I. Strategy
Administration, before becoming the discipline we know, before becoming independent as a liberal science, has had many influences: philosophers, the Catholic Church, psychologists, sociologists, economists, businessmen and the military. Undoubtedly, the military have contributed many contributions to the science of Administration, among which we have: linear organization, command, hierarchy, authority, delegation, direction, centralization, decentralization, General Staff (Staff), discipline, leadership, strategy, tactics.
The strategy is the contribution of the military organizations that we are going to comment on next, meaning that the militias have always been forced to handle large amounts of logistical resources and personnel, therefore, they have had to develop principles of administration.
But what is strategy? A simple definition is to direct a military operation with art, another definition given by the dictionary means ability, dexterity, expertise to direct an issue.
History has shown us that men have bridged their differences through violent confrontation, wars have always existed and will exist; therefore, the strategy has also always existed and will exist, because it has always sought the elimination of the enemy with more and more "art".
Over time, the strategy is no longer the exclusive property of the military, because it is now applied to various fields, one of them to business management. Here is a question, if we apply the strategy in the company, is it to annihilate the enemy (read competitor)?
II. Strategists
A. The military
Although the history of humanity has many heroes and military leaders, none like the ones we are going to describe below have influenced both strategy and its application to business.
1. Sun Tzu
He was a Chinese general who lived around the year 500 BC who is credited with a series of essays on war entitled "The Art of War" and that for 25 centuries has influenced the world's military thinking. Although he does not exactly define the term strategy, he advised more in what corresponds to the offensive strategy to ensure the path to victory. Here a series of quotes:
- "The supreme art of war is to subdue the enemy without fighting." "All wars are based on deception." "The supreme refinement in the art of war is to combat the enemy's plans…" "Those who are experts in the art of war subdue the enemy army without combat. They take the cities without making the assault and overthrow a state without prolonged operations… "" Know the enemy and know yourself and, in a hundred battles, you will never be in the slightest danger. "" When you do not know the enemy, but you know yourself yourself, the chances of victory or defeat are equal. "" If you ignore everything about the enemy and yourself at the same time, it is certain that you are in danger in every battle. "" The general (strategos) must be sure of be able to exploit the situation to your advantage, as circumstances require.It is not linked to specific procedures. "" If an attack is carried out in the ratio of one to ten, it is necessary to first compare the sagacity and strategy of the contending generals… "
2. Karl Von Clausewitz (1780-1831)
Prussian general, he fought against Napoleon in the Russian army and in 1814 he returned to his homeland. In his book "On War" he laid out the foundations of a new strategy and studied warfare from a philosophical point of view. His work is fully valid, many of its basic concepts and the author himself are frequently cited in contemporary military literature.
Quotes
- “The strategy is the use of the encounter (combat) to achieve the objective of the war and the tactic is the use of the military forces in the combat.” “In the strategy we do not see with our own eyes even half of the things that we see in tactics, since everything must be conjectured and assumed "." War is not simply a political act, but a true political instrument, a continuation of political relations, a management of them with other means. " Uncertainty is the difficulty of seeing clearly, it constitutes one of the most powerful frictions in war and makes things appear different from what we had imagined. "" When speaking of the destruction of enemy forces, we must observe that nothing forces us to limit this concept to physical forces, but, on the contrary,they must be understood in them, necessarily the moral ones.
B. The Gurus
But let's see what today's leading business strategy gurus are saying:
1. Alfred D. Chandler
Alfred Dupont Chandler (1918-) was born in Delaware, United States, emeritus professor at Harvard Business School, is a historian and sociologist whose intellectual work has been decisive for the field of company history.
In his work "Strategy & Structure" (1962), Chandler conducted an investigation of four major North American organizations (Du Pont, General Motors, Standard Oil Co. and Sears Roebuck), to show how the structure of those companies adapted and adjusted continuously to your strategy. His conclusion is that the organizational structure of large companies in the United States was determined, gradually, by their marketing strategy. The structure is a means for the organization to operate the strategy and this is the behavior of the organization towards the environment. "If the structure does not follow the strategy," he writes, "the end result is inefficiency." Different environments force companies to adopt new strategies, which also require different organizational structures.
