1.1 Three influential definitions of strategy
Box 1 contains some quotations about strategy from some noted thinkers on the subject.
Box 1 What people say about strategy
The determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for those goals.
The strategic aim of a business is to earn a return on capital, and if in any particular case the return in the long run is not satisfactory, the deficiency should be corrected or the activity abandoned.
Essentially, developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.
Each of the quotations in Box 1 emphasises different aspects of strategy, but there are some common themes:
- Strategies concern the activities of organisations and companies at a fundamental level – phrases like in the long-run, long-term and at a broad level suggest that strategy addresses the really important issues facing organisations.
- Strategy determines goals and objectives.
- It deliberately, and selectively, allocates resources in order to achieve goals and objectives.
- It analyses what options are available to the organisation, and chooses which to pursue.
- It takes place in a competitive environment where some organisations succeed and others fail.
These themes of identifying what is fundamental to an organisation, setting goals and objectives, allocating resources, analysing situations, choosing between options and competing effectively will recur throughout the study of strategy. This section shows that they form the basis of a common understanding of what strategy is.
One way of shedding light on the meaning of a term is to consider its etymology – that is, its history as a word. The modern English word ‘strategy’ comes from the ancient Greek word strategos (itself a combination of the Greek for ‘army’ and ‘to lead’). So, its original meaning derives from military leadership necessary to achieve victory in war. The language people use to talk about strategy can often be identified as having a military ring to it. Generals of armies have always needed to take strategic decisions in conducting wars. The warfare metaphor likens business leaders to military leaders, strategically guiding those whom they lead towards success in the battle of market competition.
In Activity 3 you’ll start to interpret the vocabulary of strategy in a personal way.
Activity 3 The vocabulary of strategy
Table 1 includes definitions of terms derived from warfare, which are commonly used in strategy literature. Consider your current personal circumstances and fill in the last column of the table for yourself with an example from your everyday life. Then click ‘Reveal discussion’.
Whatever you decided to write in the third column will obviously depend on what you want to achieve in some area of your life, but here are some possibilities based around a personal aspiration that many people have had in recent years – to run a marathon:
- Mission – be healthy and fit.
- Vision or strategic intent – raise money for charity.
- Aim – to run a marathon (26.2 miles or 42 kilometres).
- Objectives – raise £3000 for charity and take part in the London Marathon in two years’ time.
- Strategies – set up a fundraising page. Join an athletics club. Go training every day. Eat a more sensible diet.
- Control – monitor amount of donations made. Measure the number of kilometres achieved each day. If progress is satisfactory, carry on. If it is not, consider other strategies and actions.
This is, of course, an example pitched at the personal level. But we hope it works in this instance to help clarify the meaning of these terms for you, as they apply to businesses and organisations, and even to larger bodies at a national or international level.