The parallels between business and warfare have often been remarked upon. Management terms such as 'strategy', 'logistics' and 'operations', among others, have been borrowed directly from military science, and other issues such as notions of competition and environment have been influenced more indirectly. In the West, the continued popularity of books with titles such as Marketing Warfare shows that some managers, at least, still believe the military paradigm can be adapted to management, while in East Asia, classic writers on strategy such as Sun Tzu and the Japanese sword fighter Miyamoto Musashi are still read and studied by business leaders.
The comparison of business with warfare is, therefore, not a new one. In the fourth century BC, the Athenian orator Demosthenes criticised the bankers and traders of Athens for treating business as a conflict in which there were winners and losers, where sellers and buyers each strove for advantage over the other. In the early modern period, commerce and warfare were very closely linked, and the great overseas trading companies such as the British and Dutch East India companies maintained their own armed forces. These two companies fought a very bitter private war over control of the spice trade in the Indian Ocean and Indonesia, a war that lasted for much of the 17th Century and carried on even when England and the Netherlands were at peace. This close linkage of war with commerce inevitably led to the practices of the former influencing those of the latter.
Another important factor was the early professionalisation of warfare. The army of the Roman Empire was highly professional and well organised, and that organisation included standard procedures manuals and drill books. The first codification of the principles of war, the Epitoma Rei Militaris (Epitome on the Art of War) by Vegetius, appeared in the fourth century AD, and continued to be read for the next 1000 years. In the 16th Century there appeared the first modern book on strategy, Machiavelli's The Art of War. In the 17th Century professional soldiers such as the Dutch commander Maurice of Nassau and the Italian mercenary Raimondo Montecuccoli wrote and published their own thoughts on the principles of warfare.
By this time, war had not only been professionalised, it had also become industrialised. The advent of gunpowder weapons and larger and larger armies called for more technology in order to provide these armies with food and equipment. During the Thirty Years War (1618-48), the Austrian commander Count Wallenstein not only raised troops and led them in battle, he also built factories to make boots and uniforms, gunpowder works, armouries and foundries to make muskets and cannon, and even iron mines to provide raw materials. He then hired the armies that he had built and equipped to the Holy Roman Emperor, for a substantial profit. His success was such that the Emperor eventually ordered his assassination, fearing that Wallenstein was becoming more powerful than himself. Wallenstein's methods of organisation were later copied in Prussia under Frederick the Great, who astonished contemporaries and modern historians alike by ending the Seven Years War (1756-62) with more money in his treasury than he had when the war began.
Frederick the Great's military successes were studied intently around Europe, as were those of Napoleon a couple of generations later. It was during this period that the idea of 'strategy' really began to develop, and authors like the Swiss-French general Antoine-Henri Jomini and the Prussian staff officer Karl von Clausewitz began looking for first principles in warfare, concepts that, if adhered to, would bring victory. In fact, both Clausewitz and Jomini concluded that the search for such principles was illusory, because any plan, no matter how soundly devised, was likely to fail due to circumstances. Clausewitz referred to this as the problem of 'friction', the concatenation of unforeseen events that gradually builds up and forces plans to be revised, or even scrapped entirely. …