Defining Strategy (u1s3p15)

Today I have been...

Thinking about the definition of strategy, particularly the following questions:-

• What are some definitions of strategy?
• What are the nature of strategic issues?

 Why?

Required Reading.

So What?

Definitions

Chandler's "planning" definition of strategy (see http://mbastudier.blogspot.com/2010/10/planning-approach-to-strategy-reader-p1.html ) is

the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for those goals (1962:13) - Chandler on Strategy. Reader p2.

Andrews said

 every business organisation, every sub-unit of organisation, and even every individual ought to have a clearly defined set of purposes or goals which keeps it moving in a deliberately chosen direction and prevents it drifting in undesired directions. (1971:23) Andrews, Reader p3

..which as I pointed out in that blog post leads me to think of the Pyramid of Purpose as a way of achieving that. Henderson's definition is similar (u1s3p16)

a process of analysis which is designed to achieve the competitive advantage of one organisation over another.

I really like Porter's definition, which mentions competitive advantage:-

a process of analysis which is designed to achieve the competitive advantage of one organisation over another in the long term

The very notion of competitive advantage is different, it is about offering a unique value proposition using an appropriate mix of activities/resources.

Common themes:

• long-termism
• goals and objectives
• directing resources to some activities rather than others based around an analysis of which are likely to help achieve those long term goals and objectives
• Analysis also includes determination of the objectives themselves
• Ways to allocate resources
• Some orgs do this better or worse than others

Strategic Issues

u1s3p16-17

What is the relative potential of an organisation's business units, considering them as areas for future investment?

How can we achieve necessary levels of economies of scale? Organisational Learning? Innovation? if we wish to exceed the levels of rival organisations

Which of the organisation's resources & capabilities are likely to need to change over time as environmental factors dictate? What about strategies themselves?

How are we to build and manage complex resource clusters?

How do we determine appropriate shape, size, purpose of the organisation over time? What changes in structure and processes may be necessary?

Where are the opportunities for co-operation and outsourcing?

The three common themes here are that they are all

1. important
2. involve significant resource commitments
3. not easily reversible

Grant says these are the defining characteristics of strategic decisions. 



How will I use it?

By remembering that strategic management helps managers to identify and co-ordinate internal resources, structure, culture and operating procedures within the context of the external environment over time, to help the organisation achieve its objectives.

Strategic thinkers are able to holistically consider these components and create their own integrated perspective. Henderson says they 'have the imagination to forsee alternative actions and the logic to analyse their consequences'.
 u1s3p17