Theoretical and practical aspects of strategic management, which has gone through a number of stages of development over more than 40 years of its history, have been devoted to many special studies, monographs – both abroad and in our country. An invaluable contribution to the development of this scientific discipline was made by foreign and domestic scientists A. Chandler, K. Andrews, I. Ansoff, J. Quinn, G. Mintzberg, B. Henderson, M. Porter, G. Hamel, K. Prakhalad, Ch Khodar, S. Ghoshal, D. Shendel, R. Koch, H. Wissema, O.S. Vikhansky, I.B. Gurkov, BC Efremov, O.V. Inshakov, VS Katkalo, G.B. Kleiner, E.M. Short, V.D. Markova, G.S. Merzlikin, A.T. Zub, M.V. Loktionov, S.A. Popov, R.A. Fatkhutdinov, V.V. Golden, D.B. Melnichuk and others.
Studies of modern foreign scientists (E. Romanelli, A. Okumura) indicate that one of the main factors contributing to the success of enterprises is the implementation of a suitable strategy. Regardless of the business resources that an organization has, it is the nature of the actions taken that determines its success or failure, i.e., the basis is not the amount of available resources or the chosen field of activity, but the development of a particular strategy.
The role and importance of strategic management is increasing with every goal. Under the conditions of the new innovative economy, the understanding of the opportunities inherent in strategic management is expanding. This type of change, whose meaning J. Schumigter defined as “creative destruction”, generates both new opportunities and new risks. In a turbulent, rapidly changing world economy, the development of the adaptive features of the organization is noted, which makes the process of obtaining information about the external and internal environment almost continuous, turbulence requires the calculation of different strategic alternatives for the organization, different leadership styles, i.e. strategic flexibility. The need for further development and deepening of research in the field of strategic management, its methodology and mechanisms for successful implementation requires the use of the concept of accumulating key organizational competencies, which will necessarily lead to an increase in top management’s understanding of the importance of organizational learning processes in modern enterprises.
In the conditions of the new innovative economy, not only the nature of the strategy has changed, but also other components of the strategic management method. Its content has been enriched with new management tools (value chain, balanced scorecard, cost management concept, EVA assessment, etc.), which ultimately contributes to the transformation of this method into a modern philosophy of successful business, a powerful factor in the effective development of a modern organization. This is evidenced by the results of the analysis of the evolution of strategic management, in which five stages are identified, sources, supporters, and key ideas of each stage are identified.
The subject of strategic management, which consists in finding sources and mechanisms for creating sustainable competitive advantages of enterprises that provide them with economic rents, is fundamentally different from the areas of interest of economics, sociology, psychology and political science and other areas of knowledge that are interested in organizations and their market behavior. At the same time, over the past 40 years, ideas about the content of the concept of strategic management and the subject of its research have made an important evolution. It occurred as a result of comparisons of previously accepted conceptual models with business practices and their subsequent adjustment in order to correspond to changes in the organization and the conditions of its competitive behavior.
Over its relatively short 40-year history, the theory of strategic enterprise management has managed to go a long way in the development of analytical potential and in the development of concepts that are adequate to the needs of modern management practice, while relevant theoretical ideas are often quickly introduced into practice, and innovative approaches of managers are reinforced by the construction of new theoretical concepts. This makes it important to follow the evolution of strategic management. The idea of moving from a reactive model of behavior of the company’s management to a proactive one, shaping the environment of its existence, instead of simply adapting to the existing environment, has become a key understanding that strategic management has come to today. Its analytical apparatus has also undergone cardinal changes. If at first the case method and normative conclusions prevailed in the study of enterprise strategies, then the research began to take on an increasingly positive character – the emphasis shifted to the search for statistical dependencies between the strategies and economic results of firms and the identification of cause-and-effect relationships and even patterns in their behavior. At present, the difference between the tasks of strategic management and scientific discipline, the training course and the field of management and consulting practice is real.
Most scientists distinguish five stages in the evolution of the content of strategic management:
1) the formation of strategic planning (1962-1979);
2) moving away from strategic planning in favor of more flexible ways of managing the long-term development of enterprises – plans for business restructuring, scenario planning (1980 -1985);
3) formation of strategic management (1985-1990);
4) development of new approaches in strategic management: BSC, QMS, etc. (1991-1999);
5) improvement of strategic management based on the concentration of the company’s dynamic abilities within the framework of its resource move to competition (2000 to the present) (Appendix 1).
