21 A Brief History of Business Strategy
Much has been written about the strategies that firms aiming at corporate success should adopt. My objective in this chapter is to describe the evolution of thinking about business strategy over the thirty years in which it has been identified as a distinct subject of study, and the relationship of that thinking to the analysis presented here. I begin from the 1960s' perspective in which strategy was largely equated with corporate planning, describe the 1970s' emphasis on diversification and portfolio planning, and observe concern in the 1980s for concentration on the core business and the development of less analytic, more people-orientated approaches to management. I outline the conventional, now unfashionable, but nevertheless still dominant rationalist approach to strategic thinking--scan the environment, formulate the strategy, and then go on to secure its implementation. But I also register the principal criticisms made of that approach. A common view today is that the formulation of strategy is easy, but the real issues and problems are those of implementation, and that the conventionally prescriptive approach to strategy ignores the degree to which strategy in real businesses is emergent rather than directed.
I argue that this is a justified critique of standard approaches to strategy, but that these approaches are themselves based on a misconception of what strategy for a business really involves. Such criticisms are appropriately directed at a wish-driven view of strategy which emphasizes leadership, visions, and missions. If this is strategy, then it should be no surprise that formulation is easy and implementation difficult, and also unsurprising that such 'strategy' has limited impact on what operating businesses actually do. Meaningful strategy is not a statement of corporate aspirations, but is rooted in the distinctive capabilities of the individual firm. When strategy is emergent in this sense, the distinction between formulation and implementation largely falls away.
I also comment more generally on the nature of research and thinking in the field of strategy, and suggest that the inability to distinguish sufficiently clearly between taxonomy, deductive logic, and empirical observation is responsible for the limited progress which has been made in the