What is Strategy?

Process and Content

History of Strategy?

Rooted in the Military

Originated in business with the emergence of the business schools
(Wharton and Harvard)
First known as Business Policy

Real research in the area of strategic management only really began to

take shape in the 1970s
Technically economics is the grounding for strategic management theory

Used as a capstone course to bring business functions together

Had little grounding in its own theory

Rigid structure of neoclassical economics did not serve empirical evidence of

firm performance well which lead to other disciplines such as sociology,
Pyschology, political sceince, and institutional theory as alternative
explanations for strategy.
Relaxation of the the rigidities in economics in the 1980s has put economics
back in the forefront as a solid theoretical foundation for strategy

History leads to a very young field of research with little in the way of
accepted principles and theories

Purpose of Strategy?
What is the ultimate goal of strategy
Maximize shareholder value
Monopoly power
Bigger can be better
Profits above average
Success but what is success?

for a firm?

Staying in business/survival

Does strategy imply or require exploitation of other?

Tactics
Defn

How do we position ourselves to achieve sustainable

above average profits in the long run

What is Strategy?

Hierarchical Definition

What is it?

Strengths

Part of a 4 stage model

Defines how you achieve mission/objectives
Plan write it down/implement/achieve objectives
Specific goals
Less abstract
Provides structure
Context to take great ideas to action
Pushes you toward implementation attention to resource allocation

Weaknesses

Excludes external environment

More static than dynamic
Less flexibility

What is Strategy?
Eclectic
What

Definition

is it?

Multiple

aspects plan, ploy (tactics), pattern,

perspective/perception (how you see yourself),
position

Strengths

Weaknesses

What is Strategy?
Matching

What is it?

Definition

Take a look at threats/opportunities and define strategies

to take advantage of threats and minimize weaknesses

Strengths
Not just considering inside firm, also looking at
environment
Makes you look at your strengths/weaknesses
Effective at helping make decisions

Weaknesses
Assumes firms can predict environment
Leaves a void of what to do about SWOT

Deliberate versus Emergent Strategies

In
t
St end
ra ed
te
gy

Del
iber
ate

Unrealized
Strategy

S t ra

tegy

Realized
Strategy

Sustained
Superior
Performance

Emergent Strategy
Adapted from: Mintzberg, H. The Strategy Concept I: Five Ps for Strategy California Management Review. Volume 30
Number1, Fall 1987.

Vision and Mission

External Analysis
Opportunities and Threats

Strategic Choice
SWOT

Internal Analysis
Strengths and Weaknesses

Business Strategy
Strategy Implementation/Tactics

Organizational
Structure

Feedback

Succession
Planning

Designing Control
Systems

Where Are We Headed?

Not

focused on business strategy research

Theory development
Empirical testing of Theory

Application

of Strategy and Strategic

Management Process to Decision-making
How Mike, Allan, and others use strategy
concepts to help firms improve decision-making
Expect you to do some reading on the theory to
help with background as we explore application
of the concepts