What is strategy?
Strategy – yudhaniti, karyaniti, rananiti
Military Origins of Strategy:
- Strategy is a term that comes from the Greek Strategia, meaning “Generalship.” In the military, strategy often refers to manoeuvring troops into position before the enemy is actually engaged. In this sense, strategy refers to the deployment of troops. Once the enemy has been engaged, attention shifts to tactics. Here, the employment of troops is central.
- Military origins of strategy are century old. It seems sensible to begin our examination of strategy with the military view.
- Strategy generally involves setting goals, determining actions and mobilizing resources to execute the actions to achieve the goals,
- A strategy describes how the ends (goals) will be achieved by the means (resources).
- Strategy also refers to the means by which policy is effected, As per “Clauswitz” the war is the continuation of political relations via other means.
- Strategy According to B. H. Liddell Hart: In his book, Strategy, Liddell Hart examines wars and battles from the time of the ancient Greeks through World War II. He concludes that Clausewitz’ definition of strategy as “the art of the employment of battles as a means to gain the object of war” is seriously flawed in that this view of strategy intrudes upon policy and makes battle the only means of achieving strategic ends.
- Wiser definition of strategy could be “the practical adaptation of the means placed at a General’s disposal to the attainment of the object in view.” Thus, military strategy is clearly a means to political ends.
- Concluding his review of wars, policy, strategy and tactics, Liddell Hart arrives at this short definition of strategy: “The art of distributing and applying military means to fulfil the ends of policy.”
For example: American foreign political and defence policy is to lead and to be dominanat powerful nation in the world to achieve politiacal end
Organizational/company concept of strategy
Modern business strategy emerged as a field of study and practice in the 1960s; prior to that time, the words “strategy” and “competition” rarely appeared in the most prominent management literature
- Substitute “resources” for troops and the transfer of the concept to the business world begins to take form.
- A company’s concept of Strategy consists of the competitive moves and business approaches that managers employ to attract and please customers, compete successfully, grow the business, conduct operations and achieve targeted objectives.
Strategy According to George Steiner
- George Steiner, a professor of management and one of the founders of The California Management Review. His book, Strategic Planning, is close to being a bible on the subject. Steiner points out in his notes that there is very little agreement as to the meaning of strategy in the business world.
- Some of the definitions in use to which Steiner pointed include the following:
- Strategy is that which top management does that is of great importance to the organization.
- Strategy refers to basic directional decisions, that is, to purposes and missions.
- Strategy consists of the important actions necessary to realize these directions.
- Strategy answers the question: What should the organization be doing?
- Strategy answers the question: What are the ends we seek and how should we achieve them?
- Alfred D Chandler(1962) : “The determination of basic long-term goals and the adoption of courses of the courses of action and the allocation of resources necessary for carrying out these goals”
- Alfred D Chandler(1984) : “Basically, a strategy is a set of decisions-making rules for the guidance of organisational behaviour”
- Kenneth Andrews(1965) : “The pattern of objectives, purpose, goals, and the major policies and plans for achieving these goals stated in such a way so as to define what business the company is in or is to be and the kind of company it is or to be
- ”Kenneth Andrews (1965) : “Business Strategy is a method of describing the future position of the company, its objectives, purposes, goals, policies, and plans that may be required for guiding the company from its existing position to where it desires to be”.
- Igor Ansoff(1965) : “The common thread among the organisation’s activities and product-markets…that defines the essential nature of business that the organisation was or planned to be in future”
- William F Gleueck(1972) : “A unified, comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved”
- Henry Mintzberg(1987) : “A pattern in a stream of decisions and actions”
- Michael E Porter(1996) : “…developing and communicating the company’s unique position, making trade-offs, and forging fit among activities
- A company’s Strategy consists of the competitive moves and business approaches that managers employ to attract and please customers, compete successfully, grow the business, conduct operations and achieve targeted objectives.
