The Historical Development of the Strategic Management Discipline

Introduction

As a field of study, strategy or strategic management is relatively recent. Its theoretical foundations come mainly from economics (economic theory, international economics) and industrial organization studies. Developments in industrial organization theory stress the importance of strategic behavior by firms. During the 1960s, organization researchers tried to understand organizational differences in functioning and performance. Three books are considered as “classic strategy books”: Chandler’s Strategy and Structure (1962), Ansoff’s Corporate Strategy (1965) and Learned, Christensen, Andrews and Guth’ Business Policy: Text and Cases (1969). When the 1960s gave rise to basic concepts of strategy, the 1970s provided important knowledge about their development and application.

Strategic management is a continuum of successive stages such as: critical analysis and diagnosis (internal and external levels), policy formulation (process of developing a strategy), implementation (process of executing a strategy) and then evaluation. In a world that is becoming ever more subject to change, the ability of major organizations to adapt rapidly and efficiently is a key component of corporate strategy. Strategic management has evolved to the point that its primary value is to help the organization to operate successfully in dynamic, complex environment and to deal with the increasingly uncertain future.

The purpose of this chapter is to explain the origins of strategic management. It highlights the different perspectives of strategy that have emerged from economics research. It gives a brief history of economics within strategic management. It addresses particularly the meaning of ‘strategy’ and ‘strategic management’. It describes a general overview of the evolving nature of the strategy discipline. Strategic management is a concept that has evolved over time and will continue to evolve.