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EDITORIAL Editorial

Where do we fit in the swings

and roundabouts of strategy?
5
Abby Ghobadian
Henley Business School, Greenlands, UK, and
Nicholas O’Regan
Bristol Business School, Bristol, UK

Abstract
Purpose – The purpose of the paper is to examine and analyze the development of strategic
management as a field of inquiry.
Design/methodology/approach – The paper relies on secondary-source analysis.
Findings – Strategic management has evolved significantly over the past four decades and today it
is a well accepted and respected field of inquiry. In gaining academic acceptance, it has lost its
practitioner root and it relies too heavily on positivistic deductive research methods and economics as
the base discipline. The paper argues that it is time for a re-think.
Research limitations/implications – The paper argues for a more inclusive approach to strategic
management where inductive qualitative research drawing on base disciplines such as sociology,
political economy, psychology, behavioral economics play a significant role alongside positivistic
deductive approach mainly rooted in industrial or organizational economics.
Practical implications – To continue its impressive upward trajectory, strategic management
needs to pay more attention to relevance but not at the expense of rigour. Furthermore, strategic
management needs to embrace more issues of interest to practice such as implementation,
sustainability and regulation.
Originality/value – The paper provides an overview of developments in the field of strategic
management and to move forward it is important to have a good grasp of the past.
Keywords Strategic management, Management history, Continuing development,
Management research
Paper type Research paper

Introduction
Strategic management as a field of inquiry has travelled a long way in a comparatively
short period of time. The subject is no more than four decades old never-the-less it is
one of the more important and highly cited subjects and it forms a critical part of the
business and management curriculum at all levels. The business policy and strategy is
the second largest division of Academy of Management (AoM) attracting a large
number of papers annually. In the UK, the strategy related tracks at the British
Academy of Management (BAM) conference attract the largest number of papers.
Strategy is also an essential component of business practice. In the early 1960s, there
was little mention of strategy in company reports, whilst today it is difficult to find a Journal of Strategy and Management
Vol. 1 No. 1, 2008
company report without encountering the word strategy several times. Surveys of the pp. 5-14
usage of management tools indicate that strategic planning is the most heavily used q Emerald Group Publishing Limited
1755-425X
tool regardless of organisation size and location and that it enjoys a high level of DOI 10.1108/17554250810912721
JSMA satisfaction (Rigby and Bilodeau, 2007). Other strategy-related tools such as scenario
1,1 planning, core competencies, strategic alliances, mergers, and acquisitions also score
highly both in terms of intensity of use and level of satisfaction (Rigby and Bilodeau,
2007).
In the realm of politics and military affairs “strategy” dates back to Sun-Tzu
1000 BC, who is quoted saying that “All men can see the tactics whereby I conquer, but
6 what none can see is the strategy out of which victory is evolved”. According to
Bracker (1980), the word strategy comes from the Greek strategos, “a general”, which in
turn comes from roots meaning “army” and “lead”. The Greek verb stratego means
to “plan the destruction of one’s enemies through effective use of resources”.
Interestingly, there are communalities (leaving aside the use of harsh vocabulary)
between the meaning attributed to stratego and definitions proposed by Nag et al.
(2007), which are presented later in this paper.
Strategy was mentioned in the Old Testament and its underlying principles were
discussed by great writers and philosophers such as Homer, Euripides, Shakespeare,
Montesquieu, Kant, Mill, Hegel, Clausewitz, Liddell, Hart, and Tolstoy (Bracker, 1980).