2. Igor Ansoff (1918-2002)
Although deceased two years ago, he is included among the gurus for being the "father of the Strategic Administration." Born in Vladivostock amid the chaos of the Russian revolution, he emigrated to North America where he studied engineering and a PhD in Mathematics, then specialized in Planning at the Lockeed Aircraft Corporation where he gained experience analyzing the complexities of a business environment. He taught at various universities in the United States and Europe.
Plays:
- Corporate Strategy (1965) Business Strategy (1969) Strategic Management (1984) The Firm: Meeting The Legacy Challenge (1986) The New Corporate Strategy (1989).
Ansoff proposes several categories of strategy, each company fits into any of them or can make combinations when looking for long-term objectives:
- Maximum current performance: the purpose of the company is to generate profits. Capital Gains - Earning Short Term Gains. Equity liquidity: seeks to attract buyers trying to demonstrate high equity flexibility. Social responsibility: strategy to show interest in civic issues. Philanthropy: the company remits resources to non-economic objectives or non-profit institutions. Attitude before risks: reduce risks even if profits are reduced.
In a published article, he simplified his concept into two sentences: "the key to strategy is to recognize that if a company is working, then it is part of the environment," to add "when a manager understands the environment and recognizes that the environment is in constant change, then you can make the right decisions leading organizations into the future.
3. Michael Porter
In the early 1980s, strategy was once again at the top with the work of this academic, professor at Harvard Business School, consultant and authority on competitive strategy and international competitiveness. He is the author of 16 books, including:
- Competitive Strategy: Techniques for Analyzing Industries and Competitors (1980) Competitive Advantage: Creating and Sustaining Superior Performance (1985) On Competition (1998). He is also the author of more than 60 articles in specialized publications.
He created the concept of "competitive advantage" that would become part of the business discourse and, later, the political one.
- “The essence of strategy is to choose a unique and valuable position based on systems of activities that are much more difficult to harmonize.” “A reliable strategy begins with a correct objective. And I argue that the only objective that can support a reliable strategy is superior profitability. ”“ A leader also has to ensure that everyone understands the strategy. Strategy became used to being the thought of some mystical vision that only senior management understood, but that violated the most fundamental purpose of a strategy, which is to inform everyone of the thousands of things that can be done in an organization to daily and make sure those things are aligned in the same basic direction. "" The company without strategy is willing to try anything. ""Trying to be in the middle leaves the company in a very poor strategic position."
4. Gary Hamel
Gary Hamel is Professor of Strategic and International Management at London Business School, is part of the Thomas S. Murphy Research Group at Harvard University, and is Chairman of the international consulting firm Strategos. The British magazine The Economist calls him "the greatest strategy guru in the world", Peter Senge of MIT calls him "the most influential thinker on strategy in the Western world." The approach and language of strategy has changed in many of the world's most successful companies: Shell, Nokia, Ford, among others, Dr. Hamel and his colleagues at Strategos have helped management teams create strategies that break through rules and that have ultimately generated millions of dollars in profits.
Plays:
- Alliance Advantage: The Art of Creating Value Through Partnering (1998) Competing for the Future (1994) Competence-Based Competition (1994) Leading the Revolution (2000).
He has also published several articles in the Harvard Business Review, some of them authored by CK Prahalad.
Hamel affirms that companies are more concerned with reducing costs than in the production itself and this is because their strategic vision is too limited, he concludes that the strategist must be a revolutionary, someone who breaks the schemes, just In this way, it will be possible to reinvent the sector and make it more profitable: "strategy must be subversive, both in relation to internal company standards and those of the industry."
"Strategy is a discovery process", that is, strategy is discovering and inventing, continuous innovation.
We have to recognize that Strategic Planning is not the same as strategy. Planning produces plans, not strategies. The strategy making profession has a big problem: there is no theory for strategy.
