The concept of Strategy

Introduction : The top management of an organization is concerned with the selection of a course of action from among different alternatives to meet the organizational objectives. The process by which objectives are formulated aand achieved is known as strategic management and strategy acts as the means to achieve the objective. Strategy is the grand design or an overall ‘plan’ which an organization chooses in order to move or react towards the set of objectives by using its resources. Strategies most often devote a general programme of action and an implied deployed of emphasis and resources to attain comprehensive objectives. An organization is considered efficient and operationally effective if it is characterized by coordination between objectives and strategies. There has to be integration of the parts into a complete structure. Strategy helps the organization to meet its uncertain situations with due diligence. Without a strategy, the organization is like a ship without a rudder. It is like a tramp, which has no particular destination to go to. Without an appropriate strategy effectively implemented, the future is always dark and hence, more are the chances of business failure.

Meaning of strategy : The word ‘strategy’  has entered in the field of management from the military services where it refers to apply the forces against an enemy to win a war. Originally, the word strategy ha s been derived from Greek, ‘strategos’ which means generalship.  The word as used for the first time in around  400 BC. The word strategy  means the art of the general to fight in war.

The dictionary meaning of strategy is “the art of so moving or disposing the instrument of warfare as to impose upon enemy, the place time and conditions for fighting by one self”

In management,  the concept of strategy is taken in  more broader terms. According to Glueck, “Strategy is the unified, comprehensive and integrated plan that relates the strategic advantage 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”

This definition of strategy lays stress on the following:

a)   Unified comprehensive and integrated plan

b)  Strategic advantage related to challenges of environment

c)   Proper implementation ensuring achievement of basic  objectives

Another definition of strategy is given below which also relates strategy to its environment. “Strategy is organization’s pattern of response to its environment over a period of time to achieve its goals and mission

This definition lays stress on the following:

a)   It is organization’s pattern of response to its environment

b)  The objective is to achieve its goals and missions

However, various experts do not agree about the precise scope of strategy. Lack of consensus has lead to two broad categories of definations:strategy as action inclusive of objective setting and strategy as action exclusive of objective setting.

Strategy as action, inclusive of objective setting:

In 1960’s, Chandler made an attempt to define strategy as “the determination of basic long term goals and objective of an enterprise and the adoption of the courses of action and the allocation of resources necessary for carrying out these goals”

This definition provides for three types of actions involved in strategy :

a)   Determination of long term goals and objectives

b)  Adoption of courses of action

c)   Allocation of resources

Strategy as action exclusive of objective setting :

This is another view in which strategy has been defined. It  states that strategy is a way in which the firm, reacting to its environment, deploys its principal resources and marshalls its efforts in pursuit of its purpose. Michael Porter has defined strategy as “Creation of a unique and 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”

The people who believe this version of the definition call strategy a unified, compreshensive and integrated plan relating to the strategic advantages of the firm to the challenges of the environment

After considering bothe the views, strategy can  simply be put as management’s plan for achieving its objectives. It basically includes determination and evaluation of alternative paths to an already established mission or objective and eventually, choice of best alternative to be adopted

Nature of Strategy:

Based on the above definations, we can understand the nature of strategy. A few aspects regarding nature of strategy are as follows:

  • Strategy is a major course of action through which an organization relates itself to its environment particularly the external factors to facilitate all actions involved in meeting  the objectives of the organization
  • Strategy is the blend of internal and external factors. To meet the opportunities and threats provided by the external factors, internal factors are matched with them
  • Strategy is the combination of actions aimed to meet a particular condition, to solve certain problems or to achieve a desirable end. The actions are different for different situations
  • Due to its dependence on environmental variables, strategy may involve a contradictory action. An organization may take contradictory actions either simultaneously or with a gap of time. For example, a firm is engaged in closing down of some of its business and at the same time expanding some
  • Strategy is future oriented. Strategic actions are required for new situations which have not arisen before in the past
  • Strategy requires some systems and norms for its efficient adoption in any organization
  • Strategy provides overall  framework for guiding enterprise thinking and action

The purpose of strategy is to determine and communicate a picture of enterprise through a system of major objectives and policies. Strategy is concerned with a unified direction and efficient allocation of an organization’s resources. A well made strategy guides managerial action and thought. It provides an integrated approach for the organization and aids in meeting the challenges posed by environment

Essence of Strategy:

Strategy, according to a survey conducted in 1974, includes the determination and evaluation of alternative paths to an already established mission or objective and eventually, choice of the alternative to be adopted. Strategy is characterized by four important aspects:

  • Long term objectives
  • Competitive Advantage
  • Vector
  • Synergy

About Abey Francis

Abey Francis is the founder of MBAKnol - A Blog about Management Theories and Practices - and he's always happy to share his passion for innovative management practices. You can found him on Google+ and Facebook. If you’d like to reach him, send him an email to: [email protected]
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