According to the well-known Russian scientist VS Katkalo, four stages in this evolution should be distinguished: the first is the initial (pre-analytical); the second – the formation of a new scientific discipline; the third is the development of the theory on its own basis, as well as the fourth stage that is now emerging, the essence of which is the formation of a dynamic theory of strategic management (Appendix 2). In general terms, it can be described as a transition from or docking an organization with its external environment (A. Chaidler, I. Ansoff, K. Andrews) to the concept of competitive advantages with an emphasis on the skillful positioning of the company (M. Porter), then, at the turn of the 1990s, to the priority of organizational and managerial factors of competitive advantages of firms and understanding of economic the main result of successful strategies (resource concept), in the last decade – to the priority of the dynamic aspects of strategies, especially organizational learning and entrepreneurship in strategic management. external (market) environment, then the originality of the third was the return of and a new intellectual basis to the organizational capabilities of the enterprise.
Let us consider in more detail the main meaningful stages and characteristics in the evolution of strategic management, during which it went through a number of stages that characterize its formation and qualitative development. It is generally accepted to consider the beginning of scientific research on the strategy of firms in the 1960s, when A. Chander’s books, Strategy and Structure, were published ; the textbook of the Harvard Business School (HSB) “Business Policy: Text and Cases” and I. Ansoff’s book “Corporate Strategy” [Ansoft, 1965]. In these works, the definitions and approaches of the classical theory of strategic management were formulated, but the developments of the founders of the theory of strategic management were of a pronounced applied nature and were conceptually heterogeneous.
A. Chandler’s key postulate that “structure follows strategy” and his concept of the decisive role of managers in the differences between organizations still form the foundation of the theory of strategic management. At present, in the theory of strategic management, in the context of the strengthening of the role of the so-called resource approach, based on the definition and development of the key competencies of the organization, the work of A. Chandler is becoming especially relevant.
For the first time, the Harvard textbook clearly distinguishes between the concepts of corporate strategy and business-level strategy (business strategy, or business unit strategy), which K. Andrews considered an element of corporate strategy. The general logic of the concept of strategic management according to K. Andrews included the link “formulation – implementation – evaluation of the strategy”. The initial development of strategy issues by scientists at the Harvard Business School laid the foundation for the further development of the theory of strategic management within the “school of design”, but at the first stage in the formation of the concept of strategic management (from the late 1960s to the late 1970s), the concept of strategic planning I. Ansoff.
At the first stage of the evolution of strategic planning (from the late 1960s to the late 1970s), this approach was immediately widely appreciated. During these years, the emphasis is on the creation of a new function – planning and such methodologies as the experience curve, the BC1 matrix, the impact of profit on market share. The mistake of this stage was that the staff took the function of creating a strategy from the line managers. And through some kind of planning process with its large streams of documents, the headquarters began to overwhelm, and at the operational level, almost nothing changed. The peak of popularity of formal strategic planning came in the late 1970s and early 1980s, when it was perceived as a means of solving any problems of the company.
In the 1980s formal methods of strategic planning have shown their limitations in the new conditions. Economic recessions in 1980 and 1982 strategic planning failed to predict. The main reasons for this were, firstly, the increased uncertainty of the business environment; secondly, the importance of the humanistic human factor has increased, the concept of corporate culture has been developed. Faced with the “implementation problem”, many companies in the second phase simply abandoned the previous planning process entirely: dismantled their strategic planning structures and shifted the balance of decision-making power back towards line managers of business units. Of course, this was an extreme, because, according to G. Mintzberg, “the need for strategic thinking was not stronger.” Lacking a strategic basis for planning, managers inevitably reverted to old habits and made decisions primarily of a tactical nature, taking into account mainly short-term factors.
The limitation of strategic planning was that the corporate center with its functional services (staff personnel) took the function of creating a strategy from line managers. The development strategy is mostly formed and developed by top management, but its implementation involves the participation of all levels of management, including line managers. Even the most perfect strategic plan can become a pile of unnecessary documents if it is not associated with firm personnel who are not involved in the development and implementation of the strategy. This circumstance was the main reason why many Western companies were so slow to make strategic changes, despite the fact that they followed all the rules of strategic planning.
