Strategic Discourse

Conceptual Overview

Many strategy texts produce a teleological account of strategy making from the ancient Greeks to the present day. While it is not unusual for a discipline to affirm and legitimate itself through such claims, it does disguise the relative recentness of the discourse of strategy. While managers have always performed strategy, it is only in the past 30 years or so that a language has emerged that we would recognize as strategic discourse. Terms such as mission statements, SWOT analyses, KPIs, and strategic intent are familiar across the organizational world, but they are representative of the discourse of strategy that creates reality about organizations and their environments. It is important, therefore, to draw a distinction between strategy and the discourse of strategy. Organizations and managers within them articulate their actions increasingly through the discourse of strategy.

Industrial economics has long grappled with issues of firm performance and competitiveness. Often approached through game theory, industrial economics lay the foundations for the emergence of strategy within business schools. Ideas formulated by writers such as Ansoff were to mark the emergence of the canon of strategic management, which in turn became distinct from industrial economics. The rise of strategic management coincided with the expansion of business schools. Following a predominantly functional syllabus, strategy became the subject that provided [Page 1466]coherence to the MBA—transcending narrow functional concerns. Work from writers such as Ansoff, and later Porter, became important parts of the emerging canon of strategic management within the business school. In the translation of these ideas to the business school, they acquired a heavy dose of normative. In many ways, strategy and industrial economics were awkward bedfellows: inscribed in strategy are assumptions about agency, which are very often denied by the positivist market studies conducted by economists.

Michael Porter is the quintessential strategy professor, coming out of the discipline of industrial economics. His major contributions include Competitive Strategy in 1980, the Competitive Advantage of Nations from 1990, and more recently, work on clusters. In each case, Porter's work was based on readily accepted industrial economics concepts that, when translated into business schools, became new and innovative concepts. In this regard, it is difficult to overstate the influence of Porter on the canon of strategic management. His early work provided a means of analyzing a market and determining the relative power of different actors. On this basis, he argued that firms have three generic strategies open to them: cost leadership, differentiation, and, segmentation. Porter argues that cost leadership is a means of competition that aims to be a low-cost producer; it is generally pursued by mass producers who have a significant market share and experience economies of scale. With differentiation, competition is based on the product being regarded as unique or special and is very often associated with premium pricing and brand loyalty. Segmentation is when an organization competes by focusing on a specific niche within a market. Which strategy was likely to be successful in a particular context was soon to become a normative article of faith.

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