Ch 3 Strategy 06.08.02 version 2.doc 06.08.02
Chapter 3. Strategy1
By Marylynn Placet and Kristi M. Branch
The word “strategy” has been in use since Sun Tzu wrote the Art of War in the fourth century
B.C. (Sun Tzu 1971). Sun Tzu wrote, of course, about military strategy. The literature on corporate strategy, which emerged in the 1950s and 1960s (Chandler 1962; Ansoff 1965;
Learned et al. 1965) is vast and continues to grow at an astonishing rate. Strategic management – the way in which a firm identifies its strategic direction and aligns its operational processes to its strategy – has become an academic discipline in its own right, like marketing and finance
(Mintzberg et al. 1998:18; Rumelt et al. 1994:15). In essence, strategy has to do with understanding where an organization will go in the future and how it will get there. Most academicians and corporate managers believe strategy affects the overall welfare of the corporation, and strategy making is an important activity, though a few believe firms are better off without a strategy (see Inkpen and Choudhury 1995). Many who believe strategy is important, however, find fault with the ability of formalized strategic planning processes to deal adequately with the pace of change facing organizations in today’s environment.
The disruptive changes created by revolutionary technologies (including communication and information processing technologies), globalization, and new business methods can turn an organization’s current advantages into barriers for future success and have led to new thinking about the focus and goal of strategy (Christensen and Overdorf 2000; Miller and Morris 1999;
D’Aveni 1994; Brown and Eisenhardt 1998; Tushman and Anderson 1997). D’Aveni (1994) and
Dudik (2000) argue that under the dynamic conditions affecting many organizations today, which
D’Aveni calls hypercompetition,