The concept of strategy has for a long time been linked with the military in terms where they plan how and when to hit the enemy. It has etymological roots from a Greek word Strategos which when to take its meaning literally can be translated as “what the general does”. This meaning is, however, not implemented directly in the business field theory. There have been created several definitions to this simple word when applying to the business world. Taking the broader dictionary definition, strategy is defined as a plan, method, or a series of manoeuvres meant to achieve certain specific goals or results in order to get ahead of opponents. Several scholars and authors tried to define this word applying it in the context of business. James Quinn et al (2003, pp. 4-6) wrote that strategy is a pattern that integrates the major goals, policies and sequence of steps of an organisation into one cohesive whole. He continued to imply that a well formed strategy was the key in pooling and allocating the resources of the organization into viable and unique forms that was based on the competencies of its internal workforce as well as taking into account anticipated changes, shortcomings, environmental changes as well as intelligent moves of the opponents.
Another scholar, Kenneth Andrews (1998, cited in Minaj et al., (2008), p.139) defined corporate strategy as the patterns of decisions that determines and reveals the objectives, goals or purposes, produces the core policies for achieving those goals as well as defines the business range that the company is to pursue. He continues to put it across that these decisions reveal also the kind of human and economic contribution that the company aspires to make to its shareholders, workforce, customers as well as the people who are directly or indirectly affected by the company. Johnson (2008, p. 3) simply defined strategy as being the scope and direction which an organisation adopts over the long term and assists to achieve advantage by the use of configuration of its resources in the ever evolving world so as to meet what is expected in the market and fulfil stakeholder’s expectations. These definitions among a myriad of others reflect the hype that this concept of strategy has been put on. The term strategy has been used widely for different purposes, that is why, it may have lost any clearly defined meaning (Rumelt 1980 cited in Grattan (2011) p.24). However, these meanings may be just used to emphasize how important strategy is to an organisation.
The theories of strategy constitute an academic field that has diverse and multidisciplinary school of thoughts that are based partly on basic assumptions as well as disagreements that these theories yearn to explain. Efforts were made to identify and filter the paradigms (Mueller, 2011, p.50) in addition to seeking new approaches. The diversity of strategy field can neither be taken as a Lakatosian research programme (Backhouse 1994, p.81, Chalmers 1982) that comes with commonly acceptable assumptions nor can it be treated as making a Kuhnian paradigm (Robert et al. 2001, p. 6). Ten strategy theory schools have been identified from which three schools form the classical approach as applied to business theory.
The roots of business strategy theory can be traced way back to the 1960s to the publication of three important books: A. Chandler’s “Strategy and Structure: Chapters in the history of industrial enterprise” in 1965; E. P. Learned, C.R Christensen, K. R. Andrews and W. D. Guth’s “Business Policy: Text and Cases” in 1969 as well as the book by I. Ansoff in 1965 titled “Corporate Strategy”. Another contribution recognized by scholars is Distinctive competencies concept of Selznick in 1957. Ansoff is credited as the founder of the planning school while Chandler, Selznick and Learned Writings are recognised to have formed the design school. Porter’s (1980; 85, cited in Grunig Rudolf et al. 2011, pp. 119-120) position school as well as the design and planning schools made the classical strategy theory.
The impact of these schools on the world of business cannot be ignored. They have presuppositions such as positivistic view of knowledge; chief executive officer is identified as the only person tasked with forming strategy which is a planned and centralized processes that gives rise to well defined strategies. These schools, however, got their differences. The design school relies on a centralized and informal process while the planning school outlines a formal process which results in well laid out organisational programming. Together, these schools emphasise that a workable strategy is tailor made to that particular organisation. On the other hand, the position school of Porter identifies generic strategies as cost leadership, focussing and differentiation.
