Reasons for the Fragmentation in the Strategy Field

Table of Content

1. Introduction

2. Historical Development of the Strategy Field

3. Classifications and Different Perspectives of Strategy
3.1. Classifications
3.1.1. The 10 Schools of Strategy by Mintzberg, Ahlstrand and Lampel
3.1.2. The Four Generic Approaches by Whittington
3.2. Three Very Different Perspectives on Strategy
3.2.1. Economics and Strategy
3.2.2. Psychology and Strategy
3.2.3. Sociology and Strategy

4. Reasons for the Fragmentation of the Strategy Field
4.1. Applicability of Theories
4.2. Target Groups
4.3. Changing Business World
4.4. Quality Management

5. Conclusion

Bibliography

APPENDIX 1

Table of Figures

Figure 1: Strategic Planning vs. Strategic Management

Figure 2: Four Perspectives on Strategy

Figure 3: Swings of a Pendulum

1. Introduction

The question to examine in this essay has evolved from a statement made by Elfring and Volberda (2001, p.1) which reads as follows: “In the evolution of strategy research, a diversity of partly competitive and partly supplementary paradigms have emerged.” The task is now to look behind the statement and to ask why this fragmentation happened and how we can make sense of all these different perspectives. Firstly, it is important to examine the roots of the strategy field in order to understand why strategy matters at all and why academics spend so much time and effort on defining their view of “the right” corporate strategy. Following this, I will give an overview of the most common perspectives and schools which emerged along the way. Finally, I will conclude with the reasons behind this diversification and give an outlook into the future of the strategy research.

Before starting up it is essential to underline the fact that there is no such thing as the “one and only” strategy which has developed over time but that with practically every new decade (starting with the 1960’s) there was a new focus and a new way of seeing strategy. The field of strategy is one of the most integrated research areas which exists and for that reason scientists from many different academic backgrounds contributed to the mainstreams of strategy. The point that Elfring and Volberda (2001, p.2) argue is to walk away from inventing new directions and rather look back to pull ideas together for creating a new academic basis to build on.

2. Historical Development of the Strategy Field

This fist part of the essay will examine the question why academics started to get interested in the strategy field in first place and why this interest has even increased in the last two decades. Before taking the word strategy into the business vocabulary the term was rather used in the military language which dates back to the ancient Greece or China (Ansoff 1965). Back then it was all about knowing your enemies and reacting faster than them – in some ways this sounds familiar.

Looking at our century through out the literature (e.g. Hussey 1990 p.3, Volberda, H. and Elfring T. 2001 p.3 and Johnson and Scholes 2002 p.23) it is agreed that the roots of strategic research on an academic level can be traced back to the 1960’s on the basis of the readings from Ansoff (1965), Andrews (1960 in Segal-Horn 1998) or Chandler (1962). These authors realized that planning was “the” issue of the time and that companies would have to look ahead of their annual budget. Jones (in Segal-Horn 1998, p.410) brought up another interesting approach which assumes that the equivalence of “strategic” and “important” in the English language contributed to the power which the field gained very quickly. Back then we can also find the starting point of academic journals and societies that focused on the relevance of strategy in the business environment. The fact that after WWII firms started to grow faster than their internal structure and that the manufacturing sector produced the biggest numbers lead to the question of strategic planning.

Later, during the 70’s it was stated that planning would have to involve all parts of an enterprise and so the word “corporate planning” was born (Johnson and Scholes 2002 p.22). With the economic aspect of “strategy-structure-fit” coming into play the problem though was that the gap between academics and corporate executives became bigger because the ideas where not really applicable in daily business (Spender 1996 cited in, Volberda, H. and Elfring T. 2001 p.27). Soft factors like knowledge, skills, culture (Miles and Snow 1978 in Segal-Horn 1998) and industry recipe (Spender 1989) gained importance and shook the research field to the core. When business became an even more complex environment “strategic management” was the new term to apply; Figure 1 shows the differences between these two approaches.

illustration not visible in this excerpt

Figure 1: Strategic Planning vs. Strategic Management (Hussey 1990, p.5)

In the 80’s when booming companies experienced the first financial crises researchers wanted to know how strategic management would influence the financial performance and so the “old” perspectives came in for criticism. Porter (1987 in Volberda, H. and Elfring T. 2001) worked on that question and focused on competitive advantage and the position of the industry a company was in.

As a consequence of perceiving strategies to be rather emerging than planed the next decade was dedicated to the research of how companies could cope with a fast changing environment and an always advancing technology. Despite the fact that the economic view was still the most important influence for the strategy field many areas e.g. sociology and biology were linked with it and the matter of ethical business was raised. Spender (1996 in Volberda, H. and Elfring T. 2001 p.31) argues that the strong economic background by which the strategy field has gained its legitimacy, was underestimated by researchers from other fields (motioned above). With the revival of the recourse based view (RBV) of the firm the economic basis found their way back into the strategy field (Faulkner 2002, p.13).

With authors like Mintzberg (1998) and Whittington (1993) the era of classification began and all the different mainstreams where found which brings us back to the starting point of this essay where the need for unification was stressed. After looking at the history of strategy development the following chapter will now examine the different perspectives which were evolving over time.

3. Classifications and Different Perspectives of Strategy

Bearing in mind that there are countless ways of looking at the strategy field out there I want to concentrate my work on three mainstreams which can be found through out the literature: The economic view, the psychology view and the sociological view. To conclude each part I will try to map the single perspectives into the works of Mintzberg, Ahlstrand and Lampel, and Whittington which will be explained beforehand.

3.1. Classifications

The reason for me to mention the ways of classification researcher took is to show that a too high number of perspectives in a field can hinder the field from growing. As Volberda and Elfring (2001) examine in their work “…the field of strategic management is extremely fragmented and that there is no agreement concerning the underlying theoretical dimensions nor the methodological approach to be employed.” The classification should help future researcher to map their thoughts and to pull on one string for a better understanding of the strategy field. In chapter 3.2, for each of the three perspectives individually, I will refer back to these classifications.

3.1.1. The 10 Schools of Strategy

In order to make the strategy field an area accessible to everyone, especially managers and students, the three authors try to simplify the field by merging certain perspectives together. They called them schools and it is important to mention that every school has its own limited approach. Appendix 1 will outline the 10 Schools and also it includes a basic explanation the model.

3.1.2. The Four Generic Approaches

The model of Whittington is easily explained as it is a classification along two dimensions which are Outcomes vertically and Process horizontally. As you can see in Figure 3 I added the decades in which the perspectives were most relevant. Having the enormous amounts of researches in mind this model is a very simplified one.

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