|Subject :||Strategic Management|
|Topic :||Is Business Strategy A Mixture Of Luck And Judgement, Opportunities And Design, Or More Of An Art Than A Science?|
Firms or companies today face a broad array of risks, problems and issues internal to them and external factors relative to increased international competition due to globalisation. Thus, strategic management is an activity necessary to be undertaken by firms who want to sustain their existence in today’s highly competitive environment. Firms need to develop strategies as they are managements’ game plan for growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives. Strategic management is the set of managerial decisions and actions that determines the long-run performance of a firm. The question however arises as to whether strategic management is an art or a science or that it is simply a mixture of luck and good judgement.
Firms or companies today face a broad array of risks, problems and issues, be they strategic, operational, financial, customer, vendor, competitor, to name a few. Moreover, concerns about increased international competition brought about by the rapid globalisation phenomenon abound not only in the US but also in Europe with the further expansion of the European Union and in Asia and Latin America due to increased economic integration in these regions. Management experts therefore have argued time and again that firms or companies should respond to environmental changes, such as increased competition, by engaging in more systematic planning to anticipate and respond to changing and unforeseen events. The reason for this argument is because formal strategic planning has been seen to enhance a firm’s performance.
Thompson et al (2006) explain that a firm’s strategy is its management game plan for growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives. Thus, a firm’s strategy indicates the choices its managers have made about the specific actions it is taking and plans to take in order to move the company in the intended direction and achieve the targeted outcomes. In one way or another, a firm’s strategy is partly the result of trial-and-error organisational learning about what worked in the past and what did not. It is also partly the product of managerial analysis and strategic thinking about what actions need to be taken in the light of all the circumstances surrounding the firm’s situation. Continue reading