Corporate strategy is supposed to be the means by which an
organisation achieves and sustains success. Yet, it rarely rises to that level, despite an abundance of corporate strategy
theory and significant research from many organisations over the past few decades. The changes over the years are considered
in the form of small, theoretical refinements, rather than large and significant steps required for further management transition
What explains the relative failure of most organisations to
create effective strategy? Part of the problem is that corporations and their managers have great difficulty clearly and consistently
defining what corporate strategy is, and much of that struggle can be traced to their interpretation of the word strategy
The original meaning of the word strategy derives from the
Geek strategia, which is used in the military terms and represents the ability to employ available resources to win a war.
This interpretation has generated problems when such concept is used in a business context because it implies the existence,
even the necessity, of opponents. As a result, most managers believed that a corporate strategy implies a strong focus on
competition, since competition takes place almost exclusively at the offering level, most organisations concentrate their
strategic efforts on constantly improving the goods and services they offer. This overemphasis on the temporary success, however,
can often obscure the kind of thinking and emphasis that would lead to sustained success, even a continuous repetition of
temporary successes doesn’t equate to sustainable strategy. In an effort to increase the value of single offerings,
the organisation may be distracted from larger questions of structure, mission and objective (Papers4you.com, 2006).
In war, objectives can often be clearly defined, and so strategy
is thought of as a means to a specific end. This view has persisted in the corporate world where strategies are conceived
as plans to accomplish specific goals. Although corporate strategy can be very goal-oriented, especially in the early stages
of a company’s development, the very nature of goals implies temporary success. By contrast, sustainable success is
not, and cannot be an end unto itself or a goal to achieve. Therefore, goal orientation becomes arguably inappropriate when
success has to be indefinitely sustained.
Despite this, an overwhelming number of top executives and
researchers make extensive use of objectives in their quest of lasting corporate success. Certainly, a number of factors contribute
to this: the need of leaders with limited tenure to point to achievements, the tyranny of meeting the expectations of the
financial markets and most management teams extensively rely on forecasting and planning. Still, the idea held by most managers
that strategy itself is all about goal achievement only exacerbates the situation. Therefore, it is important for strategists
to remember that the more specific an objective, the further away it may potentially lead the organisation from its optimal
So how strategy should be redefined? Clearly it cannot rely
too strongly on objectives nor can it focus too heavily on competition. A more fundamental concept is needed to guide an organisation
in seeing its big picture, and such concept should be customer. To create sustainable, long-term success, an organisation
must first and fundamentally understand and relate to its customers. It is the ongoing encouragement of this understanding,
based on neither specific competitors nor temporal objectives, which must be at the heart of any real strategy. And it is
that from which all objectives should naturally flow.
Hosskisson, R.E., Hitt, M.A. Wan, W.P. and Yiu, D. (1999).
“Theory and Research in Strategic Management: Swings of a Pendulum”. Journal of Management, Vol.25, Iss.3, pp.417-457.
Johnson, G. and Scholes, K. (2002). Exploring Corporate Strategy:
Text and Cases. 6th ed. Prentice Hall: Harlow.
Porter, M.E. (2001). “Now is the time to rediscover
strategy”. The Wall Street Journal, November.
Papers For You (2006) "C/B/226. Corporate Strategy: Concept,
Elements and Practices", Available from http://www.coursework4you.co.uk/sprtbus38.htm [22/06/2006]
Papers For You (2006) "P/B/270. Intended strategy Vs. Realised
strategy", Available from http://www.coursework4you.co.uk/sprtbus38.htm [21/06/2006]