- Definition by Glueck: “Strategy is unified, comprehensive & integrated Plan that relates the Strategic advantages of the firm to the Challenges of the environment and is designed to ensure that basic objectives of the enterprise are achieved through proper implementation process.”
- Another Definition: Strategy is Organisation’s pattern of response to its environment over a period of time to achieve it’s goals, objectives and Mission.
Johnson and Scholes define strategy as follows:
“Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations”.
In other words, strategy is about:
- Where is the business trying to get to in the long-term (direction)
- Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
- How can the business perform better than the competition in those markets? (advantage)?
- What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?
- What external, environmental factors affect the businesses’ ability to compete? (environment)?
- What are the values and expectations of those who have power in and around the business? (stakeholders)
If we sum up all the above definitions, then Strategy is :
- A plan or course of action or a set of decisions rules forming pattern or creating a common thread.
- The pattern or common thread related to the organisation’s activities which move an organisation from its current position to a desired to a desired future stage
- Related to pursuing those activities which move an organisation from its current position to a desired future state,
- Concerned with the resources necessary for implementing a plan or following a course of action and,
- Connected to the strategic positioning of a firm, making trade-offs between its different activities, and creating a fit among these activities.
Essence Of Strategy
Strategy includes the determination and evaluation of alternative paths to an already established Mission and Objectives of enterprise and choosing the alternative to be adapted. Four important aspects of Strategy are:
- Long Term Objectives: It emphasises on long term growth and development. These Objectives give direction for implementing Strategy.
- Competitive Advantages: The external environment is continuously monitored & Strategy is made to have the firm a continuous Competitive Advantage.
- Vector: is a Direction with Force. Series of actions are to be taken & they should have same direction for whole organisation.
- Synergy: Once a series of decisions are taken to accomplish the objectives in same direction, there will be synergy. Synergy can happen due to Competitive Advantages and Growth Vector. The Objectives need be measurable and could be : ROI, Sales Growth Rate
Strategy as Action & Nature of Strategy
Three types of actions are involved in Strategy:
- Determination of Long Term Goals & Objectives.
- Adoption of courses of action.
- Allocation of resources.
- Therefore, Strategy is “Creation of unique & valued position involving a different set of activities. The Company that is strategically positioned performs different activities from rivals or performs similar activities in different ways” – Michael Porter.
Nature of Strategy :
- Strategy is a major course of action through which organisation relates itself to its environment. (External)
- Strategy is blend of internal & external factors. Face opportunities & threats provided by external factors, internal factors are matched with them.
- Strategic actions are different for different situations. Strategy is combination of actions to solve a certain problem to achieve a desirable end.
- Strategy may involve contradictory actions simultaneously or with a gap of time like closing down some operations and expanding some at same time.
- Strategy is future oriented. New situations, which have not arisen in past will require revised Strategic Actions.
- Strategy requires some systems and norms for its efficient adoption in any organisation.
- Strategy provides overall framework for guiding enterprise thinking and action
Strategists – Their Roles & Levels
Board of Directors:-
- Board is an ultimate legal authority of an organisation.
- Board is responsible to owners, share holders, government, controlling agencies, and financial institutes. They get elected and appointed by holding or parent company.
- Board is requires to direct and is involved in reviewing and screening executive decisions in light of their environmental, business and organisational implications.
- Role of Board of Directors is to guide the senior management in setting and accomplishing objectives, reviewing and evaluating organisational performance, and appointing senior executives.
- Board is involved in setting strategic direction, establishing objectives & strategy, monitoring and reviewing achievement
Chief Executive Officer:-
- is responsible for all aspects of strategic management from the formulation to evaluation of strategy.
- CEO plays a pivotal role in setting mission, objectives and goals.
- He formulates and implements strategy and ensures that organisation does not deviate from a predetermined path
- is the person who starts a new business, is a venture capitalist.
- He has to play a proactive role to provide sense of direction, set objectives and formulate strategies.
- He is different from formal system and plays all strategic roles simultaneously.