According to Bracker (1980), the first known application of strategy occurred when
Socrates compared the duties of a general and businessman and showed that in either
case one plans the use of one’s resources to meet objectives.
Strategy continued to flourish in the military and political sphere but was largely
ignored in management and business spheres until 1911 when it made a comeback in
the guise of a capstone business policy course at Harvard taught by Arch Shaw
(Foss, 1997). The course integrated the overall points of functional courses and viewed
them from the perspective of the top management. Gordon and Howell (1959) in their
study of business school curriculum recommended that there should be a capstone
course in “business policy” to provide students the opportunity to integrate what they
have learnt in functional fields and make use of knowledge to analyse complex
business problems of a general manager. The reports into business and management
education in the UK by Constable and McCormick (1987), Handy (1998), and the
Council for Excellence in Management and Leadership (2002) all stress the importance
of strategy to business education and practice.
A number of scholars have examined the evolution of strategy as a field of inquiry.
These include: Mintzberg et al. (1999), Hoskisson et al. (1999), Phelan et al. (2002),
Ramos-Rodriguez and Ruiz-Navarro (2004), Herrmann (2005) and Nerur et al. (2008).
Hoskisson et al. (1999) used the metaphor of a pendulum to describe the evolution of
strategy as a field of study. According to them, strategy started with an inside-out
perspective with the firm as the unit of analysis, the pendulum then swung completely
the other way where outside-in and industry as the unit of analysis was in vogue. In the
next movement, the pendulum assumed a middle position with attention to the
boundary between the firm and outside, but the pendulum once again has swung back
to the inside-out perspective and the firm as the unit of analysis. Mintzberg et al. (1999)
identified ten schools of strategy making and traced the developments of each school.
They also identified changes in thinking and discussed the eclectic nature of strategy.
The aim of this paper is to articulate where this journal fits within this vibrant and
rapidly evolving field of inquiry. To address this question, it is necessary to briefly
review the field. A brief review is provided in the next section. This is followed by an
articulation of this journal’s aims.
Evolution of strategy Editorial
Previous attempts to examine the evolution of strategy have used a variety of
qualitative and quantitative techniques but almost in all cases developments have been
divided into time periods. We have adopted the time base approach in the review
presented here. We believe a field of inquiry goes through eight phases: pre-cursor;
foundation; transition, exploration; formation; verification; stability; and masterly.
In our view, the progress is not linear and there are loop backs between exploration and 7
transition or formation and transition, etc. Through this review, we attempt to identify
the stage which we believe strategic management has reached. Despite its significant
progress, we content that the subject has not reached the latter stages of progress.
In this review, we heavily draw on the work of Hoskisson et al. (1999) and Furrer et al.
(2008).
The pre-cursor stage in our view is the stage where the foundations of the subject
are established and successors draw on the ideas in creative ways to create a new field
of inquiry. The originators of ideas may or may not have foreseen how their ideas
might be used by successor scholars. Table I shows the key scholars whose work
published from 1930s to late 1950s has significantly influenced the developments of
field of strategy.
The foundation stage is where the genesis of a subject is established. It is widely
accepted that the key scholars of this stage included: Chandler (1962), Ansoff (1965),
Learned et al. (1965/1969) and Andrews (1971), for example, see Rumelt et al. (1984),
Hoskisson et al. (1999) and Furrer et al. (2008). These early writers showed how