The second stage in the evolution of the theory and practice of strategic management, which began in the early 1980s. and accompanied by economic downturns in 1980 and 1982, marked by the recognition of the decline in the effectiveness of the classical concept of strategic planning. According to some researchers, in particular, Fortune magazine expert on strategic management W. Kichel, in the early 1980s. less than 10% of American corporations have successfully implemented their carefully planned strategies. Due to the “problem of implementing strategic plans”, many companies have simply completely abandoned the previous planning process, shifted the balance of decision-making power back towards line managers and, without completely abandoning planning phraseology, finally revised the basic principles of strategic planning in favor of more flexible methods. managing their long-term development. The experience of successful companies (GM, Shelf) has shown that it is impossible to put an equal sign between the development of a strategy and its implementation, believing that strategic planning is the main process of strategic management. This is contrary to the modern understanding of strategic management in the context of the resource approach (the key competencies of the organization) and the observed decentralization of the strategic planning process, the transfer of the center of gravity from corporate planning departments to the level of line managers.
Mid to late 1980s. the third stage in the evolution of strategic management proceeded, at which there was again a decisive turn to strategic management, when strategic planning was replaced by strategic management and, in more modern terminology, “strategic management”. It was a time of corporate mergers and acquisitions and risky financial deals. Proponents of strategic management (SM) have limited the scope of JV documentation and transferred primary responsibility for strategy development to management teams at the level of the corporation as a whole or strategic business units. It was during this period that M. Porter pointed out that “there is no substitute for strategic planning.” “Entrepreneurship without a strategic perspective is more likely to lead to failure than to success.”
A recognized specialist in strategic management, G. Mintzberg, in his book The Rise and Fall of Strategic Planning, clearly separated the concepts of planning and strategy, by which he understood either a “spontaneously” developed model of the company’s behavior, or its deliberate “perspective”. The main responsibility for strategy development, and most importantly, for its implementation, was transferred to management teams at the level of the corporation as a whole or strategic business units. It was at this stage in the theory of “spontaneous (emergent) strategy” by T. Mintzberg that an attempt was made to penetrate the essence of organizational processes, the result of which, often unintentionally, was strategy.
Such applied developments of consulting firms as the “experience curve” and the BCG “growth-market share” matrix, various portfolio analysis models (McKinsey, ADL9 Hofer and Schendel, etc.) played a generally positive role, despite the subsequent . mostly reasoned criticism. In 1990, matrix-based portfolio planning, as BC Katkalo writes, “has gone out of fashion in modern theory and practice of strategic management …”. However, if portfolio planning is used not as a mechanistic tool for allocating resources and decisions across a product portfolio, but rather as a logic for choosing approaches to solving the strategic problems of each business unit of a diversified company (and not only), then it can still have value. for corporate level strategies. Therefore, when using well-known portfolio matrices, for example, by Russian companies, it is important to understand the need for different approaches to businesses depending on their positions in the corporate portfolio. The increasing role of strategic consulting for business practice is also evidenced by the average annual steady growth in the number of strategic management consultants, which in 1965-1991. was 15-20%.
At the third stage of the development of the theory of strategic management, the ideas of M. Porter, who is considered the founder of the positioning school, were actively disseminated. M. Porter’s work offered a valuable set of diverse concepts. In our opinion, the most popular of the well-known concepts of M. Porter at the moment remains the value chain – the most important tool for strategic cost analysis, which allows you to allocate costs along the entire chain (from raw materials to final consumers) for all economically important types of economic activity in order to to understand cost behavior and sources of differentiation. The sources of competitive advantage are hidden deep in the value chain, and therefore such an analysis should be systematically carried out by all managers of firms, first analyzing the magnitude of their costs, and then conducting the same analysis in relation to competing firms. This allows you to determine which activities in the chain potentially have a competitive advantage, and which are more efficiently carried out by competitors. This information can be very successfully used by enterprise managers to select specific actions to achieve competitiveness: whether to carry out this type of activity themselves or outsource it, etc.
