who wrote that the firm is ‘an administrative organization and a collection of
productive resources’. It was expanded by Wernerfelt (1984), who explained
that strategy ‘is a balance between the exploitation of existing resources and
the development of new ones’. Resource-based strategy theorists such as
Barney (1991) argue that sustained competitive advantage stems from the
acquisition and effective use of bundles of distinctive resources that
competitors cannot imitate.
As Boxall (1996) comments, ‘Competitive success does not come simply
from making choices in the present; it stems from building up distinctive
capabilities over significant periods of time.’ Teece, Pisano and Shuen (1997)
define ‘dynamic capabilities’ as ‘the capacity of a firm to renew, augment and
adapt its core competences over time’.
Strategic management
The purpose of strategic management has been expressed by Rosabeth Moss
Kanter (1984) as being to ‘elicit the present actions for the future’ and become
‘action vehicles – integrating and institutionalizing mechanisms for change’.
Strategic management has been defined by Pearce and Robinson (1988) as
follows: ‘Strategic management is the set of decisions and actions resulting in
the formulation and implementation of strategies designed to achieve the
objectives of an organization.’
Strategic management has been described by Burns (1992) as being
primarily concerned with:
l the full scope of an organization’s activities, including corporate objec-
tives and organizational boundaries;l matching the activities of an organization to the environment in which it
operates;l ensuring that the internal structures, practices and procedures enable the
organization to achieve its objectives;l matching the activities of an organization to its resource capability,
assessing the extent to which sufficient resources can be provided to take
advantage of opportunities or to avoid threats in the organization’s envi-
ronment;l acquiring, divesting and reallocating resources;
l translating the complex and dynamic set of external and internal vari-
ables that an organization faces into a structured set of clear future objec-
tives that can then be implemented on a day-to-day basis.The focus is on identifying the organization’s mission and strategies, but
attention is also given to the resource base required to make it succeed.
Managers who think strategically will have a broad and long-term view of
26 l The conceptual framework of strategic HRM