What Is Strategy

What is strategy?
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What is strategy?
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What is strategy?
About this free course
This free course is an adapted extract from the Open University

course B301 Making sense of strategy
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What is strategy?
Contents
 Introduction
 Learning outcomes
 1 Definition of strategy
 1.1 Three influential definitions of strategy
 1.2 Explaining vocabulary of strategy
 2 Five Ps of strategy
 2.1 Applying the five Ps to an example organisation
 2.2 Interrelating the Ps
 Conclusion
 Keep on learning
 References
 Further reading
 Acknowledgements
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Introduction
This free course comprises two parts. In the first part, the concept
of strategy is defined and the strategy-related vocabulary spanning
such terms as mission, vision, aims and objectives, and control is
introduced. The second part centres on Henry Mintzberg’s five Ps
framework, discussing the five different forms of strategy including
plan, ploy, pattern, position and perspective. A particular emphasis
is made on practitioner views of strategy as well as application of
its major theoretical advances in professional life.
This OpenLearn course is an adapted extract from the Open

University course B301 Making sense of strategy
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Learning outcomes
After studying this course, you should be able to:
 define the concept of strategy and its meaning to

practitioners
 explain the strategy vocabulary including such terms
as mission, vision, aims and objectives, and control
 apply Mintzberg’s 5 Ps framework to analyses of
strategy of an organisation.
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1 Definition of strategy
You’ll start the course with two activities. The first helps you to
generate some ideas about the word strategy.
Activity 2 will get you to look at the term strategy through the lens
of organisations.
Activity 1 First thoughts about strategy

Spend approximately 30 minutes on this activity.
People talk about strategy on a daily basis. It is the central term of

this course too. How would you define it? Try to explain it by using
different synonyms and examples from your life experience.
Provide your answer...
View discussion - Activity 1 First thoughts about strategy
Activity 2 Strategy of an organisation

Now try to explain the term strategy in regard to organisations.
View discussion - Activity 2 Strategy of an organisation
1.1 Three influential definitions of

strategy
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What is strategy?
Box 1 contains some quotations about strategy from some noted
thinkers on the subject.
Box 1 What people say about strategy

The determination of the basic long-term goals and objectives of
an enterprise, and the adoption of courses of action and the
allocation of resources necessary for those goals.
(Chandler, 1962, p. 13)
The strategic aim of a business is to earn a return on capital, and if

in any particular case the return in the long run is not satisfactory,
the deficiency should be corrected or the activity abandoned.
(Sloan, 1964, p. 49)
Essentially, developing a competitive strategy is developing a

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.
(Porter, 1980, p. xvi)
Each of the quotations in Box 1 emphasises different aspects of

strategy, but there are some common themes:
 Strategies concern the activities of organisations and

companies at a fundamental level – phrases like in the
long-run, long-term and at a broad level suggest that
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strategy addresses the really important issues facing
organisations.
 Strategy determines goals and objectives.
 It deliberately, and selectively, allocates resources in
order to achieve goals and objectives.
 It analyses what options are available to the
organisation, and chooses which to pursue.
 It takes place in a competitive environment where
some organisations succeed and others fail.
These themes of identifying what is fundamental to an

organisation, setting goals and objectives, allocating resources,
analysing situations, choosing between options and competing
effectively will recur throughout the study of strategy. This section
shows that they form the basis of a common understanding of
what strategy is.
One way of shedding light on the meaning of a term is to consider

its etymology – that is, its history as a word. The modern English
word ‘strategy’ comes from the ancient Greek word strategos (itself
a combination of the Greek for ‘army’ and ‘to lead’). So, its original
meaning derives from military leadership necessary to achieve
victory in war. The language people use to talk about strategy can
often be identified as having a military ring to it. Generals of armies
have always needed to take strategic decisions in conducting
wars. The warfare metaphor likens business leaders to military
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leaders, strategically guiding those whom they lead towards
success in the battle of market competition.
In Activity 3 you’ll start to interpret the vocabulary of strategy in a

personal way.
Activity 3 The vocabulary of strategy

Table 1 includes definitions of terms derived from warfare, which

are commonly used in strategy literature. Consider your current
personal circumstances and fill in the last column of the table for
yourself with an example from your everyday life. Then click
‘Reveal discussion’.
Interactive content is not available in this format.
Table 1 Relating strategic terms to personal circumstances
View discussion - Activity 3 The vocabulary of strategy
1.2 Explaining vocabulary of strategy

