Understanding the business context HR Management

The nature of business strategy

Boxall (1996) has commented that ‘any credible attempt at model-building in Strategic HRM involves taking a position on the difficult questions: What is Strategy? (content) & How is strategy formed? (process)’. It is the intention of this section to explore these questions, and identify the difficulties and complexities involved in the ‘strategy-making’ process. This section provides an overview of some of the issues and debates, and sets the context for the SHRM debate discussed later in the chapter.

It is not within the remit of this chapter, however, to provide a comprehensive review of strategic management theory. Readers are encouraged to seek further reading on strategic management, particularly if the material is completely new to them. The roots of business strategy stretch far back into history (Alexander the Great 356–323 BC, Julius Caesar 100–44 BC), and early writers linked the term ‘strategy’ to the ancient Greek word ‘strategos’, which means ‘general’ and has connotations of ‘to lead’ and ‘army’.

Thus it is not surprising that many dictionary definitions convey a military perspective: Early writings on business strategy adopted a military model combined with economics, particularly the notion of rational-economic man (Chandler, 1962; Sloan, 1963; Ansoff, 1965). This is known as the classical or rational-planning approach, and has influenced business thinking for many decades. The meaning of strategy has changed, however, and become more complex over the past 20 years or so, where the literature has moved from emphasising a long-term planning perspective (Chandler, 1962) to a more organic evolutionary process occupying a shorter time frame (Ansoff and McDonnell, 1990). Thus strategic management in the late 1990s, early 2000s is seen to be as much about vision and direction as about planning, mechanisms and structure.

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