Summary:
In current administrative practice, fundamental concepts such as Business, Sales, Bureaucracy, Competition and Strategy, are subject to a dangerous confusion, if not forgotten and marginalized, among the most important considerations of the acts of government of business organizations.
The Administration is based today on the use of excessively "utilitarian" terms and concepts. Around them he has built his gnoseological foundation, adorning himself in an almost abusive way with his enormous syncretic potential.
Business organizations today live under the dictatorship of concepts such as Marketing and "conceptual constructions" such as Strategic Planning. These concepts hide, by the vigor with which they are sustained, those others that constitute the essence of an effective government practice.
The Administration calculates that it has "evolved" thanks to the exercise of these practices, but it is only building theoretical frameworks without the necessary foundation.
It is imperative to return to the conceptual genesis of the management of business organizations, because it essentially does not change, and rather constitutes a fundamental guarantee to face with advantage the increasingly changing environment that current organizations face.
Development:
After a long walk among the concepts that make up current business theory, I have realized that it is based, more and more, on sympathetic but weak sophistication of fundamental precepts that have been abandoned under a hypothetical premise of "evolution and developing". Business theory has dangerously strayed from its roots, progressively losing support and solidity.
Businessmen, and especially business thinkers, now find it difficult to refer to certain concepts by name, or at least like to refer to them by means of daring and confusing interpretations. They also seem to have forgotten the essential meaning of other concepts, and even in spite of this they continue to build extravagant structures of "knowledge" based on their partial understandings and assumptions about them.
Concepts such as Business, Sales, Competition and Strategy are already barely understood in their precise dimension. Its use has been subordinated to the application of other significantly weaker concepts. Because they are on everyone's lips (understood and not understood) and because they are used indiscriminately, these concepts are dramatically losing value in management thinking and are thus causing the existence of a fragile and vulnerable general state of administrative science.
On the other hand, concepts such as Marketing and "conceptual constructions" such as Strategic Planning, sustain an almost "destructive" aggressiveness between management considerations. These "laboratory" concepts have an impetuous development and in general of little consideration and respect for their own origins.
The Administration, with its incomparable capacity for “syncretism”, is creating true “frankestein” with these concepts. And we are close to these "creatures" ending up dominating the common sense of their own creators.
The strategos, or the Strategy professional, must question many of these current practices. You need to recover the fundamental essence of some basic concepts to claim and sustain the transcendental importance of your work. The professional application of the Strategy is today more necessary than ever, at least in the business world, given that the competitive phenomenon that takes place in it has never had a comparison in the history of man, not even among military parallels.
Let's see some concepts that must be "recovered":
1) The concept of Business.- With this term a little of everything has happened, to the point that there are not a few who tend to use it as a synonym for Company.
Actually Business is a task, a function, not a structure. Business is not, from any point of view, the same as a Company or another type of Organization.
In fact, the Business justifies the existence of an Organization. Without the Business premise, there is no Company.
The term Business comes from the Latin word "negotium" which means: "all kinds of activity that represents utility, interest or benefit for those who practice it".
The Company, as a type of Organization, justifies its existence in sustaining an activity that generates utility, interest or profit. In fact, every Organization (not only the Company of a commercial nature) is based on a Business, since all of them carry out activities that generate some type of benefit. From this reality, no institution that is considered "administrable" in the logic of Juan Ignacio Jiménez Nieto is left out, not even the Family at the lower end of the administrative institution, or macro-organizations such as the State at the upper end. All of them are supported by a Business.
This in fact clears up another confusion: the concept of Business (as well as the concept of utility, interest or profit) is not linked exclusively to the monetary criterion.
Now, not all the activities carried out in the Organizations generate the same degree of utility, interest or benefit. Some obtain this result in a more direct and efficient way. This is the case for the Production and Sales functions. These two are what essentially perfect the Business. No other task in organizations acquires the same value.
And since today it is assumed that no Organization will produce what it cannot sell, the Sales function prevails over the Production function, and thus becomes the essential function of the Business.
