The term strategy is one of the most commonly used words, especially in the business environment. Many organizations find it necessary to define the term and use it in their business operations. Management, business schools and inside training focus on a different strategy development intended to equip people with the knowledge they need to form and implement strategic decisions in their organizations. People find it necessary to use strategy in different settings, especially whenever they need to plan something. This includes planning anything from business and organizational issues to social life and other informal situations. Different departments within the organization have their own strategies, which might be distinct from the overall organization strategy, but which contribute towards fulfilling the goals that the organization has established. Strategy implies having the foresight, a holistic view of issues while identifying and defining goals as well as finding ways to achieve them.
In simple terms, strategy refers to the general direction that an organization takes in fulfillment of its goals. It is “an action plan designed to move an organization toward the achievement of its vision”. Although the term strategy is often used in business, it is borrowed from the military language. In the military sense, the term strategy is the action of directing troops into position, before they engage the enemy in war. This involves understanding the best position and direction to use, as well as understanding the enemy in order to enable one to become successful, once the enemy becomes involved in the war. In understanding strategy as a term used in the military, Liddel Hart defines strategy as “the art of distributing and applying military means to fulfill the ends of policy”. The same concept applies in business since strategy creates a competitive advantage. It involves the organization having the foresight of the industry and market and developing measures to ensure that it is ready to handle the competition. For an organization to develop a strategy, it has to have a policy, which will help in achieving its aim. This way, the organization is able to spearhead and pioneer the competition. Strategy acts as a link between the gaps that exist, once an organization forms a policy and tactics that it intends to use in terms of implementing the policies. Strategic decisions enable an organization to differentiate itself from the competition. It is not a short-term measure, but it is a way for the organization to ensure that it takes care of its future needs by developing long-term goals.
Different authors have written about strategies in different ways. They have developed various perspectives and theories on strategy. Wittington identified four diverse perspectives of strategy. These include the classical perspective, evolutionary perspective, processual perspective, and the systemic perspective. The classical perspective focuses on the significance of the manager in distributing resources. According to this perspective, the manager has almost complete control in determining how to allocate resources in the organization. This perspective is guided by the rationality and self-interest of the manager because he or she is able to allocate these resources at will. The evolutionary perspective is concerned with the essential behavioral differences between distinct firms and market selection. This perspective notes the limitations of the manager or the decision-maker, which is different from that of the classical perspective. The manager may be in an executive position, but he or she is not in a position to have complete control of the resources. The manager does not get all the credit for the performance. The performance is determined by the mix of different market forces, feedback, and other events.
The processual perspective of strategy recognizes the significance of the interaction between individuals and the environment. The interaction between different individuals and the environment is crucial in determining the economic outcome of the organization. No one can take the credit for the organization’s performance, because it is not possible to predict the result of this interaction. Despite knowledge in human behavior, it is not possible to determine which actions a person will take in a particular situation. People behave differently, and they may not always think rationally; this results in unintended consequences. In addition, people have different motivations for doing something, and they use these motivations as a guide in terms of the direction they will take. The systematic perspective of strategy identifies the significance of the context when defining strategy. Not everyone will rely on the Western or Anglo-Saxon perspective of strategy. The strategy depends on the cultural or social context, educational norms, and the historical context among other factors. An organization in one country may identify its strategy in terms of accomplishing its goals, and this strategy might seem like a short-term initiative in another organization.
Mintzberg and Waters identified strategies as planned or emergent. Organizations take the time to plan their strategies. They usually have clear intentions, when developing their strategies. They implement their decisions based on the strategies they have formulated. On the other hand, it is not always possible to predict the outcome of different situations. Emergent strategies occur, when people make decisions after the feedback they receive, the opportunities they get, and after the bargaining process. They are a result of the interaction between organizations and their environment. Organizations are different, and they choose the strategies, they will use depending on their nature. In some cases, strategies are not planned or emergent. They identified that entrepreneurial, umbrella and ideological strategies lie in between the planned and emergent strategies.
Mintzberg notes that people use strategy in different ways. He observes that people implement strategies to plan how they will move from one level to the other. People tend to develop a pattern of the things they do regularly, and this enables them to develop a strategy for this effect. He adds that strategy is an organization’s perspective in developing its direction and vision. People use strategy w