DEFINING

STRATEGIES

Prof.Dr.Dr.Dr.H.C. Constantin

Bratianu

Faculty of Business Administration

Academy of Economic Studies
Bucharest, Romania

MEANING
STRATEGY is a concept taken from the field of wars.
In the ancient Greek city-states STRATEGOS had the
meaning of a general who lead the army against its
enemies. He was thinking HOW to lead his army on
the battle field in order TO WIN.
The purpose of any strategy was to win the victory
by destroying the enemies.
Thus, a strategy is about a future event, in
conditions of uncertainty and it has the purpose of
achieving a vital objective: destroying the enemies.
Thinking the strategy and applying it on the battle
field are two different sequences.

Sun Tzu - The art of war

Conquerors estimate in their temple before the war
begins. They consider everything. The defeated also
estimate before the war, but they do not consider
everything. Estimating completely creates victory.
Estimating incompletely causes failures.
A general who wins all his battles by destroying other
armies is not the ultimate warrior. The ultimate warrior
is one who wins the war by forcing the enemy to
surrender without fighting any battles.
The best military strategy, then, is to use superior
positioning. After that, use diplomacy. After that, use
military force as a threat. Only after all else has failed,
attack your enemy.

Sun Tzu - The art of war

Ancient great warriors first made themselves invincible.
Then, they awaited the enemys moment of
vulnerability. Not to be conquered depends on oneself;
to conquer depends on the actions of the enemy.
A great general establishes his position where he
cannot be defeated. He misses no opportunity to
exploit the weakness of his enemy. A winning general
creates the conditions of victory beginning the war.
A skillful warrior moves his opponent; he does not
allow the opponent to move him. One is strong if he
causes the enemy to respond to him; one is weak if one
must respond to the enemy.

Sun Tzu - The art of war

1. Learn to fight
2. Show the way
3. Do it right
4. Know the facts
5. Expect the worst
6. Seize the day
7. Burn the bridges
8. Do it better
9. Pull together
10. Keep them guessing

The 10
principles

Richard Whittington
Professor of Strategic Management
Sad Business School
Oxford University, UK.

What is strategy and does it matter? 2nd

Edition, Thomson Learning, London, 2001.

Profitmaximizing

Classical

Evolutionary

Processes
Deliberate

Emergent

Systemic

Processual

Plural

Outcomes

Classical
(Deliberate, Profit-maximizing)

It is the approach you will find in books.

Strategy is considered a rational process based on the
economic theory that the purpose of any business is
profit-maximization for increasing the value of
shareholders.
Strategy is a rational process of deliberate analysis
designed to maximize the long-term advantage.
The hypothesis is that future can be anticipated and
predicted, such that a company can plan for the future.
The main approach of this classical strategy is
planning.
Strategic planning means planning for achieving longterm objectives.

Alfred D. Chandler
Professor Emeritus,
Harvard University, USA

The determination of the long run goals and

objectives of an enterprise and the adoption of
courses of action and the allocation of resources
necessary for carrying out these goals.

Alfred Sloan Jr.

Former President and
CEO of General Motors,
USA

The strategic aim of any 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.

Classical
(Deliberate, Profit-maximizing)

Alfred Sloan defined the fundamental strategic problem

as positioning the firm in those markets in which
maximum profits could be earned.
More recently, Michael Porter developed the theory of
competitive advantage, focusing on the market.
Competitive advantage does not maximize the profit in
an absolute way, but in a relative way. That means that
if you have a certain competitive advantage with respect
to other competitors, you will have a higher profit than
those competitors.
For classical approach to strategy, profitability is the
supreme goal of business, and rational planning is the
means to achieve it.

Michael Porter
Professor of Strategic
Management,
Harvard University, USA

Competitive strategy aims to establish a profitable

and sustainable position against the forces that
determine industry competition.

Bruce Henderson
Founder of the Boston
Consulting Group (BCG),
USA

Classical economic theories of competition are so

simplistic and sterile that they have been less
contributions to understanding than obstacles. These
theories postulate rational, self-interested behaviour by
individuals who interact through market exchangers in a
fixed and static legal system of property and contracts.

