Free Article Review About Theory And Research In Strategic Management
As a concept, Strategic management is not new. Initially viewed as a limited content for management studies, it is now a culminated and firmly established in the study of business and organization. Initially, a team of strategic managers more or less thought of the organization’s strategic endeavors and tried to sell them to decision makers. During a short period, the field has gained perspective – significant diversity of research topics and methods and relentless growth. However, strategic management is not a systematic process that organizations can adopt. Rather, it is an iterative process calling for industrious and astute management.
The evolution of strategic management has been one that can be symbolically related to the metaphor of a swinging pendulum. At its inception, it turned attention to content related areas like; RBV, knowledge-based view, and strategic leadership of the firm. Bearers of this stream of ideologies believe that inner growth engines – competitive resources – boost a company’s success.
In the realm of its development, the pendulum swung to extremes shifting attention toward industrial structure and firms’ competitive positions in the industry. The adoption of IO economics, for instance, led to the development of research on strategic groups – mainly focused on groupings within industry.
The prominence of boundary relations and competitive dynamics between firms and its environment saw the reemergence of internal firm characteristics. This subfield heavily borrowed from oligopolistic competition and game theory. Actual firms and environments were made use of in the research of the theory’s data. On boundary relationships, transaction costs and agency theory analysis were emphasized. These examined the firm’s environment interface through exchange-based approaches. Subsequently, the agency theory studies spawned significant research on the corporate governance – a variety of topics, such as mergers & acquisitions, down scoping, and divestitures have been considered, as a result.
Methodologically, the evolution involved significant use of more qualitative mechanisms. Early strategy scholars preferred case methods, and little attempts were made to generalize except for problem-solving skills. IO economics later began to emphasize scientific generalizations. These were based on broader sets of firms, and additionally involved use of multivariate statistical tools with large data samples. The scientific methods adopted from IO economics evidently contributed to the development of strategic management into a scholarly field of study.
Evolution of business policy into a strategy concept
As the strategic management concept continued to evolve, so did business policies. Specifically, business policies incorporated the duties of general management and the corporate culture that determined success of the enterprise. With time, a pattern of purposes, responsibilities, and primary objectives and plans were put in place. These were stated in a way that defined what operations companies were in and the type of company they were to become. They categorically involved adequate formulation and on point implementation. The formulation required distinctive competencies while application comprised primarily administrative activities.
Collectively, formulation and implementation helps a company define critical analogies in strategy, including integration of market factors into planning, balancing of conflicting needs – between stakeholders - , and how policies would affect performance. It prompted researchers and scholars to advocate the use of organizational resources and capabilities, learning processes and wise use of agency theory to shift focus to shareholder returns. Rational-deductive strategies and ideal use of political strategies facilitate attainment of stakeholder’s interests gained popularity.
The foundation of strategy concept further put in perspective, the use of best practices in management. Managers in marketing and administration to make business decisions like; buy or make decisions put transaction costs economics as a best practice in place. For example, a manager to determine whether to acquire or produce resources needed by the business can use this method.
A significant challenge that is facing strategic management in the scholarly arena is the evolutionary nature of its research. The competitive landscape, as supplemented by advancements in technology and globalization, continue to pose further questions for strategic management advocates and researchers. In this age, strategic management findings are increasingly becoming significant to executives as educational tools. To this end, strategic management research should be able to answer strategic management questions critically and urgently. As the pendulum continues to swing, however, so does strategic management research development.