Author Nature of influence

Barnard (1938) Focused on managerial processes and functions, and

Simon (1947) and Cyert and March (1963)
Selznick (1957)
Mason (1939) and Bain (1956)
Penrose (1959)
cooperation and organisation influenced the early
developments in strategy
They examined internal processes and
characteristics of the organisation such as
decision-making processes, hierarchical structures,
information-processing limitations, power and
coalition. The influence of their work is evident in
Ansoff’s (1965) corporate strategy and different
schools of strategy making
Emphasised the role of leadership and distinctive
competencies. This coincides with early scholars
focus on the internal strength of the organisation and
critical role of leader in development of strategy
They developed the structure-conduct-performance
(S-C-P) paradigm. Bain emphasised the primacy of
external environment and suggested that the
primary unit of analysis was the industry or
competing group of firms, rather than either the
individual firm or the economy wide aggregate of
enterprises. Their work provided the foundations for
Porter and strategic group scholars
Propagated the view that a firm is a collection of Table I.
productive resources and these in turn explain Influential scholars at the
differences in performance pre-cursor stage
JSMA strategy can influence organisations’ performance, the significance of internal
1,1 capabilities and external opportunities, the practical distinction between strategy
formulation and implementation, and critical roles of managers in plotting an
organisation’s course of action and affecting its competitiveness. The establishment of
the Long Range Planning (LRP) journal in the UK by Bernard Taylor in conjunction
with the Strategic Planning Society offered an outlet for researchers and practitioners
8 to disseminate their research and advanced the development of the subject. The
research approaches used during the foundation period were predominately normative
or prescriptive and deployed in-depth case analysis as the main research tool
(Hoskisson et al., 1999). Towards the mid-1970s strategy was running out of steam
mainly because of a heavy reliance on the case approach and a lack of generalisation
hampered its advancement. The resultant lack of progress led to the second phase that
we have termed as transition (Hoskisson et al., 1999).
Before discussing the transition phase, it is important to mention Schendel and
Hofer’s (1979) contribution to the field of strategic management. Their work re-named
the field Strategic Management and distanced it from business policy. It also
introduced a number of core concepts including a movement towards deductive
empiricism. The transition phase heralded the dominance of economics in the field of
strategy. Industrial organisational (IO) economics exerted a significant influence both
from a theoretical and methodological stand point. Porter (1980, 1985) is the most
influential contributor to the field of strategy drawing on IO economics (Hoskisson
et al., 1999; Furrer et al., 2008). Porter (1980) advanced Mason (1939) and Bain’s (1956)
work by more clearly identifying factors that influence an industry’s attractiveness.
The strategic management research during this phase of development moved towards
adopting more positivistic, deductive research methods and relying on traditional
econometric analysis tools. Interest in theory building and explanation and prediction
replaced prescription based on normative observations. The unit of analysis is the
industry.
The exploration phase followed quickly the transition phase drawing on
organisational economics which delves into the organisation instead of treating it as
a black box. The transaction cost economics logic is used to study multidivisional
form, international strategy, and hybrid form of forms, integration, and diversification.
Agency theory has been used to study innovation, corporate governance, and
diversification. The research methodology is predominately positivistic directed
towards deduction. The unit of analysis is the firm.
Before we move on to discuss the next phase, it is important to point out that the
introduction of Strategic Management Journal (SMJ), in 1980, played a significant role
in the development of strategic management as a respectable field of inquiry.
The next phase is formation. We equate this phase with the existence of commonly
shared goals, values and norms. Nag et al. (2007) suggests that strategic management
is a well formed discipline. We have termed the previous phase formation but it could
equally be termed transition because the resource-based view (RBV) – the current
dominant theory in the strategic management field – swings the pendulum back to an
inside-out view. The difference in the way firms combine resources account for
differences in their performance. Various sub-stream of RBV research focus specific
types of resources in a firm, for example, on strategic leadership or knowledge. The
unit of study here is the firm and RBV has re-introduced an inductive case-based
method focused on a single or multiple organisations to complement deductive Editorial
large-sample methods (Hoskisson et al., 1999). Table II summarises the development of
the field over the last four decades.
Nerur et al. (2008) traced the evolution of the strategy field from 1980 to 2000 using
the focus of various authors as unit of analysis. In the first period (1980-1987), they
identified five areas of research influenced by the organisational theory field, industrial
organisation, organisational economics, the process school and decision making, and 9
agency theory. In the second period (1987-1993), they identified eight areas mirroring
the growth of the field and the development of a larger number of sub-fields. The three
additional areas were research focusing on diversification, core competencies, and the
relationship between organisation and its environment. The third period (1994-2000)
showed relative stability in terms of factor. However, the influence of IO economics
was balanced by influences from RBV and organisational economics as theories of the
firm have become central to strategic management research.
Nerur et al. (2008) point out that financial and institutional economics (Williamson),
IO economics (Porter), process school (Mintzberg), and the power/resource dependence
school (Pfeffer) are the four dominant perspectives within the field.

The direction of the journal

Strategic management is a firmly established field in the study of business and
organisations and in a relatively short period of time the field has witnessed significant
growth in the diversity of topics and the variety of research methods employed
(Hoskisson et al., 1999).
Nag et al. (2007) imputed the following definition of strategy:
[. . .] the field of strategic management deals with the major intended and emergent initiatives
taken by general managers on behalf of owners, involving utilisation of resources, to enhance
the performance of firms in their external environments.
It is important to note that this definition identifies the firm as the unit of analysis and
emphasises performance.
The review of the development of strategic management presented in the previous
section and empirical research by Nerur et al. (2008) reflects the growing influence of
economic theories in the field of strategy. Yet, strategy is a multi-disciplinary field
drawing on a variety of other academic disciplines including economics, sociology,
psychology, finance, political economy, and marketing (Jemison, 1981; Michel and
Chen, 2004). The vitality of strategic management, according to Narg et al. (2008), is
due to the field’s intellectual content that consists of numerous conceptual elements,
thus allowing the exploration of a wide array of theoretical and practical issues.
Therefore, the dominance of economics can potentially affect the development of
strategy as a field of inquiry. The preponderance of leading journals to favour
positivistic deductive approaches is likely to exasperate the current polarisation.
Strategy started life with a high degree of practitioner orientation and the
theoretical perspective now hold sways (Nerur et al., 2008). Strategy is academically
more respected but arguably less relevant to needs of practicing managers. The
long-term success of the field and its journey towards the mastery stage depends on its
ability to successfully meet the twin hurdles of rigour and relevance. Ideally, practical
 1,1