Evolutionary
(Emergent, Profit-maximization)
Evolutionary approaches to strategy are less
confident about top managements ability to plan
and to act rationally.
Rather than relying on managers, they expect
markets to secure profit maximization. That can be
done by competitive processes based on natural
selection.
Planning does not matter since only the fittest
survive and performs. Economic models are
constructed by analogy with the natural law of the
jungle (the strong animal eats the weak animal).

Evolutionary
(Emergent, Profit-maximization)
Some authors proposed the biological principle of
natural selection to develop an evolutionary theory of
the firm that downgraded managerial strategy and
emphasized environmental fit.
Markets, not managers, choose the prevailing
strategies within a particular environment.
For evolutionary strategy the message is clear:
Differentiate or die. Also, it is important to focus on
reducing costs and increasing efficiency.
Many theorists of evolutionary strategy emphasize the
limited capacity of organizations to anticipate and
respond purposively to changes in the business
environment.

Henry Mintzberg
Professor of Strategic
Management, McGill
University, Canada

A pattern in a stream of decisions.

Processual
(Emergent, Plural)
Processual approaches to strategy generally share
the evolutionary scepticism about rational strategy
making, but are less confident about markets
ensuring profit-maximization outcomes.
The best processual advise is not to strive after the
unattainable ideal of rational fluid of action, but to
accept and work with the world as it is.
Processual strategy is based on the awareness of
the limits of human cognition and on need of the
political compromise in organization, not on profitmaximization computation.

Processual
(Emergent, Plural)
The notion of emergence in strategy finds increasing
support in chaos theory, the new science of complex
adaptive systems. This new science is concerned with
how order tends naturally to spring from chaos. It
doesnt take precise planning from the top, only a few
simple rules guiding action from the bottom.
However attractive market opportunities might be, entry
strategies will fail in the implementation if the firm lacks
the requisite skills and resources internally.
What matters in strategy is the long-term construction
and consolidation of distinctive internal competences.

J. C. Spender

I define strategizing as the judgment or imaginative

response to what is NOT known, to the surprising,
unexpected, incomplete, or illogical nature of what
arises through our practice.

Systemic
(Deliberate, Plural)
Systemic theorists do have faith in the capacity of
organizations to plan for forward and to act effectively
within their environments.
Systemic theorists consider that strategies depend on
the specific context, that there are no general valid
strategies.
Systemic theorists propose, therefore, that companies
differ according to the social and economic systems in
which they are embedded. They are not all perfect
profit-maximization, like in Classical theory.
That means that there are differences between countries
due to their different social, political and cultural
environments.

Systemic
(Deliberate, Plural)
In the USA and UK culture strongly emphasizes the
individualistic entrepreneurship and corporate
governance, without any support from the state.
In Germany and in Japan, state plays an important role
in developing policies and strategies for the economic
development that help companies in their own
strategies.
On the other hand, in countries with a strong Muslim
culture, future events appear as acts of God and that
individuals are powerless in designing their own
strategies. That is a deterministic culture that reduce
uncertainty, but also the liberty of people of thinking for
the future in terms of their own interests.

Ikujiro Nonaka

Strategy is the art of getting jobs done. Engaging in

strategy allows people to share a sense of purpose,
attaches meaning to their actions, pulls everyones
efforts in the chosen direction against all odds.

CREATE SCENARIOS

A scenario is a vivid representation of what you think the future

environment will be down the road.

It is like a story of both events and outcomes that you can anticipate.
It is not just a single forecast, but a range of reasonable or plausible
outcomes that could unfold in pursuit of your strategic target.

Scenarios are important because they channel your thought process

with regard to opportunities and hazards into a plan.

Scenarios allow you to assess the uncertainties, complexities, and

unpredictability of the future. The ability to look ahead in the face of
uncertainty and act on your insights and experience allows you to be
prepared for whatever really happens, whether it is positive or
negative.

Profitmaximizing

Classical

Evolutionary

Processes
Deliberate

Emergent

Strategy

Systemic

Processual

Plural

Outcomes

Goal

Uncertainty
Designed Strategy

Emergent
Strategy

Time

Cultural Context