2) The concept of Sales and the dictatorship of Marketing.- Sales have perfected the Business in organizations for thousands of years in the history of man, and they will do so many years after Marketing concludes its despotic reign over commercial concepts.
If an Organization does not sell, it disappears. If an Organization does not have Marketing (at least in the formats demanded by fashion), but it sells, it does not disappear.
Marketing exists to support Sales efforts. In no case does it replace them.
Marketing is a set of guidelines and techniques that can maximize the development of the Sales effort in an Organization, but cannot replace it.
The concept of Sales prevails over that of Marketing, because the latter does not exist without the former.
Marketing supports, does not direct the Sales function in an Organization. The latter is reserved for the Strategy.
It is proven that business organizations that focus their work on Marketing development to the point that they displace the essential importance of Sales, are ineffective and not very competitive.
It has been shown that Marketing managers work increasingly far from Sales, to the point of considering it only an effect or a consequence of the alchemy of their work between the variables of marketing.
Those who consider that Marketing is a concept that "includes" Sales are wrong. This is not shared by the humble effort of all the people in the Organization who do understand that it must be sold and who often fail to understand why Marketing managers cannot do it. On the other hand, it would be very illustrative to know "Why" the concept of Sales wants to be included in that of Marketing and Why it is uncomfortable to consider the reverse, which on the other hand is the most effective.
It is curious to see how someone who expresses himself in the most confusing language that Marketing can provide and very "simple" to whom, in fact, he sells is considered "updated" and "avant-garde".
3) The concept of Bureaucracy in business organizations.- All the tasks and functions that are not those of the Business in an Organization (that is, Sales and Production), are included among the support functions, or called functions of the bureaucracy.
The term Bureaucracy is a positive interpretation of what should be understood as tasks performed in the "bureau" (desk).
The Business functions require support tasks to optimize their results, for this reason the Accounting, Finance, Administration, Logistics, Human Resources, Marketing, Research and Development functions, etc. can be formed. All of them have specific objectives to meet in organizational efforts, but none greater and more important than supporting the Production and Sales functions.
All the functions of the Bureaucracy are only Cost Centers for the purposes of the interests of the Organization. And as costs they are only justified if at the same time they support the improvement of the Business.
Bureaucracy is the “fat” in the body structure of business organizations, Business is the “muscle”. The Organization needs "fat", but in appropriate measures, never to the point of "obesity". The Bureaucracy cannot develop disproportionately to "suffocate" the Business, in the same way that excess fat cannot reach the point of "squeezing" an individual's heart muscle. At least it cannot do so without seriously endangering the lives of the Organization and the Individual.
It is curious to see how many managers in business organizations run the Business from the interests of the Bureaucracy. Alarm check how many decisions about Business are made based on financial premises, for example, or administration, or logistics. And this violates (fortunately NOT with impunity, because the market takes care of that), the basic Strategic Principle that maintains that Resources are always subordinate to the Business Strategy, and not the opposite.
4) The concept of Competition.- The Company has no competitors, the Business has them. Sales are those that are disputed in the market, there the size of the organizations, the image, the brand or the efficiency of administrative or financial functions are not disputed.
The competitor wants to maximize their own business at the expense of the other. The competitor wants to increase its sales at the expense of the other's sales. The Dispute is generated exclusively from the Sales function.
Competition is always a matter of “zero sum”, because what one wins, another loses. Precepts such as "unsatisfied demands" only constitute potential states of competition. Beyond that, the competition is omnipresent and timeless. Much more with the current consideration of globalized markets and economies.
Competition, on the other hand, is the only variable in the organizational environment that exists with the natural premise of causing "damage" to the interests of the Business and, therefore, of the Organization. No other environmental variable specifically serves this purpose. Many can have this effect, but none is developed for that purpose.
As an effect of Competition, business organizations develop within the framework of a perpetual Conflict, and the entire order of their internal management is obliged to develop based on this reality.
Traditional Administration has developed as a system of thought and action, giving priority to the internal variables of the organizational dynamics. The Administration, in itself, has very poor resources to act effectively on the Conflict. For this reason, and based on the invaluable value of its “syncretism”, it has been forced to turn to gnoseological knowledge from other sciences and disciplines to reinforce its effectiveness in the treatment of external variables. In this way it resorts to Strategy.