Another theory that has been advanced is the game theory, which is a formal study of conflict and cooperation. The concepts for game theory apply whenever the activities of several agents are interdependent, that is for one individual to obtain something the other one has to have a say, thus, it becomes a win-win situation in order for the individuals to succeed in their activities (Graham et al. 2008 p. 17). Game theoretic analysis traces its roots back to 1838 to the study of duopoly by Antoine Cournot. In 1921, Emile Borel, a mathematician, suggested a formal game theory and he was supported by another mathematician Jon von Neumann in 1928 as the latter suggested the “theory of parlour games.” This theory was established in 1944 as a field after publicizing of the great publication by von Neumann and economist Oskar Morgenstern. John Nash performed a demonstration that showed that finite games always had an equilibrium point (Hooijberg 2007) from which the players chose their actions which were best for them after their opponents had made choices. Game theory was broadened theoretically and implemented in problems of war and politics in the 1950s and 1960s. From 1970s, this theory has driven economic theory revolution (Myerson 1991, p. 14). This theory has also found applications in academic areas such as sociology and psychology. In 1994, game theory was recognized with the Nobel Prize award to Nash, John Harsanyi and Reinhard Selten. Towards the end of the 1990s game theory was highly applied in design of auctions, for example, prominent game theorists were involved in allocation funds and got rights to use the electromagnetic spectrum in the mobile telephony industry.
Strategic thinking dwells on searching and coming up with distinct opportunities to develop values by spurring a creative and provocative dialogue amidst people who have an effect on the direction a company takes in order to attain its objectives. Strategic thinking is the input to strategic planning. An effective strategic thinking unearths potential value creating opportunities as well as assumed challenges concerning a company’s proposition value. It is crucial to target these opportunities when plans are created (Gladwell, 2008, p. 34). Strategic thinking is a way of knowing the core business drivers and critically challenging the conventional thinking about them while conversing with others. Strategic thinking takes into account several factors. It takes into account competencies and skills which define the strengths of the company. These strengths are used to create a unique competitive environment which gives the organization an edge over the rest of the companies. This factor also determines the weakness of the company as the company may be vulnerable to scrutiny or attacks from competitors. Products and offerings is another factor taken into account. One has to understand the type of products which are offered by the company, the type of services, their prices as well as the company’s image that its customers perceive.
The importance of understanding this is to come up with consistent yet unique brand of products that can safely be identified with the company. It is important also to understand any white spaces that may be in the offers while still making proper judgement of the rationale behind the products and services. Another thing a strategic thinker ought to put in mind is whether the brands on offer befit the company’s image and whether the various brands fit with each other. A strategic thinker has to put into consideration the overall context of the organization, especially in regards to finances and how it competes with others; the regulatory environment or how the government involves itself in controlling the activities carried out as well as impacts of these factors on the company. An individual should be able to foresee where the company is headed in a future as well as drawing company projections that will give the performance of the organisation as compared with its competitors. Therefore, he or she should formulate findings and draw conclusions based on that particular positioning. Graham et al. puts it across that markets and customers are vital factors that should be considered, as they help the responsible people to understand their target customers ( p. 61). It should be realized that without markets and, moreover, the customers, companies would be suffering losses. The company has to uniquely find suitable ways in order to meet the particular markets and customers. The final factor involves understanding and having the profile of other companies and industries that offer the same products and services that meet similar needs as the particular company; their similarities and differences. This helps the planners in getting to know the nature of completion, know the company’s unique strengths as well as its weaknesses. Understanding how the competitors react to the company’s strategies, whether there are new possible entrants as well as forecasting how the market equilibrium may be shifted will give the planners an edge in coming up with proper solutions and plans to ensure the company is able to overcome such hurdles.
The processes through which strategic thinking takes through are also considered. These processes are needed to ensure that strategies are aligned to fit and to conform to the company’s mission, vision, operating strengths as well as competitive situations. These processes ensure that strategies that have to be made are goal oriented and that these goals are achievable. These goals should be well set and a clear link should be established between the outcomes and the company’s goals. Processes also ensure that strategies that have to be made are fact based. This means that any strategy that has to be made is backed by real data in additions to assumptions made in order to project the company visions in the future. Using fact based strategies ensure that strategies tell an actual story of the company and not made up facts. Broad thinking should also be criteria used in setting processes for laying out strategies. This ensures that the company becomes strategically nimble in order to consider several alternatives from a pool of thoughts and choose the best fitted for that particular time.
Strategies have to be focussed on whether the company can set its priorities right, that is the organization should ensure to make the necessary choices of what should and should not be done, set up the most important chores it should undertake first and define what does not require urgency. This process should be concentrated on the company’s activities as well as the limited resources at disposal and balance them. Strategies that are set up have to be agreed upon by the multiple stakeholders. In order to accomplish this, a process that develops interactive strategies that gathers views and shares thinking behind the strategy as it develops is required. Another importance of these processes is that they give rise to engaging and adaptable strategies. Engaging means that these strategies will have to pool together vast resources which have to be articulated in order to capture the attention of the stakeholders, for example, people who will be tasked to carry them out. By being adaptable, strategies would be able to adjust based on lessons learnt from previous mistakes, successes and also as new information and through changes in technology. These transitions should seem seamless and should not interfere with normal functioning of the company. To cap these, processes are needed to ensure that strategies are implementable. This is due to the fact that effective strategies hinge on the particular skills and strengths of an organisation and, therefore, should include clearly defined and realistic implementable methods. Strategies that are implementable provide a concise guide to decision making which is responsible for shaping the future behaviour within the company.
