Concept of Strategy

• Design School - This school of thought developed in late 1950s and 1960s, Selznick (1957) and Andrews (1965) perceived strategy formation as a process of conception. This school of thought looks at strategy as a unique plan. The chief executive officer creates and leads the strategy formulation process, which is simple and informal, based on judgement and thinking.
• Planning School - This school developed in late 1960s, Ansoff (1965) mainly contributed to this school and explained strategy formation as a formal process, wherein strategy is divided into smaller sub-strategies and programs. The lead role in the strategy is played by the planners. The process strategy formation is formal and deliberate.
• Positioning School - In late 1970s and 1980s, Schendel and Hatten (1970s) and Porter (1980s) formed positioning school. They considered strategy as the organisation’s planned generic positions chosen by analysing competition and industry in which the organisation operates. The strategy formation is done by the analysts. The process of strategy formulation is analytical, systematic and deliberate.
• The Entrepreneurial School – This school of thought developed in 1950s with the contribution of Schumpeter (1950s), Cole (1959) and several other authors who considered strategy formation as a visionary process. This school viewed strategy as a result of personal and unique perspective often aimed at the creation of a niche. The strategies are formulated by the entrepreneur or leader and the process of strategy formation is instinctive, far-sighted and largely deliberate.
• The Cognitive School – In 1940s and 1950s this school regarded strategy as an individual concept, a result the mental perspective. The strategy formation is done by the thinker-philosopher. Simon (1947, 1957) and March and Simon (1958) contributed to the cognitive school and regarded strategy formation is mental and emergent process.
• The Learning School – Emerging from 1950s through 1990s, this school considered strategy formation as an emergent process. Strategy is seen as a unique pattern and the process of strategy formation is new, informal and unorganized. The strategy formation is done by learner within the organisation.
• The Power School – Developed during 1970s and 1980s, this school regarded strategy formulation as a negotiation process, a political and cooperative process. The main task of strategy formation is performed by anyone in power (micro level) and the whole organisation (macro level). This process of strategy formation is chaotic, may lead to conflict, aggression and lack of cooperation
• The Cultural School – Rhenman and Normann (late 1960s) mainly contributed to this school and perceived strategy formation as a collective process. Here, strategy is considered as a unique and collective perspective. Strategy formulation is done by collectivism displayed within the organisation and the process of strategy formation is ideological, constrained, collective and deliberate.
• The Environmental School – This school developed mainly in 1960s and 1970s, and regards strategy formation as a reactive process. This school regards strategy as something generic, occupying specific positions or niche in relation to the environment. Strategy formulation is passive, imposed and emergent; environment is regarded as an entity and plays a major role in strategy formation.
• The Configuration School – This school emerged in 1960s and 1970s. Strategy as a transformation process; that matches any process discussed under the nine schools of thought. The process of strategy formation is integrative and sequential. Additionally, it could also incorporate other elements pointed out under the nine schools of thought. Strategic management as a broader concept of management, considers all the managerial problems, issues, the processes of solving them and also many other variables that operate in a problem-solving environment.
• Strategic management is like captaining a ship. It's the big-picture thinking about where you want your organization to go and how to get there. This involves setting long-term goals, figuring out your strengths and weaknesses compared to competitors, and choosing the best course of action.
• Strategic decisions are the critical choices you make along the way, like deciding on a new market to enter or a product to develop.
• Gaining Competitive Advantage. A Carefully Crafted Strategy, And Its Management Will Enable An Organization To Become Proactive Rather Than Reactive. The Organization Can Then Anticipate Crises And Be Ready To Resolve Them.
• Achieving Sustained Growth. Strategic Management Increases Efficiency And Productivity, Leading To Sustained Growth Over Time.
• Raising Managerial Awareness. Formulating And Implementing Strategies Involves Managers More Keenly With The Organization, And Keeps Them Updated With Industry Trends. This Is Useful When Responding To Industry Disruptions.
• Analysing a complex and dynamic environment – Complete information or

  details on environmental changes including markets and competitors, are hardly

  available. Thus, companies have to act on incomplete information or database.

  Imagine you're driving in a fog. You can't see everything clearly, but you still nee
• Plans, frameworks and system mean rigidity – Strategic planning or

  management reduces flexibility and individual initiatives. All systems imply certain

  amount of rigidity.
• Limitation in implementation – A strategy may be well conceived and formulated,

  but there may be problems in implementation arising out of internal conflicts, lack of

  co-ordination, lack of support from top management etc.
• Inadequate appreciation by the management – The planning and executing teams

  may not get adequate appreciation or reward from the top management when their

  strategies succeed, but, in case of failure, management may not accept the situation.

  This often discourages initiative and new thinking.
• The word strategy comes from Greek strategos, which refers to generalship. 
• The concept and practice of strategy and planning started in the military, and overtime, was applied to business and management. 
• The key objectives of both business strategy and military strategy are the same, i.e. to secure competitive advantage over the rivals.

   
• Strategy is a tool for utilizing resources and skill sets dynamically in a changing environment and thereby, meeting market needs and fulfill stakeholders’ expectations.
• A strategy could be –

  • A plan or course of action making a pattern or common thread;
  • The pattern related to the organisation’s activities drawn from its the policies, objectives and goals;
  • Associated to practising activities to take the organisation from its current state to aspired position;.

   
• Thompson and Strickland (2001) have given a comprehensive definition of strategy as:

   

  “A company’s strategy consists of the combination of competitive moves and business approaches that managers employ to please customers, compete successfully, and achieve organisational objectives.”
• Another approach on strategy is of Michael Porter, where he has described strategy as:

   

  “.. developing and communicating the company’s unique position, making trade-offs, and, forging fit among activities.”
•  ‘Policy’ is derived from a Greek work Politeia meaning ‘polity’ i.e. the state and the citizens.
• The dictionary meaning of policy is the art or manner of governing a nation or the principles on which any measure or course of action is based.
• Policy is the prescribed guidelines for governing actions of an organisation with respect to given objectives.
• According to Kotler, “Policies define how the company will deal with stakeholders, employees, customers, suppliers, distributors, and other important groups.
• Policy is a broader or more general concept in the form of guidelines or principles; however, Strategy is more specific as it relates to a particular situation, objective or target.

   Policy generally comes first; and strategies are considered as element of policy.
• Policies narrow the range of individual discretions so that the employees act consistently on important issues
• Another term tactics is also at times confused with strategy, however, from an overall strategy, a number of sub-strategies follow. These sub-strategies are referred as tactics. 
• Tactics are the specific activities which deliver and implement the strategies in order to fulfil objectives and pursue the mission. Often short term; they can be changed frequently if necessary.
• Alfred D Chandler (1962) he defined strategy as: “The determination of the basic long term-goals and objectives of an enterprise and the adoption of the courses of action and the allocation of resources necessary for carrying out these goals.”
• Kenneth Andrews (1965) He defined strategy as: “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 is to be.”
• Chandler analysed the dynamic relationships between business environment, organisations and strategy.
• Andrew is known for being a part of the group of professors who contributed in developing the subject of Business Policy. 
• Igor Ansoff (1965) explained corporate strategy as: “The common thread among the organisation’s activites and product-markets… that defines the essential nature of business that the organisation was or planned to be in future.”
• William F Glueck (1972) discussed strategy as “a unified, comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved.” He emphasised on three terms namely unified, comprehensive and integrated to describe a plan.