5. CK Prahalad
Born in 1941 in India, engineer, master in Management in his country, independent consultant, professor of Business Administration at the University of Michigan, he specializes in corporate strategy and in the role and added value of senior management of large and multinational companies. diversified. He has also been a visiting researcher at Harvard, a professor at the Indian Institute of Management, and a visiting professor at the European Institute of Business Administration (INSEAD), based in France. Works: The Multinational Mission: Balancing Local Demands and Global Vision (1987), with Ives Doz, Competing for the Future (1994), with Gary Hamel. Many of his articles have been published in the Harvard Businesss Review and the Strategic Management Journal.
Professor Prahalad's contributions in strategic thinking are widely recognized. In 1992, Business Week magazine described him as
"The most influential thinker in corporate strategy". He has been a senior management consultant in companies such as AT & T, Citicorp, Colgate Palmolive, Oracle, Phillips, Unilever, among others »
- "Today companies must go deep within their organizations to reinvent their strategies." "Strategy is revolution and until now there is no known monarchy that has fostered its own revolution." "Since the older managers do not are very inclined to change, people who are at other levels and closer to new technologies, customers and competitors, could help to formulate the company's strategy "." If we want to escape from the gravitational pull from the past we have to be able to rethink our own orthodoxies. We must rebuild our essential strategies and rethink our core beliefs about how we are going to compete.
6. Kenichi Ohmae
Kenichi Ohmae from Japan is a business consultant, social reformer, journalist, government advisor, Ph.D. in nuclear engineering from the Massachusetts Institute of Technology (MIT), globalization advocate, and a great thinker on Strategy
Administrative. For 23 years he was a partner in McKinsey & Company, Inc., the renowned international management consulting firm, whose headquarters in Tokyo was its director. He has written more than 100 books, many of them related to Japanese public policy and others focused on socio-economic and business analysis, but approximately six of them have become successful and influential in the West.
He has also contributed numerous articles to such publications as the Wall Street Journal, Harvard Business Review, Foreign Affairs and the Los Angeles Times.
Plays:
- The Mind of the Strategist (written in Japanese in 1975, translated in 1982) The Bordeless World (1990) The Evolving Global Economy (1995) The End of the Nation State (1995).
His thesis on the success of his compatriots is that it did not reside in large Strategic Planning Staff in their companies, but in a talented strategist who was guided by a strategic triangle: company, clients and competition.
Dr. Ohmae recommends that strategists use a process of abstraction as a method, to show what would happen if, for example, a once-strong, long-established company in the market begins to show signs of declining competitive vigor. Ohmae recommends that the first step in the abstraction process is to use brainstorming and opinion polls to regroup and particularize the ways in which the company is at a disadvantage compared to its competitors.
It says in the 'Mind of the strategist':
"A successful business strategy does not come from rigorous analysis, but from a thought process that is basically creative and intuitive rather than rational."
7. Henry Mintzberg
Henry Mintzberg is Professor of Management at McGill University in Montreal and Professor of Organization at INSEAD in Fontainebleau. Known for his studies in Strategic Development and Management Practice, Mintzberg is the author or co-author of seven books, including: The Nature of Managerial Work (1973), Mintzberg on Management: Inside Our Strange World of Organizations (1989), Structure in Fives: Designing Effective Organizations (1992), The Rise and Fall of Strategic Planning: Reconceiving Roles for Planning, Plans, Planners (1993), The Strategy Process: Concepts, Contexts, Cases (1995), Strategy Safari: A Guided Tour through the Wilds of Strategic Management (1999).
Dr. Mintzberg has been a contributor to leading periodicals in his field, including Harvard Business Review, California Management Review, and the Academy of Mangament Review.
- “The strategies are not developed under a charter, conceived in an immaculate way. They can appear at any time and anywhere in the organization, typically through informal learning processes rather than formal planning. "" The simple conclusion, to which we must return, is that Strategic Planning is currently incompatible with true strategy-making. ”“… strategy-making is really both a visionary and a learning process, but vision is inaccessible to those who cannot 'see' with their own eyes… ”“ Effective strategy-making it connects doing to thinking, which in turn links instrumentation to formulation. We think to act, to be sure, but we also act to think.
