Editing Strategy (section)

==Management theory==
{{main|Strategic management}}
{{blockquote|The essence of formulating competitive strategy is relating a company to its environment.
| source = [[Michael Porter]]<ref name="Porter1980">{{cite book| last = Porter| first = Michael E.| year = 1980 | title = Competitive Strategy | publisher = Free Press | isbn = 978-0-684-84148-9| title-link = Competitive Strategy}}</ref>
}}

Modern business strategy emerged as a field of study and practice in the 1960s; prior to that time, the words "strategy" and "competition" rarely appeared in the most prominent management literature.<ref name="LOS2010">{{cite book
| last = Kiechel
| first = Walter
| year = 2010
| title = The Lords of Strategy | publisher = Harvard Business Press
| isbn = 978-1-59139-782-3| title-link = The Lords of Strategy
}}</ref><ref name="Ghemawat1">{{cite journal
| last = Ghemawat
| first = Pankaj
| title = Competition and Business Strategy in Historical Perspective
| journal = Business History Review
| date = Spring 2002
| volume = 76
| issue = 1
| pages = 37–74
| doi = 10.2307/4127751
| jstor = 4127751
| ssrn = 264528
| doi-access = free
}}</ref>
[[Alfred D. Chandler, Jr.|Alfred Chandler]] wrote in 1962 that: "Strategy is the [[determination]] of the basic long-term goals of an [[Business|enterprise]], and the adoption of courses of action and the allocation of resources necessary for carrying out these goals."<ref>Chandler, Alfred ''Strategy and Structure: Chapters in the history of industrial enterprise'', Doubleday, New York, 1962.</ref> [[Michael Porter]] defined strategy in 1980 as the "...broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals" and the "...combination of the ''ends'' (goals) for which the firm is striving and the ''means'' (policies) by which it is seeking to get there."<ref name="Porter1980" />

===Definition===

[[Henry Mintzberg]] described five definitions of strategy in 1998:
* Strategy as plan – a directed course of action to achieve an ''intended'' set of goals; similar to the strategic planning concept;
* Strategy as pattern – a consistent pattern of past behavior, with a strategy ''realized'' over time rather than planned or ''intended''. Where the realized pattern was different from the intent, he referred to the strategy as ''emergent'';
* Strategy as position – locating brands, products, or companies within the market, based on the conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors outside the firm;
* Strategy as ploy – a specific maneuver intended to outwit a competitor; and
* Strategy as perspective – executing strategy based on a "theory of the business" or natural extension of the mindset or ideological perspective of the organization.<ref>Mintzberg, H. Ahlstrand, B. and Lampel, J. ''Strategy Safari : A Guided Tour Through the Wilds of Strategic Management'', The Free Press, New York, 1998.</ref>

Complexity theorists define strategy as the unfolding of the internal and external aspects of the organization that results in actions in a socio-economic context.<ref>{{cite journal|last1=Stacey|first1=R. D.|title=The science of complexity – an alter-native perspective for strategic change processes |journal=Strategic Management Journal|year=1995|volume=16|issue=6 |pages=477–95|doi=10.1002/smj.4250160606|s2cid=16794111}}</ref><ref name="TerraPassador2016">{{cite journal|last1=Terra|first1=L. A. A.|last2=Passador|first2=J. L.|title=Symbiotic Dynamic: The Strategic Problem from the Perspective of Complexity|year=2016|journal=Systems Research and Behavioral Science|volume=33|issue=2|pages=235–248|doi=10.1002/sres.2379}}</ref><ref>{{cite book|last1=Morin|first1=E.|title=Introduction à la pensée complexe|year=2005|publisher=Éditionsdu Seuil|location=Paris}}</ref>

===Strategic Problem===
{{technical|section|date=December 2023}}
In 1998, Crouch defined the strategic problem as maintaining flexible relationships that can range from intense competition to harmonious cooperation among different players in a dynamic market. While Crouch was open to the idea of cooperation between players, his approach still emphasized that strategy is shaped by market conditions and organizational structure. This view aligns with the definitions of strategy proposed by Porter and Mintzberg.<ref>{{cite journal|last1=Crouch|first1=A.|title= Reframing the strategic problem: An accommodation of harmony and belligerence in strategic management|year=1998|journal=Journal of Business Research|volume=41|issue=1|pages=3–13|doi=10.1016/S0148-2963(97)00007-6}}</ref><ref>{{cite journal|last=Porter|first=M. E. A. A.|title= What is strategy?|year=1996|journal=Harvard Business Review|volume=74|issue=6|pages=61–78}}</ref><ref>{{cite journal|last=Mintzberg|first=H.|title= Crafting Strategy|year=1987|journal=Harvard Business Review|pages=66–75}}</ref>

