What is strategy?

Planning and strategy have a long history (Mintzberg, 1994: 6). Writing in 1916, Henri Fayol described having ten-yearly forecasts, revised every five years. Fayol supported the maxim that 'managing means looking ahead', regarding foresight as an essential part of management. Strategic thinking can occur at a number of levels. We have seen already that governments and multinational organizations can shape the future of whole economies and engage in strategic human resource planning at a macro level.

Mintzberg observes that, ironically, planning achieved its greatest importance in two of the most divergent societies on earth: the command economies of the communist world and in corporate America. However, many observers have argued that the Japanese economy is the best illustration of integrated government and corporate strategic planning (Whitehill, 1991: 256). Japan has targeted and supported successful industries but that success has not just been a matter of good fortune. 'Winners' have been created by means of strategic thinking and careful planning at a joint national and organizational level.

Chaffee (1985) considers that (academically) strategy is viewed in three distinct but sometimes conflicting ways: linear strategy, adaptive strategy, and interpretive strategy. The linear model has been used by most researchers and focuses on planning and forecasting. The second model is described as adaptive and most closely associated with ‘strategic management’. This model ‘tends to focus the manager’s attention on means’ and is largely concerned with ‘fit’. The third, interpretative model, is a minority view that sees strategy as a metaphor and, therefore, it is not something which can be measured but is viewed in qualitative terms.

Mintzberg et al (1998) identified 10 ‘schools’ of strategy research which have developed since strategic management emerged as a field of study during the 1960s:

• The Design School - strategy as a process of conception
• The Planning School - strategy as a formal process
• The Positioning School - strategy as an analytical process
• The Entrepreneurial School - strategy as a visionary process
• The Cognitive School - strategy as a mental process
• The Learning School - strategy as an emergent process
• The Power School - strategy as a process of negotiation
• The Cultural School - strategy as a collective process
• The Environmental School - strategy as a reactive process
• The Configuration School - strategy as a process of transformation

In his What is Strategy - And Does It Matter? (Thomson Learning, 2000), Richard Whittington identifies four main approaches:

The Classical approach - 'the oldest and still the most influential, relies on the rational planning method dominant in the textbooks.'

The Evolutionary approach - 'draws on the fatalistic metaphor of biological evolution, but substitutes the discipline of the market for the law of the jungle.'

The Processualist approach - emphasizes the 'sticky imperfect nature of all human life, pragmatically accommodating strategy to the fallible processes of both organizations and markets.

The Systemic approach - 'relativistic, regarding the ends and means of strategy as inescapably linked to the cultures and powers of the local systems in which it takes place.'

Whittington argues that these approaches differ in terms of the outcomes of strategy and the processes by which they are constructed. In terms of outcomes, the Classical and Evolutionary approaches view the maximization of profit as the outcome of strategy, whereas the other two approaches allow for additional outcomes other than profit. In terms of process, the pairings are different with Classical and Systemic approaches agreeing that strategy may be deliberate while Evolutionary and Processualist theorists see strategy as 'emerging from processes governed by chance, confusion and conservatism.'