In 1994, Henry Mintzberg in his book "The Rise and Fall of Strategic Planning," argued that the usual method of creating strategy - Strategic Planning - did not work. It failed, because it incorrectly assumed that discontinuities could be predicted, because strategists were disconnected from operations, and because the strategy-making process had become a formal rite. Furthermore, Mintzberg said that traditional Planning did not lead to strategy because strategy is synthesis and synthesis brings ideas together in an organized manner, while Planning is analysis and it seeks to decompose ideas into their constituent parts.
8. Peter F. Drucker
Called the management guru, Dr. Management, among other qualifiers, the Austrian born in 1909 who came to the United States and turned Management into a true discipline. Author of more than thirty books and contributor to numerous journals, he is currently Professor of Social Sciences and Management at Claremont Graduate School. He has been a consultant for corporations as well as non-profit and government organizations. His work covers practically the entire Administration: Management, industrial organization, leadership, business culture, motivation, self-management. He has also touched on the subject of strategy, specifically in his work Managing for Results, published in 1964. As Drucker himself explains in his preface, in the 1985 edition:
«Managing for Results was the first book to be devoted to what is now called 'business strategy'.
It is still the most widely used book on the subject. When I wrote it, more than twenty years ago, the original title was, in fact, Business Strategies, but 'strategy' in those days was not a term in common use. Indeed, when my editor and I wanted to test the title with acquaintances who were executives, consultants, management professors, and booksellers, we were strongly encouraged to abandon that term. 'Strategy', we were told over and over again, belongs to the military or perhaps to political campaigns, but not to business. "Now, of course, 'business strategy' has become a buzzword."
For Drucker this book is still, by far, more comprehensive than others dealing with strategy, because it has pioneered the analysis of markets and products, the organized abandonment of the old, the obsolete, the unproductive. He also showed how to analyze the environment and how to position a business in it. And it was the first book to deal with balancing the business of today with the business of tomorrow. (I invite you to read my article Mr. Management: the work of Peter F. Drucker).
III. Conclusions
Almost 25 centuries have passed since Sun Tzu and almost two centuries since Clausewitz, but the strategy is new in the business field, having started in the 1960s with Alfred D. Chandler, continued in '65 with Igor Ansoff and arrived at a high level with Michael Porter in the '80s and' 90s. In business as in war, the objective of strategy is to put the most favorable conditions in our favor, judging the precise moment to attack or retreat, always correctly evaluating the limits of combat. Business organization and strategy has taken a lot from military organization and strategy and vice versa.
In this era of the new economy, no business strategy can be built on fragmentary or partial analysis or information. In this case, if things go well, it will be a simple matter of luck or intuition. The true strategist does not depend on either one or the other. The strategy is not conceived for static scenarios where competitors do not react or where there are no discontinuities. If so, the strategy would be a purely administrative matter, but it is not because it is not something predictable, quantifiable or controllable. The strategy has a paradoxical logic, it is an objective phenomenon that arises from human conflict, conditions or situations arise involuntarily from its participants, today it may be favorable, but tomorrow it may be a danger.
The strategy in the company is an important issue today and it will continue to be and, although the objective is not the same as that of the military, that is, to annihilate the enemy, it is necessary to anticipate the competitor and / or face a rapid counter-maneuver.
The strategy today is applied not only by the military or by businessmen but also by sportsmen, diplomats, politicians and by ordinary mortals in their harsh daily life.
When the head defines the strategy in a democratic way, it should consider: search for new ideas, configure dynamic scenarios, be bold, banish greater market share, create business opportunities, see the company as part of a bigger picture, be aware of the technological and environmental changes, know the needs of resources, negotiate so that partners and clients do not desert and settle the conflict in their favor.
Bibliography
- Introduction to the General Theory of Administration. Idalberto Chiavenato 1999. Of the war. Karl Von Clausewitz. 1992 Managing for Results. Peter F. Drucker. 1985 Business Magazine. Lima, September 2000.The Handy Guide to the Gurus of Management.Alfred Chandler, the "Father" of Strategy.The Art of Thinking Strategically. Managing Quietly-Henry Mintzberg.Michael Porter´s Big Ideas.
