Birth of strategic management

Jan 15 09:27 2010 James Kahn Print This Article

The history and development of strategic management

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In the 1950s and 60s,Guest Posting the discipline of Strategic management originated. Although there were numerous early contributors to the literature, the major pioneers were Alfred D. Chandler, Philip Selznick, Igor Ansoff, and Peter Drucker.

Alfred Chandler efforts lead to recognizing the importance of coordinating the various aspects of management under one all-encompassing strategy. Before that the various functions of management were separate with little overall coordination or strategy. Boundary position was used to handle interactions between functions or between departments, that is, there were one or two managers that relayed information back and forth between two departments. Chandler also stressed the importance of taking a long term perspective when looking to the future. In his 1962 groundbreaking work Strategy and Structure, Chandler showed that a company structure, direction, and focus were necessarily given by a long-term coordinated strategy. He says it concisely, “structure follows strategy.”

In 1957, the idea of matching the organization's internal factors with external environmental circumstances was first introduced by Philip Selznick. This core idea was developed into what we now call SWOT analysis by Learned, Andrews, and others at the Harvard Business School General Management Group. In light of the opportunities and threats from the business environment, strengths and weaknesses of the firm are assessed.

By adding a range of strategic concepts and inventing a whole new vocabulary, Igor Ansoff built on Chandler's work. He developed a strategy grid that compared market penetration strategies, product development strategies, market development strategies and horizontal and vertical integration and diversification strategies. He felt that these strategies could be used by management to systematically prepare for future opportunities and challenges.

Peter Drucker was a prolific strategy theorist, he authored of dozens of management books, with a career spanning five decades. His contributions to strategic management were many but two are most important. Firstly, he focused on the importance of objectives. An organization without clear objectives is like a ship without a rudder. As early as 1954 he was developing a theory of management based on objectives. This was promoted into his theory of management by objectives (MBO). The procedure of setting objectives and monitoring your progress towards them should permeate the entire organization, top to bottom according to Drucker.

In 1985, Ellen-Earle Chaffee summarized the main elements of strategic management theory from her point of view by the 1970s:

•           Strategic management includes adapting the organization to its business environment.

•           Strategic management is hard to catch and complex. Change creates novel combinations of circumstances requiring unstructured non-repetitive responses.

•           Strategic management has a major influence on the entire organization by providing direction.

•           Strategic management includes both strategy formation which she called content and also strategy implementation which she called process.

•           Strategic management is partially planned and partially unplanned.

•           Strategic management is done at multi-levels: overall corporate strategy, and individual business strategies.

•           Strategic management involves both conceptual and analytical thought processes.

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James Kahn
James Kahn

James is an expert in writing about legal forms and documents that may help you when your in the search of the right legal document. He writes many articles about forms ranging from, power of attorney forms, landlord tenant forms, and almost any legal form that your searching for.

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