In contrast, Burnett regards strategy as a plan formulated through methodology in which the strategic problem encompasses six tasks: goal formulation, environmental analysis, strategy formulation, strategy evaluation, strategy implementation, and strategy control.<ref>{{cite journal|last=Burnett|first=J.J.|title=A strategic approach to managing crises|year=1998|journal=Public Relations Review|volume=24|issue=4|pages=475–488|doi=10.1016/S0363-8111(99)80112-X }}</ref>

The literature identifies two main sources for defining a strategic problem. The first is related to environmental factors, and the second focuses on the organizational context (Mukherji and Hurtado, 2001). These two sources summarize three dimensions originally proposed by Ansoff and Hayes (1981). According to them, a strategic problem arises from analysis of internal and external issues, the processes to solve them, and the variables involved.<ref>{{cite journal|last1=Mukherji|first1=A.|last2=Hurtado|first2=P.|title=Interpreting, categorizing and responding to the environment: the role of culture in strategic problem definition|year=2001|journal=Management Decision|volume=39|issue=2|pages=105–112|doi=10.1108/EUM0000000005416 }}</ref>

In Terra and Passador's view, organizations and the systems around them are tightly connected, so they rely on each other to survive. This means a strategy should balance being proactive and reactive. This involves recognizing the organization’s impact on the environment and acting to minimize harm while adapting to new demands. The strategy should also align internal and external aspects of the organization and include all related entities. This helps build a complex socio-economic system where the organization is part of a sustainable ecosystem.<ref name="TerraPassador2016" />

===Complexity theory===
{{technical|section|date=December 2023}}
[[Complexity]] science, as articulated by R. D. Stacey, represents a conceptual framework capable of harmonizing emergent and deliberate strategies. Within complexity approaches the term "strategy" is intricately linked to action. Complexity theorists view programs merely as predetermined sequences effective in highly ordered and less chaotic environments. Conversely, strategy emerges from a simultaneous examination of determined conditions (order) and uncertainties (disorder) that drive action. Complexity theory posits that strategy involves execution, encompasses control and emergence, scrutinizes both internal and external organizational aspects, and can take the form of maneuvers or any other act or process.<ref name="Stacey1995">{{cite journal|last1=Stacey|first1=R. D.|title= The science of complexity: An alternative perspective for strategic change processes|year=1995|journal=Strategic Management Journal|volume=16|issue=6|pages=477–495|doi=10.1002/smj.4250160606 }}</ref><ref name="TerraPassador2016"/><ref name="Morin2005">{{cite book |last1=Morin |first1=E. |title=Introduction à la pensée complexe |publisher=Éditionsdu Seuil |year=2005 |location=Paris}}</ref>

The works of Stacey stand as pioneering efforts in applying complexity principles to the field of strategy. This author applied self-organization and chaos principles to describe strategy, organizational change dynamics, and learning. Their propositions advocate for strategy approached through choices and the evolutionary process of competitive selection. In this context, corrections of anomalies occur through actions involving negative feedback, while innovation and continuous change stem from actions guided by positive feedback.<ref>{{cite journal|last1=Stecey|first1=R. D.|title=Emerging strategies for a chaotic environment|year=1996|journal=Long Range Planning|volume=29|issue=2|pages=182–189|doi=10.1016/0024-6301(96)00006-4}}</ref><ref name="Stacey1995"/><ref>{{cite book|last1=Stacey|first1=R. D.|title=The chaos frontier: creative strategic control for business|year=2005|publisher=Redwood Press|location=Malksham}}</ref>

Dynamically, complexity in strategic management can be elucidated through the model of "Symbiotic Dynamics" by Terra and Passador.<ref name="TerraPassador2016" /><ref name="TerraPassador2019">{{cite journal|last1=Terra|first1=L. A. A.|last2=Passador|first2=J. L.|title=The nature of social organization of production: From firms to complex dynamics|year=2019|journal=Systems Research and Behavioral Science|volume=36|issue=4|pages=514–531|doi=10.1002/sres.2567 |s2cid=149946425 }}</ref> This model conceives the social organization of production as an interplay between two distinct systems existing in a symbiotic relationship while interconnected with the external environment. The organization's social network acts as a self-referential entity controlling the organization's life, while its technical structure resembles a purposeful "machine" supplying the social system by processing resources. These intertwined structures exchange disturbances and residues while interacting with the external world through their openness. Essentially, as the organization produces itself, it also hetero-produces, surviving through energy and resource flows across its subsystems.<ref name="TerraPassador2016" /><ref name="TerraPassador2019"/>

