an organ­isa­tion to align their activ­it­ies to achieve the organ­isa­tions goals, even under optimal con­di­tions this will be incomplete.

It may also be pos­sible that this may not be in the best interests of the organ­isa­tion to have all of the strategists of one mind. While a man­aging dir­ector or pres­id­ent or chief exec­ut­ive may pro­pound to delib­er­ately and meth­od­ic­ally plan a long term strategy to deliver profits to the organ­isa­tion it is the line man­agers that will usu­ally develop decision mak­ing mod­els that will help respond to the chan­ging envir­on­ment. It may also be the case that a work-group is oper­at­ing within a dif­fer­ent soci­ety or cul­ture and though they do delib­er­ately plan but also under­stand that they need to play by local rules. Through­out this, each strategy that devel­ops either suc­ceeds or fails and the strategy of the organ­isa­tion evolves.

Con­clu­sion

It is because an organ­isa­tion has many work­ing within it that opin­ions and approaches will dif­fer towards strategy. Co-existence of mul­tiple approaches is inev­it­able without the devel­op­ment of either an extremely strong organ­isa­tional cul­ture, a human resource mono­cul­ture or extremely pre­script­ive man­age­ment, such as in the armed forces. For this reason it is likely that a single approach will never occur but within an organ­isa­tion it is likely that more than one approach to strategy will be represented.

Regard­less of the approach taken, the judge­ment of suc­cess of a strategy is meas­ured by whether the desired out­comes have been achieved. In examin­ing and using strategy within busi­ness we may con­sider ourselves for­tu­nate that these out­comes require no blood­shed; the ori­ginal reason that strategy was first developed.

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Ref­er­ences

De Wit, B. and Meyer, R. (1994) Strategy: Pro­cess, Con­tent, Con­text,West Pub­lish­ing, New York.

Simon, H. A. (1982) Mod­els of Bounded Ration­al­ity. The MIT Press, Cam­bridge, MA.

Wing, R.L. (1997) The Art of Strategy: The Lead­ing Mod­ern Trans­la­tion of Sun Tzu’s Clas­sic The Art of War. Thorsons.

White, C (2004) Stra­tegic Man­age­ment. Pal­grave Macmillan

Whit­ting­ton, R (2001) What is Strategy and Does it Mat­ter? Cen­gage Learning