2
The concept of strategy
Strategy was originally a military term, defined in the Oxford English
Dictionaryas: ‘The art of a commander-in-chief; the art of projecting and
directing the larger military movements and operations of a campaign.’
Commanders-in-chief and military campaigns do not exist in business, the
public sector or voluntary organizations, but at least this definition conveys
the messages that strategy is the ultimate responsibility of the head of the
organization, is an art and is concerned with projecting and directing large
movements.
It was Peter Drucker who long ago (1955) pointed out in The Practice of
Managementthe importance of strategic decisions, which he defined as ‘all
decisions on business objectives and on the means to reach them’.
However, the concept of business strategy was not fully developed until
three outstanding pioneers, Kenneth Andrews (1987), Igor Ansoff (1987) and
Alfred Chandler (1962) made their mark. They were followed by Michael
Porter (1985), Henry Mintzberg (1987), Hamel and Prahalad (1989) and
many more who further developed the concepts and adapted them to
contemporary conditions.
This chapter focuses on business strategy. It provides a bridge between the
basic concept of human resource management as covered in Chapter 1 and
strategic human resource management as described in Chapter 3. One of the
purposes of the chapter is to counter the belief that business strategy is a
highly rational affair that provides a firm basis for HR strategy. Business
strategy is in fact a far more intuitive, evolutionary and reactive process than
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