II. Discuss the meaning and importance of corporate strategy for a firm’s profit goals.
What explains the relative failure of most organizations to create effective strategy? Part of the problem is that corporations and their managers have great difficulty clearly and consistently defining what corporate strategy is, and much of that struggle can be traced to their interpretation of the word strategy itself.
The original meaning of the word strategy derives from the Geek strategia, which is used in the military terms and represents the ability to employ available resources to win a war. This interpretation has generated problems when such concept is used in a business context because it implies the existence, even the necessity, of opponents. As a result, most managers believed that a corporate strategy implies a strong focus on competition, since competition takes place almost exclusively at the offering level; most organizations concentrate their strategic efforts on constantly improving the goods and services they offer. This overemphasis on the temporary success, however, can often obscure the kind of thinking and emphasis that would lead to sustained success, even a continuous repetition of temporary successes doesn’t equate to sustainable strategy. In an effort to increase the value of single offerings, the organization may be distracted from larger questions of structure, mission and objective.
In war, objectives can often be clearly defined, and so strategy is thought of as a means to a specific end. This view has persisted in the corporate world where strategies are conceived as plans to accomplish specific goals. Although corporate strategy can be very goal-oriented, especially in the early stages of a company’s development, ...