Since the early 1990s the fourth stage in the development of strategic management has come, accompanied by the emergence of a number of new concepts and approaches: business process reengineering (BPR), total quality management (TQM), key competencies of TOP-characteristics), BSc (BSC) and others that ensure the achievement of strategic success. In the face of constant changes in the business environment, the leaders of organizations had to systematically initiate organizational changes, restructuring in the firm, but most attempts ended, however, in failure due to a lack of basic learning abilities, “the fundamental features of our thinking.” Of particular interest to managers was business process reengineering (BPR), which attempted to combine strategy restructuring (based on process rather than function) with the tactical benefits of cost reduction. BPO implementation proved to be a difficult problem, with many BPO projects being abandoned halfway through because the importance of the human element in redesign processes was underestimated.
In 1996, Business Week proclaimed the arrival of the fifth stage in the development of strategic management: “Strategic planning is back,” thus acknowledging that “reengineering consultants with stopwatches are leaving, economic gurus are coming with a strategic vision of new perspectives.” Researchers and practitioners finally recognized that, firstly, strategy is a very complex phenomenon that cannot be managed on the basis of a single simple formula, and, secondly, that strategic management should not be considered as a “thing for periodic use”, which can be turned on and off, but it still remains effective. G. Hamel’s figurative expression is known on this occasion: “A strategy is not a dance in the rain, performed once a year, and not a project implemented once a decade.” In the age of the Internet, strategic planning, especially in successful business units, has accelerated dramatically and has become shorter in time.
Thus, the analysis of the evolution of strategic management and the practice of successful organizations confirmed the importance of strategic thinking for all levels of management and the value of the resource approach, since strategies are developed not so much in the course of formal planning and analytical work carried out by top management, but in the course of everyday routine managerial work. a work better described in terms of social and political behavior [Mintsberg, 1976; Pettigrew, 1985; Johnson, 1987].
Therefore, we can conclude that, starting from the 1990s, due to new fundamental changes in the environment (globalization, hypercompetition, etc.), success in the new economy began to accompany those enterprises whose strategies were aimed at actively the use of internal potential to change the external environment, rather than simply adapting to it. Increasingly, in search of a competitive advantage, enterprises are looking inward, trying to correctly identify their core competencies and abilities to determine those activities where the enterprise excels in comparison with competitors.
Currently, many companies view strategic management as a continuous evolutionary process. The cooperative forces of globalization, new technologies, deregulation and economic transformation make strategy and strategic thinking the main weapons in the arsenal of modern companies. The radical changes experienced by companies in modern conditions require a radical transition to understanding the strategic direction and transformation of the company’s key competencies, a resource approach compared to a positional (structural) approach to competition. Strategic management will increase its power not from a focus on long-term positioning or on short-term results, on product quality or on redesigning processes, i.e. ‘either or’ but rather a ‘both’ approach and the ability to combine the strengths of opposing phenomena.
The greatest benefit of strategic management is that it encourages and forces managers to consider issues and take action in different areas of their environment, moving from one strategic aspect to another. The strategy should proceed from the interests of not a single strategic aspect, but several at once. In the process of developing and implementing a strategy, managers receive signals from the market and from a specific external environment, which leads to the adaptation of various lines of action in the company (lines, wires connected into one common wire). In other words, business strategy is a cable woven from many different “wires” (innovation strategy, marketing strategy, production strategy, public relations strategy, etc.).
From a fundamental point of view, the power of strategy lies in its ability to combine extremes: goals, techniques, and actions that may seem contradictory or even mutually exclusive on the surface, and make them work together. Instead of an “either or” option, a new approach to strategic management requires the adoption of a “both” philosophy. This is evidenced by an analysis of the current practice of successful companies using the so-called opposite strategies. J. Wilson in the book “The MBA Course in Strategic Management” argues that the management of strategic change requires that the leaders of the organization, when developing a strategy, refrain from a simplistic approach and strive to find a balance between the following seeming extremes (opposite strategies):
• focusing on short-term or long-term tasks;
• achieving business growth or cost control;
• certification of market demands (consumers) or ahead of competitors;
• lead the market or be a follower in it;
• strive for a strategic vision or rely on the flexibility of tactical actions;
• the ability to ensure a balance between the social responsibility of the business and the corporate parameters of the company’s functioning;
• choice by managers of action based on rational analysis or action based on intuition, inspiration and insights;
• the desire to achieve a lower price or offer consumers a higher quality.
