Defining the Concept of Strategy

A strategy is a leading necessity for any modern business because of its indispensable presence in all companies, becoming the vector of their activity and expansion, growth of their popularity and exploration of new spaces or retention of the common profit rates to sustain shareholders’ satisfaction. One who does not conduct any scientific research can define a strategy as a direction that has been planned for the company to pursue in its business activity; however, the reality of theoretical considerations of the concept is much more complicated than it could have seemed. Despite the outer simplicity of the term, too many researchers agree that the concept of strategy is a complex, multidimensional phenomenon that is interpreted very widely and requires additional consideration to enable theorists to arrive at a more or less joint conclusion. The present paper aims to analyze the wide scope of literature dedicated to defining a strategy and finding out the reasons that prevent scientists from obtaining a common idea thereof.

The initial opinion on the subject of a strategy that instigated the present research is the idea of Markides (1999, p. 6) that there is little agreement on what a strategy is. Finally, on analyzing several ideas on the identity and essence of a strategy, Markides (1999) states that nobody generally knows what a strategy is. Surely, this idea makes sense, but only from the point of view of having an overall idea and complete understanding of all elements and definitions of a strategy. Much has been spoken about this concept, much research has been dedicated to it, and so it would be thoughtless to state that no consensus has been reached at all. Thus, to acquire at least formal understanding of what a strategy is and how it is viewed by different researchers, it is essential to consider a set of definitions on the subject and generate a unified formula of strategy’s representation in the modern literature.

The ambiguity of the term may be already seen in the way the Merriam-Webster Dictionary defines strategy. There are several definitions, one of which refers to the strategy as a military advantage leading to superiority, another one concerns strategy as a plan or method of doing something and implementing plans into action, while the third one deals with the success of progress achievement in a certain series of actions (Strategy, 2010). It can be easily explained, paying attention to the analysis of El-Kadi (2008) saying that the origin of the word ‘strategy’ dates back to ancient Greece and is a compound word “army + moving/leading” (Strategy Definition and Fundamentals, 2010). If one draws a parallel between ancient wars and modern market competition, the resemblance will be evident – nowadays people fight at the commercial battlefield as fiercely as they used to fight in the warfare some centuries ago. Longman’s dictionary also refers to the strategy in the three dimensions analyzed above, but summarizes this concept as the skill of planning (Longman). Logically, one comes to the point of discovering what planning lies within the concept of a business strategy, making it so complex for comprehension. Here the work of Johnson, Sholes and Whittington becomes highly helpful – they did much of analyzing the main constituents of a strategy as a phenomenon, thus making its definition easier.

First of all, the authors note that a strategy is a scope of an organization’s activities – deciding whether it should be broadened or narrowed is an important activity shaping the strategy in future. Secondly, it is an advantage of an organization in terms of competition – hence, the second step is defining the competitive environment of the organization to activate a relevant response to it. Then come the strategic fit with the business environment – the company considers its own positioning not only according to competitors, but in the whole market as well. The organization’s resources and competences become the material of which the strategy is made – it is obvious that no results can be achieved in case the company has no tools for planning and no sources for the implementation of the plan (Johnson, Scholes and Whittington, 2008, p. 3). Finally, the authors emphasize the significant influence produced by values and expectations within the company concerning its strategy and summarize its essence as follows:

“Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations” (Johnson, Scholes and Whittington, 2008, p. 3).

Following the analysis offered by Johnson, Scholes and Whittington, one should consider the major framework of strategic analysis and planning that is directed at answering the questions set in their definition. It becomes possible only with the application of the triple model of interrelated processes such as strategic analysis, strategic choice and strategy implementation (What is Strategy?, 2010). A company’s strategy is also deeply connected with its mission, vision and values, thus showing what the company will be and what its employees will do to implement their future vision of the company into reality (Strategy: Methods, Models and Theories, 2010). Multiple theories dictating various approaches to studying, treating and designing strategies (e.g. the Classical approach, evolutionary perspectives attributed to the concept of strategy, processual and systemic approaches) have also added heterogeneity to understanding what a business strategy is (Whittington, 2001, pp. 11-30).

