Evolution of strategic management - Strategic Management

From his extensive work in the field, Bruce Henderson of the Boston Consulting Group concluded that intuitive strategies cannot be continued successfully if;

  1. The corporation becomes large,
  2. The layers of management increase, or
  3. The environment changes substantially.

Phases of Evolution of Strategic Management

The phases of evolution of strategic management are

Phase 1 - Basic financial planning: Seek better operational control by trying to meet budgets.
Phase 2 - Fore-cast based planning: Seeking more effective planning for growth by trying to predict the future beyond next year.
Phase 3 - Externally oriented planning (strategic planning): Seeking increasing responsiveness to markets and competition by trying to think strategically.
Phase 4 - Strategic management: Seeking a competitive advantage and a successful future by managing all resources. Phase 4 in the evolution of the strategic management includes a consideration of strategy implementation and evaluation and control, in addition to the emphasis on the strategic planning in Phase 3.

Concepts are often corrupted by the way that organisations use them, and problems that arise in practice are sometimes because of the way an approach is applied, and not the fault of the approach itself. It is also true to say any of the ‘new’ ideas, some of which move into common currency, are not as novel as the authors and readers believe. Many of the new thoughts of today are remarkably similar to many of the new ideas of the 1950s and 1960s. The strategic management literature can both enlighten and confuse for all these reasons.

Although many of the ideas appear to pull in different directions, there is often more agreement between authors than they themselves acknowledge. And if you take a contingency view, they are probably all appropriate some of the time. In this chapter tries we will try to sort out some of the strands which contribute to the role of modern thinking about strategy, and we will try to do this in a way that does not discard the old every time something new appears.

Strategic management is a modern concept, but is not the beginning of all thinking about business strategy. In the previous days, talking about the 1920’s till 1930’s, the managers used to work out the day-to-day planning method. Till this time they do not concentrated about the future work. However after this period, managers have tried to anticipate and predict about the future happenings. They started using tools like preparation of budgets and control systems like capital budgeting. However these techniques and tools also failed to emphasize the role of future adequately. Then long-range planning came into picture, giving the idea of planning for the long-term future. But it was soon replaced by Strategic planning and later by Strategic management-a term that is currently being used to describe the process of Strategic decision-making.

Land-Mark-contribution to the development of strategic management


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