Combining these opposites in a strategy that uses the “both” approach, instead of adapting strategies that rely on the “either or” option, in the development and implementation of strategies, will lead to more thoughtful actions and more effective use of strategic management tools. In the old technology of competitive strategies (according to M. Porter), the company had to choose between a low cost strategy and a differentiation strategy that provides high quality at the expense of higher costs. In the context of the globalization of the economy, with the advent of the era of information technology, in most cases this choice no longer exists. Global consumers want to get everything at once, writes M. Zheleny, and high quality, low prices, fast delivery, and maximum reliability, that is, goods and services must satisfy the modern buyer in many aspects.
Thus, the search for a single strategy formula by managers is in vain. Today, the effective application of strategic management requires constant involvement, understanding of all the complexities and the ability to combine strategically opposite phenomena. For example, P. Barnevik (CEO of Asea Brown Bokeri – LBB) considers three contradictions in his company’s strategy to be a boon: “We want to be both local and global, big and small, radically decentralized and centralized in terms of accountability and control.” If we resolve these contradictions, we will really create an organizational advantage. The challenge for managers in strategic management is to balance the extremes, examining each opposite in turn to determine how it can contribute to the strategic aspects, and then incorporating that power into the overall system to help them execute the business strategy. .
Thus, in the conditions of a new innovative economy, it is advisable for managers to follow the following conclusions for the effective use of strategic management tools. Strategic management is not a one-time thing, it cannot be turned on and off like a faucet, and at the same time, strategic planning can be expected to remain effective all the time. Any strategy aimed at achieving sustainability over the long term requires the union of “opposites”. It makes sense for managers to focus more on creative thinking, on strategic opportunities to be generated, and less on process. There are no substitutes for strategic management and the following management ideas and concepts are not a substitute for strategic planning; they are part of it, and as such they should be considered.
According to the Bain and Company survey, management practices show that CEOs overwhelmingly preferred tools to help sharpen strategies and prepare people to focus on growth over cost reduction (two-thirds of respondents said so). In this case, customer-focused strategies are key, so top management of companies turn to management tools to help them focus on the most promising and productive areas of their business. Strategic planning and core competency tools have again reached record levels of use in recent times. Benchmarking has also become more popular, reflecting the interest in setting the right, adequate goals and finding opportunities for improvement.
A narrow focus on what companies do best has had a predictable side effect: Nearly 80% of respondents said they had turned to outsourcing, outsourcing non-core business activities such as information processing or record keeping. Against the backdrop of remaining at the same level of costs and the practical impossibility of reducing prices, top management realized that satisfied customers are “worth their weight in gold.” Nearly 60% of respondents stated that customers and employees are more important than shareholders; owners. Almost 75% of respondents said that the ability to innovate is an important corporate advantage, and 68% say that innovation is more important than price when it comes to long-term success in the industry. The use of growth strategies has risen from 55% to 76%.
As an American public sector respondent puts it: “You can’t afford not to grow, and you can’t afford not to cut costs during a downturn in the current economic climate, you have to be willing to do both. If you’re only doing one thing, you might get in trouble.” The level of satisfaction with management tools, as shown by the Bain survey, largely depends on whether the organization used the tool “limitedly” or “organization-wide”. Corporate-wide use of tools has almost always been more satisfying than limited use within individual corporate business units.
The lesson for corporate executives is that, almost always, serious efforts are more likely to produce satisfactory results. 94% of respondents agree that “management tools for success require support from the top.” Every manager who encounters a management tool in his work needs to be helped to understand three points: why the tool is used; how it will affect the company; what results are expected The Bain survey also revealed what factors influence the success of a management tool. It turned out that managers of more successful companies have a higher satisfaction rating with the tools.
Currently, most companies in the world view strategic management as a continuous evolutionary process, and the importance of strategic thinking and management is increasing in an environment where dynamic changes in business require a radical transition to understanding the strategic processes in the activities of organizations. The goal of strategic management is to ensure that each organization, using certain competitive advantages in today’s activities, also works for its future, laying its foundation. The cooperative forces of globalization, new technologies and economic transformation in enterprises make strategy and strategic thinking the main method of effective management that must be adopted by modern domestic companies.