This dynamic has strategic implications, governing organizational dynamics through a set of attraction basins establishing operational and regenerative capabilities. Hence, one of the primary roles of strategists is to identify "human attractors" and assess their impacts on organizational dynamics. According to the theory of Symbiotic Dynamics, both leaders and the technical system can act as attractors, directly influencing organizational dynamics and responses to external disruptions. Terra and Passador further assert that while producing, organizations contribute to environmental entropy, potentially leading to abrupt ruptures and collapses within their subsystems, even within the organizations themselves. Given this issue, the authors conclude that organizations intervening to maintain the environment's stability within suitable parameters for survival tend to exhibit greater longevity.<ref name="TerraPassador2016" /><ref name="TerraPassador2019"/>

The theory of Symbiotic Dynamics posits that organizations must acknowledge their impact on the external environment (markets, society, and the environment) and act systematically to reduce their degradation while adapting to the demands arising from these interactions. To achieve this, organizations need to incorporate all interconnected systems into their decision-making processes, enabling the envisioning of complex socio-economic systems where they integrate in a stable and sustainable manner. This blend of proactivity and reactivity is fundamental to ensuring the survival of the organization itself.<ref name="TerraPassador2016" />

===Components===
Professor [[Richard Rumelt|Richard P. Rumelt]] described strategy as a type of problem solving in 2011. He wrote that good strategy has an underlying structure he called a ''kernel''. The kernel has three parts: 1) A ''diagnosis'' that defines or explains the nature of the challenge; 2) A ''guiding policy'' for dealing with the challenge; and 3) Coherent ''actions'' designed to carry out the guiding policy.<ref name="Rumelt2011">{{cite book
| last = Rumelt
| first = Richard P.
| year = 2011
| title = Good Strategy/Bad Strategy
| publisher = Crown Business
| isbn = 978-0-307-88623-1
| url-access = registration
| url = https://archive.org/details/goodstrategybads00rume
}}</ref>
President [[John F. Kennedy|Kennedy]] illustrated these three elements of strategy in his [[Cuban Missile Crisis]] Address to the Nation of 22 October 1962:
# Diagnosis: "This Government, as promised, has maintained the closest surveillance of the Soviet military buildup on the island of Cuba. Within the past week, unmistakable evidence has established the fact that a series of offensive missile sites are now in preparation on that imprisoned island. The purpose of these bases can be none other than to provide a [[nuclear weapon|nuclear]] strike capability against the Western Hemisphere."
# Guiding Policy: "Our unswerving objective, therefore, must be to prevent the use of these missiles against this or any other country, and to secure their withdrawal or elimination from the Western Hemisphere."
# Action Plans: First among seven numbered steps was the following: "To halt this offensive buildup a strict quarantine on all offensive military equipment under shipment to Cuba is being initiated. All ships of any kind bound for Cuba from whatever nation or port will, if found to contain cargoes of offensive weapons, be turned back."<ref>{{cite web|url=http://www.americanrhetoric.com/speeches/jfkcubanmissilecrisis.html|title=American Rhetoric: John F. Kennedy – Cuban Missile Crisis Address to the Nation}}</ref>

Rumelt wrote in 2011 that three important aspects of strategy include "premeditation, the anticipation of others' behavior, and the purposeful design of coordinated actions." He described strategy as solving a design problem, with trade-offs among various elements that must be arranged, adjusted and coordinated, rather than a plan or choice.<ref name="Rumelt2011"/>

===Formulation and implementation===
Strategy typically involves two major processes: ''[[formulation]]'' and ''[[implementation]]''. ''Formulation'' involves analyzing the environment or situation, making a diagnosis, and developing guiding policies. It includes such activities as [[strategic planning]] and [[strategic thinking]]. ''Implementation'' refers to the action plans taken to achieve the goals established by the guiding policy.<ref name="Mintzberg and Quinn 1996"/><ref name="Rumelt2011"/>

[[Bruce Henderson]] wrote in 1981 that: "Strategy depends upon the ability to foresee future consequences of present initiatives." He wrote that the basic requirements for strategy development include, among other factors: 1) extensive knowledge about the environment, market and competitors;
2) ability to examine this knowledge as an interactive dynamic system; and
3) the imagination and logic to choose between specific alternatives. Henderson wrote that strategy was valuable because of: "finite resources, uncertainty about an adversary's capability and intentions; the irreversible commitment of resources; necessity of coordinating action over time and distance; uncertainty about control of the initiative; and the nature of adversaries' mutual perceptions of each other."<ref>{{cite web| author = Henderson, Bruce | date = 1 January 1981 | title=The Concept of Strategy|url=https://www.bcgperspectives.com/content/Classics/strategy_concept_of_strategy/|access-date= 18 April 2014|publisher= [[Boston Consulting Group]]}}</ref>