Strategies

The original meaning of the word strategy is derived from the Greek word strategos, which referred to a role, namely, that of a general in command of an army. It later came to mean the “art of [Page 824]the general,” comprising the skills necessary to undertake that role.

Although the origins of strategy can be traced back through history, the application of the concept of strategy in a business context is arguably a comparatively recent phenomenon. Cynthia A. Montgomery and Michael E. Porter (1991), for example, regarded the pioneering work in this field as occurring in the 1960s. In their opinion, management thinking was, at that time, oriented toward discrete business functions such as marketing, finance, and production, and there was a pressing need for the development of a more holistic view. The development of a “strategic perspective” was seen as the tool to accomplish this goal.

There are, in fact, almost as many different definitions of strategy as there are writers on the subject. In 1983, Donald C. Hambrick suggested two main reasons for this lack of consensus: first, strategy is a multi-dimensional concept; and second, strategy is situational and will consequently tend to vary by industry.

Rather than striving to identify a single comprehensive definition of strategy, which seems likely to remain elusive, various scholars have sought to identify those areas of broad agreement about what constitutes the basic dimensions of strategy. In 1991, Henry Mintzberg, recognizing the multifaceted nature of strategy, suggested five alternative yet related definitions of strategy, which he termed the five P's—strategy as a plan, a ploy, a pattern, a position, and a perspective. Examining each of these definitions of strategy leads to different implications for the content and the nature of the process of strategic decision making.

Strategy as a plan represents perhaps the most commonly accepted understanding of the term strategy. This definition implies that strategy represents “some sort of consciously intended course of action, a guideline (or set of guidelines) to deal with a situation” (Mintzberg, 1991, p. 12). As a plan, strategy can be defined in general terms or can relate to a specific course of action. In the latter sense, Mintzberg suggested that strategy becomes a ploy—“a specific manoeuvre intended to outwit an opponent or competitor” (1991, p. 13).

As a pattern, strategy encompasses not only the planning aspect of strategy, but also the resulting behavior, in terms of a stream of actions. Here, emphasis is placed on the fact that strategy is “consistency in behavior,” whether or not it is intended. In other words, strategy is inferred from consistency of the organization's actions, which may or may not be consistent with a stated plan.

As a position, strategy is seen as a means of locating an organization in its environment. From this perspective, strategy “becomes the mediating force—or ‘match’—between organisation and environment, that is, between the internal and external context (of the organisation)” (Mintzberg, 1991, p. 16). Mintzberg also maintained that this definition of strategy can be compatible with either (or all) of the other definitions in that a position can be preselected and aspired to through a plan (or ploy) and/or it can be reached (perhaps even found) through a pattern of behavior.

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