The system of thought that develops around the concept of Strategy is probably the most effective that man has to deal with Conflict. The Strategy is the summary of wisdom of thousands of years of history in the life of man and his interaction with the Conflict.
However, the Administration does not present itself with the necessary humility before the Strategy. He only deals with it superficially and on that fragile final state he builds multiple and diverse conceptual frameworks, once again violating the fundamental character of the original precepts.
Today there are no value coincidences among those in the Administration regarding the fundamental meaning of Strategy. The term is completely prostituted in management science.
If there is hardly any coincidence in one thing, it is in the relative utility that Strategic Planning thinking provides for the interests of the Organization in the treatment of environmental variables.
For the Administration, the Strategy concludes as a “type of plan”, one that differs from the rest in the “special” consideration it makes of the variables related to the environment, especially the Competition.
5) The Concept of Strategy.- Like the concept of Business or Sales, Strategy is a heritage in the history of man that greatly outweighs the limited experience of the Administration.
The Strategy is, of course, neither a Plan nor a “type of plan”, in the same way that the Administration itself is not.
The Strategy is a system of thought and action that allows to interact, with advantage, on the Conflict. Strategy is the best known way of “managing” the nature and effects of the Conflict.
The Strategy differs from the Administration in the object of work on which it acts, not in a matter of gnoseological scope.
As a method of government, the Strategy may very well “incorporate” the Administration among its work mechanisms, at least if the fundamental objective of the Organization's work is to resolve the Conflict. On the other hand, the Administration cannot easily "incorporate" the Strategy, at least not if the conditioning of organizational life is outside of it. If the environment conditions the Organization, then the Strategy conditions the Administration.
It is obviously easy to deduce that the approach to the favorable resolution of the Conflict is not an issue that starts and ends by developing plans. The Conflict is, above all, a dynamic full of action and unpredictable situations. In this fundamental aspect of its nature it is far removed from the factors that condition an effective plan. The Conflict requires appropriate Action and Reaction to eventualities, and both aspects are very far from the conceptual genesis of a Plan.
The Strategy is not an orientation for the treatment of aspects in the Long Term either. And this constitutes another wake-up call for the way this aspect has been dealt with in the business world. The dynamics of the Conflict is a short-term matter. The Action has nothing to do with the long term. Everything that is related to the long term ends up being a Plan and nothing more than that.
Now, if the Administration confuses Strategy with Plan, it is completely understandable that it wants to associate Strategy with a Long-Term Plan. However, the Strategy defines the future through the immediate action that it develops on the Conflict. That is your only participation in the considerations that may exist in the future.
Finally, it is very difficult to understand or study Strategy as a function, in the same way that it is very difficult to study the dynamics of a particular Conflict, at least as it unfolds.
This was perfectly clear to those who originally resorted to the term Strategy. This word descends from the Greek word "strategos" which etymologically means General, Commander. The term refers directly to an individual, a person, not a verb or a function.
It is in the process of "latinization" of the term that the word Strategy arises and a certain desire to refer to it as a task or a function.
There is no possible way to narrow down definitions to refer to Strategy as a function. In the same way that there is no possibility of referring to what a man does in the course of his life, other than saying that "he has lived."
The only way to properly define Strategy is by affirming that it constitutes the function of the strategos. Everything that the strategos does when interacting with the Conflict must be understood as Strategy, regardless of whether he does it well or badly, in which case it will be worth referring to a good or a bad Strategy.
Now, what qualifies the strategos in his role? What makes us point out that this particular individual does Strategy when acting? The answer is a very simple precept: the fact that their actions are conditioned by the application of Strategic Principles.
The Strategic Principles are special guidelines for action. Their origin in time is coupled with that of Strategy itself, since they constitute the accumulation of innumerable experiences of innumerable strategos interacting with innumerable conflicts.
The Strategic Principles summarize human wisdom in positive interaction with Conflict. In them there are useful, effective and prudent guidelines to deal with the Conflict. They are guidelines that achieve beneficial results and that have thus been proven over time and for that reason they are now Principles.