Too varied research and too varied findings thereof brought about the change in perception of strategy, thus allowing its analysis in five dimensions: as a plan, a pattern, a position, a perspective, and a ploy (Mintzberg, 1987, p. 11). It goes without saying that after such layered perception of the term that can hardly be understood without a proper process of disambiguation its vagueness has been seriously intensified. Adding some information on the modern perception of strategy as design, experience, ideas and discourse it is obvious that such a broad concept cannot be identified in simple terms (Grant, 2005, p. 24). Some parts of the concept are too broad and generalizable to be limited to the definition of strategy only, while others are too narrow and lack variability, thus limiting the scope of interpretation (Hax and Majluf, 1995, p. 1).

One more challenge that has appeared in the debate over the unified definition of a strategy is the fact that it cannot be considered only as a detached, theoretical term that finds no reflection in the real life and global business activity. A successful strategy is the main factor of a firm’s success in the market, of the growing popularity, sales and superiority in the market. Logically, the majority of theorists and practitioners are trying to find the universal formula of success concealed in the definition of the strategy that is well-balanced, combined and weighed wisely to leverage the company’s position in the market. Knowing what a true strategy is will open the doors for companies wishing to conquer the market and will become the main tool in the market activities of all companies without any exception.

Nonetheless, no matter how weird it may sound, but even the extensive research in all companies that achieved tremendous success in the market at all times leads to nowhere – each company remained unique and owes success to the uniqueness of its decisions that cannot be repeated with the same success ever since. The strategy is successful while it is unique and is used for the first time, so the attempt to define it only leads to failure in understanding of the core factor of success. For example, the way Markides (1999) defines the procedure of making up a successful strategy provides an additional proof for everything said:

“The common belief is that companies can design a superior strategy by asking intelligent questions, exploring possible answers, experimenting with possible solutions, and starting the thought process all over again by questioning the answers at earlier. Effective strategic design is a process of continuously asking questions and creatively thinking through the issues” (Markides, 1999, p. 7).

Another piece of evidence in favor of the voiced opinion is the definition of a strategy as ‘doing right things’ and its implementation as ‘doing things right’ given by the Harvard Business School (2005, p. xi). One can see that strategies are so varied, and right things are unique and individual for each company, so the definition of a distinct strategy in a distinct company may be given only separately, for each particular case discussed.

Every strategy is a highly complex phenomenon including a huge number of internal and external factors influencing the company’s activity and shaping its competitive advantage, defining its ambition in the market and availability of resources it is ready to allocate for winning the competitive advantage etc. The corporate-level strategy of a certain company will be one concept, and the operational-level strategy of the same company will include completely other components that will be substantially different from those for the previous one. There is no formula of a strategy – there is a huge number of components that can be included into it, and it is up to every administration or the strategic planning unit to choose the combination that will create their unique change profile, will apply their resources reasonably and wisely and will arrive at the stipulated vision of the company.

References

Grant, RM 2005, Contemporary Strategy Analysis, Wiley-Blackwell. Hax, AC, & Majluf, NS 1995, Strategy Concept and Process: A Pragmatic Approach, 2^nd edn, Prentice Hall.

Harvard Business School 2005, Strategy: Create and Implement the Best Strategy for Your Business, Harvard Business Press.

Hax, AC, & Majluf, NS 1995, Strategy Concept and Process: A Pragmatic Approach, 2^nd edn, Prentice Hall.

Johnson, G, Scholes, K and Whittington, R 2008, Exploring Corporate Strategy, 8^th edn, Harlow: Pearson Education.

Markides, C 1999, ‘In search of strategy’, Sloan Management Review, Spring 1999.

Mintzberg, H 2001, ‘The Strategy Concept I: Five Ps for Strategy’, California Management Review, 1987, pp. 11-24.

‘Strategy’ 2010, In Merriam-Webster Online Dictionary, Web.

‘Strategy’ 2010, Longman Dictionary of Contemporary English, Web.

‘Strategy Definition and Fundamentals’ 2010, Web.

‘Strategy: Methods, Models and Theories’ 2010, Web.

‘What is Strategy?’ 2010, Web.

Wittington, R 2001, What is strategy, and does it matter?, Cengage Learning EMEA.