Ferf

Session 1

1. What is Strategy?

The words ‘strategy’ and ‘strategic decisions’ are typically associated with issues like these:

* The long-term direction of an organization.

* The scope of an organization’s activities. For example, should the organization concentrate on one area of activity, or should it have many?

* Advantage for the organisation over competition.

* Strategic fit with the business environment. Organisations need appropriate positioning in their environment,

* The organisation’s resources and competences. Following ‘the resource-based view’ of strategy, strategy is about exploiting the strategic capability of an organisation, in terms of its resources and competences, to provide competitive advantage and/or yield new opportunities.

* The values and expectations of powerful actors in and around the organisation. These actors – individuals, groups or even other organisations – can drive fundamental issues such as whether an organisation is expansionist or more concerned with consolidation, or where the boundaries are drawn for the organisation’s activities. The beliefs and values of these stakeholders will have a greater or lesser influence on the strategy development of an organisation, depending on the power of each.

Overall, the most basic definition of strategy might be ‘the long-term direction of an organisation’. However, the characteristics described above can provide the basis for a fuller definition:

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Strategy is the direction and scope of an organisation over the long term, whichachieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.

* Complexity is a defining feature of strategy and strategic decisions and is especially

so in organisations with wide geographical scope, such as multinational firms, or wide ranges of products or...