When a Strategic Principle advises addressing the Conflict “always concentrating one's own strengths against the weaknesses of the competitor”, it is proposing an orientation whose effectiveness has been proven many times. When another Strategic Principle states that "invincibility is found in defense and vulnerability in attack," it provides wise advice to the man who interacts with the Conflict.
The Strategic Principles are innumerable:
- Estimation of Conditions Comparison of attributes Conversion of time into ally Everyone must benefit from victories Know the trade Be careful with the General - Sovereign relationship Use the normal to distract and the extraordinary to win Coordination of impulse and Take the Initiative Plan for Surprise Be Flexible Reach Critical Mass Deceive the Competitor (Applying Stratagems) Get the Mental Advantage The best defense is a good offense Make victory the only option Etc., etc.
Here, of course, they are not all what they are and they are not all what they are. It is useless to name them all without a specific research effort involved. The important thing lies in understanding that genuine strategic action and the qualification of the strategos emerge from its concrete application.
In addition to the application of Strategic Principles, the strategos must have a deep understanding of the nature and dynamics of the Organization, because the Strategy is developed for its final benefit and because the necessary resources emerge from it to activate it and bring it to fruition. On the other hand, he must also know perfectly the nature and dynamics of the Conflict, because this constitutes his main object of work.
All these considerations are raised as the focus of the study of Strategy moves from the function to the individual, or to everything that he must know and be to achieve the greatest effectiveness in his work with the Conflict.
6) The Sales Strategy.- If the Strategy is the concept of action on the Conflict and this, in turn, is generated from the desire to improve the Sales, then the Strategy is, by precept, the primary guiding factor of Sales activities.
Actually, the only title that is reserved for Strategy is Sales Strategy (or Business Strategy, which has been the same).
The term Strategy is virginally reserved for Sales. There is no meaning or useful purpose in using the word Strategy for a task other than Sales. The Sales Strategy constitutes a central element of all the activities that an Organization must undertake in its development in the market. Plans and actions of all other tasks and functions that exist in the Organization must be “subordinated” to it. Only in this way can the Business be perfected and reach the best competitive state.
Conceptually there is no basis in using the word Strategy in endeavors that are not related to Sales. Referring to "constructions" such as Marketing Strategy, Financial Strategy, Human Resources Strategy or even Organizational Strategy does not have any solid justification.
In reality all the orientations of Marketing, Finance, Human Resources, etc., must be included in the Sales Strategy. They must be part of it.
Conceptually, it is not clear what can or should be understood when using the Strategy as a qualifying adjective. This is the case of "constructions" such as "strategic marketing" or "strategic planning". In these endeavors, Strategy is used in a completely forced way. Neither the Marketing nor the Plan, for example, require this “help”, much less the Strategy, which in each case like these is used in a dramatically partial way.
Theorists of the use of Strategy as a qualifying adjective ignore the enormous wealth they lose by not evaluating the potential of each concept separately. There is still much to discover in Marketing or in planning processes without this kind of epistemological “usurpation” of Strategy. And still much more remains to be learned and applied of the enormous value of the Strategy, without impoverishing the process through its partial use.
The Administration must be aware of the reasonable limits that exist for the practice of its “syncretism”. The usefulness of this mechanic can be seriously affected by moving from clever use to premeditated abuse.
7) Integrated Concepts:
Business-Sales-Competition-Conflict-Strategy-strategos.- The Business sustains the Organization. Sales Perfect Business (not Marketing or other Bureaucracy function). Sales are subject to Competition. For this reason, they generate a perpetual conflict. Strategy is the fundamental weapon to face the Conflict with advantage. The Strategy is not a Plan because the Conflict does not lend itself to the exclusive application of it to be addressed. Strategy is not a long-term consideration because Conflict is not. Strategy is the function of the strategos. This function is qualified by the application of Strategic Principles, deep knowledge of the Organization and the Conflict.
Among the primary interests of the Organization, Strategy is simply the guiding system for sales efforts. But in this simplicity is the existence and value of the Company in the market. Nothing more and nothing less.
