The Meaning of Strategy in Business Organizations

There is little consistency in the use of the term strategy. There is no standardization in the understanding of what the word strategy means or how it looks like. The understanding of strategy seems to be fragmented, loose and sometimes even contradictory. The interpretation of strategy seems to change with the training, background and experience of individuals. This post is the first of a series of posts that intents to help to clarify the meaning of strategy. The posts are excerpts from my forthcoming book on Transformative Strategic Planning.

Origin of Strategy

The word “strategy” comes from the Greek and it is defined as the art of the generals. It originally came from the word Strategos.  This word comes from two words, Stratos (Army) and Agos (Leader). It implies that strategy is what the generals need to do and how to lead. The word strategy was later used to represent the primary responsibility of leaders of any type of organizations.

Strategy in Business

Strategy in business is used to describe the setting of the grand direction of an organization. In other words, the final set of objectives that an organization needs to pursue that will ensure the long term success of the organization. It also implies the formulation of all the relevant activities that will ensure that the organization achieves its objectives.

The definition of strategy presented so far, even though correct, does not provide a practical view of how to formulate and implement strategy. Managers and leaders need a lot more clarity to apply the concept.  We can increase the level of clarity when we analyze the anatomy of strategy, the components of strategy, strategic architecture, strategy content and strategy processes.

Various Definitions of Strategy

Consider the following definitions of strategy:

• Strategy is setting of goals and major policies of an organization (Seymour Tiles.)
• Strategy is the determination of the basic long range goals and objectives in an enterprise and the allocation of resources necessary to carrying out these goals by (Alfred Chandler.)
• Strategy is the pattern of decisions in a company that shapes and reveals its objectives, purposes or goals, produces the principal policies and defines the business the company intends to be in and kind of economic and human organization it intends to be (Christensen, Andrews and Bower.)
• An organization’s strategy is where it wants to go and how it intends to get there (McCarthy, Minichello and Curran.)

Strategy as Both Means and Ends

When we analyze all four definitions, we find that there are only two common fundamental concepts. One of them is direction. Goals, purposes and objectives, all indicate where the company wants to go. In the popular language, they mean the ends. The other basic component is how to achieve the ends. In the popular language, it means the means. Strategy, therefore, can be define as the means and the ends of an organization. More appropriately, strategy can be define as the set of highest ends and means of the organization.

Coming Next

Components of Strategy, Strategy Architecture, Strategy Content, Strategy Process

Comments?

What do you think?  Please leave a comment.