Strategic thinking also takes a systems view or a holistic view. It requires an orientation to the whole idea rather than focussing on just part of the idea. This attribute is fostered through deliberate stakeholders mapping, value analysis as well as though conferences that focus on building the future of the company. The intent of the thought has to be analysed since strategic thinking involves having a clearly defined aim. This attribute has a definite direction which unfurls the discovery process as well as the timeline through which implementation takes place. Being able to recall the past and foretell the future and create idea today is another attribute desirable for a strategic thinker. This is because strategic thinking is a dynamic process which is supposed to take non predetermined activities. To enforce this attribute, some important techniques that can be applied are gap analysis, scenario building, as well as systematic use of analogies as it is in case studies. Strategic thinking is hypothesis driven. In other words, strategic thinking is linked to a scientific method. It is essential to come up with new hypothesis which have been properly tested through an iterative method that has no end. This insinuates that strategic thinking entails creativity, conjuring hypothesis and subjecting this hypothesis to critical or analytical testing.
Organisations anchor their dependencies upon a leader who is capable of taking the organisation through any unforeseeable changes. Michael Beer (2009, p.347) writes that though this may look like an easy task to implement, there have been cases where some organisations fail to implement their strategic plans due to improper leadership that is not dynamic enough to fit into changing demands of the current corporate world. The top guns of companies, the chief executive officers, have the belief that they are the contributing factors towards the success or failure of their companies. Each and every leader has to be aware of a well defined business strategy value. However, few individuals take time to think about leadership that will provide the guidance towards achieving the goals set up by the industry or the company. Leadership is said to begin with persons who have been tasked to the leadership positions, but the definition of a leader does not end there. This is because the ability of the given organisation to achieve its goals does not solely rely on the ability of a single individual but a multitude of workers who have to work under the jurisdiction of the single leader. Strategic leader is a person who is able to harness the resources available in the company, assemble and delegate duties to the workers and also motivate them to ensure that the company’s objectives are met. A strategic leader is a leader who implements a strategic plan of an organization.
Strategic planning is the overall planning that makes it possible to conduct a good management process in the company. In other words, strategic planning can be viewed as the first implementation phase of the strategic thinking. Strategic planning takes an individual outside the daily activities of an organisation and provides the people with clear and concise picture of what is expected to be done in the organisation (Johnson 2008, 17). It also gives the clarity of achieving goals and how the leader is going to assist in achieving them. This planning cannot be implemented via ad hoc committees and neither can it be implemented via normal organisational meeting. Proper Leadership has set up in a clearly laid out comprehensive and thorough process. Strategic plans are usually set in parameters catered for the organisation or the company of which the leader has the mandate to see these parameters through (Johnson 2008, 19). Such parameters include time frames where the strategic plans are set for two to three years or even longer. From these, it is visible that strategic planning is partly a way of ensuring that an association remains financially sound and has ability to keep sound reserves through the projection of where the company or the organisation will be at a future date. This systematic planning process entails a number of steps that recognize the current status of the organisation which includes the future vision, mission, operating values, strengths, weaknesses, opportunities, threats, action plans, goals and plans for monitoring.
Strategic planning is very important for the betterment of the common interest of the organisation. An organisation has no sense of direction if it does not have a strategic plan. Such companies do not have an idea of where they are heading to and neither do they have a notion of where they are. It is vital to comprehend the strategic planning concept so the that the organisation or the company may flourish to ensure that the set out objectives are achieved in the right way, with the set out resources, with the set out staff and in the correct timeframe as well as ensuring it keeps up with the laws of the land. The stakeholders who are included in the strategic plans include the share holders, the board of directors, the staff, the customers and clients of the company, external factors to the business environment including the business competitors. The stakeholders within the organisation have to work in unison and synchronize their activities so as to achieve success. This can be achieved through creation of teams (Beldin 2010, p.139) that are supposed to function in harmony with each team player having a specific role to play. It should be noted that many teams fail when individualism crop within the ranks of the team players and performance becomes impaired. This is where the qualities of a good manager are taken into account as he or she has to produce exemplary teambuilding skills in order to control the working of the given industry.
