The existence of strategic
management in a job title does not inevitably mean that an organisation has
changed to the new approach, and the position is further complicated by the fact
that there are many different strands of thought about how strategic management
should be applied. First, it is about managing strategically as well as
planning, so although the planning part may still be important, it is only a
component.
Strategic planning tended to focus on the ‘hard’ aspects of the external
environment, and was concerned with markets and the products to supply them. It
was about the formulation of strategy rather than its implementation.
Strategic management includes the internal elements of organisation, such as style, structure and climate, it includes implementation and control, and consideration of the ‘soft’ elements of the environment. It is about the management of the total organisation, in order to create the future. Ansoff described strategic management as a new role for general managers, which was very different from the historic approach of management by exception. Discontinuous events rarely bring a response from functional managers, unless guided by general managers who tend to stick too long to the strategic knitting, often in the face of evidence that the market no longer wants it.
The new general management role required managers to assume a creative and directive role in planning and guiding the firm’s adaptation to a discontinuous and turbulent future. It required entrepreneurial creation of new strategies for the firm, design of new organisational capabilities and guidance of the firm’s transformation to its new strategic posture. It is this combination of these three firm-changing activities that became known as strategic management. The alternative name for strategic management might be ‘disciplined entrepreneurship’.
Strategic management is concerned with deciding on strategy and planning how that strategy is to be put into effect. It can be thought of as having three main elements within it.
1. There is strategic analysis, in which the strategist seeks to understand the strategic position of the organisation.
2. There is a strategic choice stage which is to do with formulation of possible courses of action, their evaluation, and the choice between them. Finally,
3. There is a strategic implementation stage which is to do with planning how the choice of strategy can be put into effect .
Although all this is true, this definition is almost identical to some of the descriptions used in the 1960s to describe corporate planning. What makes strategic management really different is the emphasis on managing the organisation through and by the strategic vision and the strategy, with the realisation that the soft issues in management may be more important in achieving this aim than the analytical processes.
Strategic management had thus shifted emphasis, happily accommodating books such as Ohmae which dealt with the new logic of the global marketplace, and put joint ventures and alliances much higher in the list of strategic options.There was a realisation that businesses had to be world class in their standards of performance, thinking initially applied to manufacturing, and later to all areas of the business.Benchmarking became a tool of strategic management, also claimed bymarketeers, and the total quality management movement. Whether strategic management would want to claim business process re-engineering and resultant UK/US fashion which was a feature of the 1990s for smaller, flatter organisations is a matter of opinion.
One of the differences in the strategic management approach compared to its predecessors is a closer blending of the analytical with the behavioural. The seeds of this were sown long before the new term was coined. The consultancy McKinsey made a great contribution with their 7S model, which brought structure, style, people and shared values together with skills, systems and strategy. The model has been published widely, and one place where it can be found is Peters and Waterman . Some of the concepts behind this model go back many years, and will be discussed in Chapter, together with related developments. The 7S model put culture into the frame, and can be related to much more thinking on transformational or strategic leadership and the management of change.
Though transformational leadership and change management are part of the armoury for the implementation of strategy, surprisingly for an approach to management which includes implementation as a major platform, much less has been written about the broader aspects of implementation. The earliest example of a book which I have found is Stonich, although there have been articles on the subject. Bonoma and Alexander made valuable contributions, and Hussey provides a comprehensive collection of articles and case histories.
With hindsight we can see how what Ansoff originally called ‘strategic management’ has moulded and adapted itself to the changing challenges which businesses face. The interpretation of what is involved in strategic management should vary from firm to firm. This in turn has led to a number of divergent and different schools of thought about business strategy and how it is, and should be, determined.