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Thursday, April 02, 2015

A brief introduction to the history and evolution of Strategy as an academic discipline

A brief introduction to the history and evolution of Strategy as an
academic discipline

Twenty four centuries ago a Chinese war advisor and philosopher, Sun
Tzu, wrote to explain what we today understand as Strategy in his
famous work 'The Art of War'. In his work he not only spoke about the
importance of positioning, which he terms as 'Shih'- a place where the
forces (army) have to be deployed so that it automatically gains an
advantage over its rivals, but also the idea of 'preparedness' to win
a war. There are so many statements and quotes of Sun Tzu that one
could get to read on the internet each explaining and exploring a
different dimension that can be readily compared to the nuances of
elements constituting today's business and policy studies.

One of the statements that is made in 'Art of War' goes "The best way
to win a war; is never to fight one". With such statements Sun Tzu
shifts the focus from the euphoria of war to resource acquisition and
retention. In all the thirty one principles, Sun Tzu discusses the
importance of resource management. Another important statement that is
mentioned in the 'Art of War'- "What everyone can see are my tactics
and what no one can identify are my strategies" throws light on
another important concept of strategy which is that it is made of a
series of carefully designed tactics.

Between 350BC and 270BC, a professor from Takshashila University named
Vishnusharma or kautilya who was also known popularly as Chanakya
wrote in his famous work- Arthashastra, tenets that can easily be
considered as ingredients of strategy. Kautilya brought together
knowledge from polity, administration, war sciences, commerce and
economics to demonstrate comprehensive understanding of knowledge of
strategy. This clearly shows the importance of cross functional
(disciplinary) relevance the subject strategy has if one needs to
understand it in its entirety. Kautilya, with his abundant knowledge,
helped Maurya dynasty to be formed and achieve the peak of its
prosperity and glory.
Much like Sun Tzu's art of war Von Clausewitz, a major general in the
German army writes in his book 'On War', in 1930, the importance of
avoiding a war. His influence can be seen in the American nuclear
deterrence under the belief that the best way to avoid a nuclear war
is to have the ability to engage in one. This approach of wanting to
avoid a major disaster by engaging in research and development to
acquire the required capability and resources to do so continues to
influence many countries as a part of their military strategy even

So what brings these thoughts and ideas about war so close to
businesses that in every board room discussion, the main agenda always
revolves around this enigmatic, often misunderstood term called
strategy? Well there are many reasons that show a similarity in the
way world is perceived during war time and the way the world of
business is perceived today. One of the most important reasons among
them is the complexity associated with decision making. The dynamics
involved in a war situation is not very different from the dynamics of
a market place. In both situations, recalling a decision is almost
impossible and even if it is done, is very expensive. Imagine a
situation in the battlefield when a particular troop is ordered to
attack and immediately ordered to retreat. Sounds much like a company
deciding to penetrate the market fully and the very next year deciding
to find a niche for itself.

With this background, now let us try to look at academic developments
that have happened in the area of strategy in business for the last
six to four decades. One particular school of thought that was
primarily advocated during 1960s is the positioning school of thought.
Here the practitioners as well as literati focused on opportunities
that organizations can identify and specify and enable itself to
capitalize on the same. Much like 'Art of War', here too strategy was
looked at a process or an approach to achieve that competitive
positioning. Some of the thinkers who contributed to this era are Igor
Ansoff, Chandler and Andrews.

During 1970s and 80s the idea of strategy graduated from being focused
on the reason behind strategizing to the content and process of
strategy. This time period is when the structure of strategic
management process was deliberated upon. There was a lot of emphasis
given to implementation of strategy and the way these initiatives were
reviewed and controlled. Although people such as Igor Ansoff continued
to contribute to the body of knowledge of strategy, some notable
thinkers like Henry Mintzberg and Michael Porter made remarkable
contribution that would stand relevant even today. Mintzberg's
emergent strategy and Michael Porter's notion of competitive advantage
are some of the most important aspects of discussion even in today's
business world and academia.

During the late 1980s and early 1990s saw a paradigm shift in the way
strategy was understood, taught and practiced. The idea of resource
based view; logical incrementalism took the subject of strategy into a
different direction. Some of the notable works that came during this
era are the concepts of core competence, value system and game theory.
Apart from Michael Porter and Ansoff who continued to contribute to
the area of study, this era saw thinkers such as Sumantra Goshal, C K
Prahalad, Gary Hamel and Jay Barney. The focus in this era was given
to internal capabilities and resources and ideas such as unrelated
diversification and asset acquisition were highly criticized.

2000 and onwards has seen new ideas and theories in the area of
strategy that has much to do with intangibles and the organizations'
take on managing these intangibles. Both from the firm point of view
as well as the industry point of view, thinkers have contributed to
the notion of intangibility that is associated with making a firm's
competitive advantage sustainable. While Prahalad and Hamel continued
to work on the idea of core competence, Andy Grove presented the
notion of inflection point. Much focus was given to the big term
called 'Innovation'. Along with innovation taking the front seat in
most of the novel thoughts presented by thinkers of strategy, there
are others such as 'dynamic capability', knowledge and process
management which were also widely discussed.

This note, as suggested in the beginning, provides a snapshot of
history of strategy as a discipline and brings together some of the
notable contributions in this area over the years very briefly. To get
a deeper understanding of the process of evolution, one must of course
look individually into all the aspects and identify possible linkages
between these nodes more strategically.

Dilipchandra S
Institute of Management, Christ University

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