STRATEGIC MANAGEMENT AND HUMAN RESOURCES 71100 metre dash), and socio-economic and regulatory conditions can alter the
balance between strength and weakness.
THE STRATEGIES OF FIRMS
In this context, thestrategiesof firms are their particular attempts to deal with
the strategic problems they face. They are the characteristic ways in which
the managers of firms understand their goals and develop resources—both
human and non-human—to reach them. Some strategies are better than oth-
ers in the context concerned: some address the problem of viability extremely
well and others are simply disastrous—with every shade of effectiveness in
between. The very best strategies are those which reach beyond the problem
of viability to master the ‘second order’ problem of sustained advantage.
In saying this, we should not make the mistake of equating the strategies of
firms with formal strategic plans. Following the ‘strategic choice’ perspective
(Child 1972), it is better if we understand the strategies of firms assetsofstrate-
gic choices, some of which might stem from planning exercises and set-piece
debates in senior management (in large firms), and some of which emerge in a
stream of action. The latter, called ‘emergent strategy’ by Mintzberg (1978), is
an inevitable feature of strategy. Once a firm commits to a particular strategy,
it is inevitable that the process of carrying it out involves learning which itself
will shape the strategy over time.
In defining a firm’s strategy as a set of strategic choices we are saying that it
includes critical choices about endsandmeans. A firm’s strategy contains ‘out-
ward’ and ‘inward’ elements (Figure 4.1). Firms face the problem of choosing
suitable goals and choosing and organizing appropriate resources to meet
them. In effect, our strategic choice definition draws on a ‘configurational’
or ‘gestalt’ perspective (Meyer, Tsui, and Hinings 1993; Miller 1981; Veliyath
and Srinavasan 1995). To be successful, firms need an effective configuration
of choices involving all the key dimensions of the business. At a minimum,
these include choices about competitive strategy (which markets to enter and
how to compete in them), financial strategy (how to fund the business over
time), operational strategy (what supplies, technology, and methods to use in
producing the goods or services), and HR strategy (how to recruit, organize,
and motivate the people needed now and over time).
A key issue associated with the strategic choice perspective is the question
of what we are implying about theextent of choiceavailable to firms. It is
widely accepted in the strategy literature that firms in some sectors enjoy
greater ‘degrees of freedom’ than others (Nelson 1991; Porter 1985). Some
environments are more benign—more ‘munificent’—than others (Pfeffer and
Salancik 1978). Some firms are heavily constrained by competitive forces
pushing them towards intense, margin-based competition (something sup-
pliers of supermarkets regularly complain about) while others enjoy a much