Modern business strategy emerged as a field of study and practice in the 1960s; prior to that time, the words "strategy" and "competition" rarely appeared in the most prominent management literature.
Alfred Chandler wrote in 1962 that: "Strategy is the
determination of the basic long-term goals of an
enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals."
Michael Porter defined strategy in 1980 as the "...broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals" and the "...combination of the
ends (goals) for which the firm is striving and the
means (policies) by which it is seeking to get there." Complexity theorists define strategy as the unfolding of the internal and external aspects of the organization that results in actions in a socio-economic context.
Strategic Problem In 1998, Crouch defined the strategic problem as maintaining flexible relationships that can range from intense competition to harmonious cooperation among different players in a dynamic market. While Crouch was open to the idea of cooperation between players, his approach still emphasized that strategy is shaped by market conditions and organizational structure. This view aligns with the definitions of strategy proposed by Porter and Mintzberg. In contrast, Burnett regards strategy as a plan formulated through methodology in which the strategic problem encompasses six tasks: goal formulation, environmental analysis, strategy formulation, strategy evaluation, strategy implementation, and strategy control. The literature identifies two main sources for defining a strategic problem. The first is related to environmental factors, and the second focuses on the organizational context (Mukherji and Hurtado, 2001). These two sources summarize three dimensions originally proposed by Ansoff and Hayes (1981). According to them, a strategic problem arises from analysis of internal and external issues, the processes to solve them, and the variables involved. In Terra and Passador's view, organizations and the systems around them are tightly connected, so they rely on each other to survive. This means a strategy should balance being proactive and reactive. This involves recognizing the organization's impact on the environment and acting to minimize harm while adapting to new demands. The strategy should also align internal and external aspects of the organization and include all related entities. This helps build a complex socio-economic system where the organization is part of a sustainable ecosystem. The works of Stacey stand as pioneering efforts in applying complexity principles to the field of strategy. This author applied self-organization and chaos principles to describe strategy, organizational change dynamics, and learning. Their propositions advocate for strategy approached through choices and the evolutionary process of competitive selection. In this context, corrections of anomalies occur through actions involving negative feedback, while innovation and continuous change stem from actions guided by positive feedback. Dynamically, complexity in strategic management can be elucidated through the model of "Symbiotic Dynamics" by Terra and Passador. This model conceives the social organization of production as an interplay between two distinct systems existing in a symbiotic relationship while interconnected with the external environment. The organization's social network acts as a self-referential entity controlling the organization's life, while its technical structure resembles a purposeful "machine" supplying the social system by processing resources. These intertwined structures exchange disturbances and residues while interacting with the external world through their openness. Essentially, as the organization produces itself, it also hetero-produces, surviving through energy and resource flows across its subsystems. President
Kennedy illustrated these three elements of strategy in his
Cuban Missile Crisis Address to the Nation of 22 October 1962: • Diagnosis: "This Government, as promised, has maintained the closest surveillance of the Soviet military buildup on the island of Cuba. Within the past week, unmistakable evidence has established the fact that a series of offensive missile sites are now in preparation on that imprisoned island. The purpose of these bases can be none other than to provide a
nuclear strike capability against the Western Hemisphere." • Guiding Policy: "Our unswerving objective, therefore, must be to prevent the use of these missiles against this or any other country, and to secure their withdrawal or elimination from the Western Hemisphere." • Action Plans: First among seven numbered steps was the following: "To halt this offensive buildup a strict quarantine on all offensive military equipment under shipment to Cuba is being initiated. All ships of any kind bound for Cuba from whatever nation or port will, if found to contain cargoes of offensive weapons, be turned back." Rumelt wrote in 2011 that three important aspects of strategy include "premeditation, the anticipation of others' behavior, and the purposeful design of coordinated actions." He described strategy as solving a design problem, with trade-offs among various elements that must be arranged, adjusted and coordinated, rather than a plan or choice. ==Game theory==