Non profit organisation is a model that lays out strategic plans but has been specialized for small organizations. This model has the assumption that the majority, if not all of the share holders, are represented. This implies that they have the authority to air out their views and they represent fairly homogeneous constituencies. This model changed and later can be modified so as to adapt to community based associations. This enables the model adapt to multiple missions in complex organisations as well as offer many services. The major disadvantage of this model is that it lacks proper tracking when requesting for feedbacks and consensus development. NPO strategic planning entails the recruitment of relevant stakeholders, leaders and power brokers. It includes also the review of the past and present way of the company functioning, review of the company’s mission and vision statements.
Applied strategic planning is a model that is favoured by the military and business people alike. Top-down hierarchy is assumed with plans and operations department that has the responsibility of running this model in addition to recruitment of key personnel and involving them appropriately. This model is applicable in finding solutions for the identifiable problems which can be unified in the opinion to provide a better service. This model entails taking a look at the business environment, haggling and coming up with proper solutions, establishing a future direction, taking into account the threats posed by competing companies, and looking into new products that the company may produce in the future. Applied strategic planning includes the identification of key internal players and relevant consultants, soliciting for the Chief Executive Officer support, identification of the relevant stakeholders and in goals plan setting. With these in mind, it can be assumed that strategic leadership is the management that aids a company to channel its energy in full so that the stakeholders in the company were geared and worked seamlessly towards the achievement of the set objectives through a designated individual or individuals who make up the company leadership. This focus helps in adjusting the direction and also position of the company as a consequence of the changing environment. Planning is supposed to be strategic as it involves preparation of the best method to respond to particular stimuli within the environment of the organisation, irrespective of whether such dynamics in the business environment had been predicted or not, for instance, non profit organisations must learn to cope and adjust to dynamic as well as hostile conditions.
Laying out the leadership strategy means that the objectives have to be clearly analyzed and understood before committing any available resources and then integrating the resources as well as goals to move the company forward . Planning arises since it involves the systematic and deliberate setting of objectives to be accomplished and then coming up with approaches towards realising those objectives. This planning brings about a sequence of queries that aid the people responsible for planning to investigate experience, subject assumptions to testing, put together and incorporate relevant information that relates to the present and project this information into the future to predict how the company would be working in the future (Gary et al. 2004, p.75). It can be well said from these observations that strategic planning is a process of basic and core decisions making and actions taking since it involves choices that have to be taken in order to get the answers to the sequence of questions mentioned earlier. This plan merely consists of set of decisions concerning what is necessary to do, why it is necessary to do, how it should to be done as well as who will have it done. Strategic planning, therefore, entails that some decisions are better than others or some actions should be given a higher priority than others, since the company cannot undertake everything that is doable in the world. Therefore, it is the work of strategic planners to implement these activities in order to ensure the success of the company in achieving its objectives.
Innovation is the creation of a product, service, technology or an idea based on a previous item of the same kind in order to improve its quality, efficiency or present it in a new look. Innovation in leadership entails making of impromptu decisions that may take the company from a brink of collapse to prosperity. It entails coming up with fresh ideas which conform to constitution on the company or the organisation to ensure the smooth running of the company. Innovation fuels growth in business and economics. Change on the other hand means shifting from an old habit and embracing something new, for example, shifting from the old manual record systems to the newer concepts such as cloud computing. Change is mainly brought about by innovation which is in turn brought by a proper strategy. In order for leaders to succeed in their plans, they have to lay out proper strategies which enable them to come up with innovative ideas. For instance, they should be able to anticipate a future change in technology and provide ingenious ways which the company should cope with.
Another case where innovation in leadership is essential is when the leader has to decide on a make or break situations and, especially when dealing with the stakeholders such as the employees. If an industrial action is called against a particular company, the leader of the company had to device ways in which to address the issue amicably without infringing the rights of the employees while still keeping in mind that the shareholders expect high performance. So much to say about innovation and like it is said; change is like rest and with innovation comes change. Change in the mission and vision, changes in goals, changes in leadership and changes in working environment, this has to happen often in order for a company to moult from the old self and obtain a brand new look that is appeasing the final consumers or change in personnel management to bring in new leadership. Strategy, innovations and change have to go together to ensure success of the company or organization.