Defining Strategy

Unit-I; topic 1st

Etymology
Strategos- A Greek word
= Generalship = The actual direction of
military force
Thus,
STATEGY = the art of the general

Chronology of strategic
management
Year 1911
Harvard Business School (HBS), the foremost
management school in the world, introduced a
course in management. It aimed to develop
General Management Capability.
Year 1959
Gordon and Howell report (Ford foundation)
Pierson report (Carnegie foundation)

 Both these reports suggested a course on

Business Policy for giving students an
opportunity to pull together what they have
learned in the separate business fields and
utilize this knowledge in the analysis of
complex business problems.

 1969
American Assembly of Collegiate Schools
of Business (AACSB), a regulatory body,
made it mandatory.

Empirical/practical development

Day-to-day planning
Budgets
Capital budgeting
MBO, etc.
Long-range planning
Strategic planning
Strategic management

Factors responsible
1930s: Expansion of US firms and the consequent
need to integrate functional areas.
1940s: Rapidly changing environment and the
need to cope with it.
1960s: Critical look at the basic concept o
business.
1980s: Redefining the responsibilities of General
Management and the strategic processes of
business.

Scope
1. How do firms behave?
2. Why are firms different?
3. What is the value added by head quarters?
4.What determines success or failure in
international competition?

Definitions

Alfred D. Chandler (1962)

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)

The pattern of goals, purpose, objectives
and the major plans and policies 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.

Igor Ansoff (1965)

The common thread among the
organizations activities and productmarkets that defines the essential
nature of business that the organization was
or planned to be in the future.

William F. Glueck (1972)

A unified, integrated and comprehensive
plan designed to assure that the basic
objectives of the enterprise are achieved.

Henry Mintzberg (1987)

A pattern in a stream of decisions and
actions.

Michael E. Porter (1996)

Developing and communicating the
companys unique position, making tradeoffs, and the forging fit among activities.

Christensen
Business policy is the study of the functions and
responsibilities of senior management, the crucial
problems that affect success in the total enterprise,
and the decisions that determine the direction of
the organization and shape its future. The
problems of policy in business, like those of
policy in public affairs, have to do with the choice
of purposes, the molding of organizational identity
and character, the continuous definition of what
needs to be done, and the mobilization of
resources or the attainment of goals in the face of
competition or adverse circumstance.