10
JSMA

Table II.
Phases of development
Phase Key contributors Key concepts Dominant methodology

Foundation Chandler (1962) The relationship between growth and All three studies relied on inductive
(1960-1980) administrative structures and causality qualitative research. The emphasis was on
between strategic and administrative normative aspects of business knowledge
changes. The stimulus for strategic change is and identifying and developing the “best
the external environment and the carnage in practices” useful for managers. The objective
strategy requires a complementary change in was to offer prescriptive studies and to
structure develop practitioners and those who wish to
become managers and not necessarily pursue
scientific advancement. Generalisation was
not an important aim and the work. Chandler
relied on historical methods to study four
large firms. The comparative analysis offered
a degree of generalisation
Ansoff (1965) The focus of Ansoff’s work was on how to
make strategic decisions which he defined as
“decision on type of firm”. He identified four
key component for mapping the future of a
firm: product market scope; growth vector;
competitive advantage; and synergy
Learned et al. (1965/1969) and Andrews et al. stressed the need to match the
Andrews (1971) opportunities in the environment with what
firms is capable of doing at acceptable risk
and at the same time safeguarding the
weaknesses of the firm from outside threats.
They also suggested that corporate strategy
is composed of two interrelated, but
practically separated, aspects: formulation
and implementation
(continued)
Phase Key contributors Key concepts Dominant methodology

Transformation Porter (1980, 1985) Firm’s performance is primarily function of
1980s the industry environment in which it
competes
Exploration 1985 Williamson (1985) and Eisenhardt Transaction cost theory (TCE) focuses on
(1989) managerial behaviour and attributes of
transaction that affect modes of transaction.
Agency theory arguing that managers will
seek to maximise their own interest at the
expense of the shareholders
Formation 1990 Wernerfelt (1994) and Barney (1991) Attributes sustainable competitive advantage
on how firms combine resources. Resources
are valuable if they add value desired by
customers, rarity, inimitability, and
sustainability
Positivistic, deductive empirical research
combined with econometrics techniques to
explain and predict. Unit of analysis industry
Principally positivistic. Unit of analysis firm.
Focus the interface between firm and
environment
A combination of deductive methods using
large-scale data and sophisticated
multivariate analysis techniques and
inductive single or multi case methods. Unit
of analysis is firm
Editorial

11

Table II.
JSMA strategic advice should be based on systematic observation, sound deduction, and
1,1 strong theory.
Strategy and business policy is the second largest division of the AoM and strategy
related articles account for the largest number of articles at the BAM annual
conference. The field is served by a relatively few specialist journals and the general
management journals publish more strategy related research. However, given the level
12 of activity we argue that there is a need for another specialist journal.
Swings and roundabouts equally apply to the business environment. Learned et al.
(1965/1969, p. 15) stated that the challenge in formulation is to identify four essential
components of strategy: market opportunity; firm competence and resources;
manager’s personal values and aspirations; and obligations to segments of society
other than shareholders. The last point is particularly interesting because historically
latent stakeholders are assuming greater prominence and sustainability is becoming a
key strategic issue. Therefore, future successful strategies need to consider factors that
previously were of minor importance despite evidence to the contrary by leading
academics. Regulation is playing a greater role and managing regulators and requires
greater use of political science in the development of strategy.
Journals have played a key role in the development of strategic management as a
serious filed of inquiry. In this respect the SMJ and LRP journal in their different ways
have made invaluable contribution to the field and in many ways set the norms for the
transformation and transition/exploration phases. We believe this is an opportune
moment to introduce a new journal with a mission that complements SMJ and LRP’s
mission.
The aim of this journal is to fill the some of the gaps we have identified. In
particular, we aim to:
.
offer publication opportunity to strategy scholars who draw on fields other than
economics;
.
provide an outlet for both qualitative inductive and quantitative deductive
research in each case using a variety of methodologies including some novel
methodologies;
.
publish research that is both rigorous and relevant; and
.
encourage research in emerging new fields such as corporate social
responsibility, sustainability, regulation, etc; and
.
encourage submission by researchers in brick and other emerging economies to
ensure a broader coverage of strategy and a more multi-national development of
the subject.

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Further reading
Bain, J.S. (1968), Industrial Organisation, 2nd ed., Wiley, New York, NY.

Corresponding author
Abby Ghobadian can be contacted at: abby.ghobadian@henley.reading.ac.uk

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