Strategic Management: Formulation and Implementation

What Is Strategy

Researchers and practitioners have used the term strategy freely for other two decades. No controversy surrounds the question of its existence; no debate has arisen regarding the nature of its anchoring concepts. However, virtually everyone writing on strategy agrees that no consensus on its exists.

Strategy: Areas Of Disagreement

Peter Drucker (1954) was among the first to address the strategy issue. To him, an organization's strategy was the answer to the dual questions:

After Drucker's initial statement, little attention was given to thew concept of strategy in management literature until Alfred Chandler (1962). Chandler stated a strategy 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 carrying out these goals."

This definition did not differentiate between the processes used to formulate strategy and the concept itself.

The first two authors to focus explicitly and exclusively on the concept of strategy and the processes by which it should be developed were Kenneth Andrews (1965 , 1971) and Igor Ansoff (1965). Andrews combined both Drucker's and Chandler's ideas in his definition of strategy. For him:

"... strategy is the pattern of objectives, purposes or goals and major policies and plans for achieving these goals, stated in such way as to define what business the company is in or is to be in and the kind of company it is or is to be."

Ansoff, by contrast, viewed strategy as the "common thread" among an organization's activities and product/markets that defined the essential nature of the business that the organization was in and planned to be in the future.

Andrews' and Ansoff's discussions of strategy and the strategy formulation process differed on three major points:

  1. The breadth of the concept of strategy. Here, the question was whether the concept included both tends- goals and objectives- an organization wishes to achieve and the means that will be used to achieve them (Andrews' view) or wether it included only the means (Ansoff's view).
  2. The components, if any, of strategy. Here the question is wether the narrow concept of strategy has components (Ansoff says: yes; Andrews: no), and, if so, what they are.
  3. The inclusiveness of the strategy formulation process. Here the questions is whether goal setting is part the strategy formulation process (Andrews says it is) or whether it is a separate process (Ansoff's view).

Numerous other author have written on the topic, including Cannon (1968), Steiner (1969), Katz (1970), Ackoff (1970), Newman and Logan (1971), Glueck (1976), Steiner and Miner (1977), Hofer and Schendel (1978) and Weick (1983), but there is still major disagreement on the three point discussed above.

For example, Hofer and Schendel adopt the narrow concept of strategy and consider goal setting and strategy formulation to be two distinct, although interrelated, processes. They define an organization's strategy as

"... the fundamental pattern of present and planned resources deployments and environmental interactions that indicates how the organization will achieve its objectives."