The mission, vision, goals, objectives and strategies of an
organisation will depend upon what kind of organisation it is, what
sector it is in and the ways in which the people in the organisation
make sense of its situation. Much can be learned about the
missions, visions, aims, objectives and strategies of individual
companies and organisations by accessing their company reports
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(often available online). Of course, organisations vary in their
terminology as well as their aspirations.
Mission
Some will have an explicit mission statement setting out their
overall purpose. For others this mission will be implicit. It is difficult
to envisage any organisation being successful without a shared
sense of purpose, however it is expressed. Effective mission
statements often specify what the organisation does, for whom and
how, in order to distinguish it from its competitors.
In Activity 4 you’ll start to develop a better understanding as to

what mission means for a strategist.
Activity 4 What do practitioners say about

mission?
Watch this video with Karan Bilimoria. How does he describe the
role of a mission in his company?
Video content is not available in this format.
Mission
View transcript - Mission
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Vision
A vision or strategic intent is a desired future state for the
organisation (for example, to be the leading supplier in its product
or service category). Some organisations use the terms ‘mission’
and ‘vision’ practically interchangeably, but it is useful to make a
distinction between mission as concerning current purpose, and
vision as focusing on the future. Vision or strategic intent is
essential to leadership, as a way of rallying members of an
organisation around a common cause (Kouzes and Posner, 2009).
In Activity 5 you’ll start to develop a better understanding of the

role of vision in strategies.
Activity 5 Compare what two practitioners say

about vision and its importance for their
strategic success
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Watch the two videos below. One is with Peggy Fleming, an

Olympic skater, and the other is with Merv Hillier, managing
director of Nuvision Consulting Group Inc. Compare what the two
practitioners say about vision and its importance to their strategic
success. Summarise your thoughts in Table 2.
Peggy Fleming
View transcript - Peggy Fleming
Merv Hillier
View transcript - Merv Hillier
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Interactive content is not available in this format.
Table 2 Importance of vision
View discussion - Activity 5 Compare what two practitioners say about

vision and its importance for ...
Aims and objectives

The terms ‘aims’ and ‘objectives’ are also sometimes used
interchangeably in how organisations talk about themselves. But
we can make a useful distinction between a general intention (aim)
and the subordinate objectives, which support its achievement.
Effective objectives are specific, measurable, agreed, realistic and
timed – the famous SMART acronym (though you will probably
encounter slightly different versions of what the letters stand for
from one business writer to another).
In Activity 6 you’ll start to learn how to set strategic objectives.
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Activity 6 How to set strategic objectives

Watch this video with Russell Yeomans. Explain what he thinks

about the role of strategic objectives. What does he recommend to
managers setting strategic objectives?
Strategic objectives
View transcript - Strategic objectives
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2 Five Ps of strategy
Five Ps framework presents another way of defining strategy. It
suggests that a strategy may be viewed as plan, ploy, pattern,
position, and perspective. Box 2 contains an extract from Henry
Mintzberg's 'Five Ps for strategy' (Mintzberg, 1996).
Box 2 Developing a better understanding of

strategy
Strategy as plan
To almost anyone you care to ask, strategy is a plan – some sort
of consciously intended course of action, a guideline (or set of
guidelines) to deal with a situation. A kid has a ‘strategy’ to get
over a fence; a corporation has one to capture a market. By this
definition, strategies have two essential characteristics: they are
made in advance of the actions to which they apply, and they are
developed consciously and purposefully. A host of definitions in a
variety of fields reinforce this view. For example:
 In the military: Strategy is concerned with ‘draft[ing] the

plan of war … shap[ing] the individual campaigns and
within these, decid[ing] on the individual
engagements’ (Von Clausewitz, 1976, p. 177)
 In game theory: Strategy is ‘a complete plan: a plan
which specifies what choices [the player] will make in
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every possible situation’ (von Newman and
Morgenstern, 1944, p. 79)
 In management: ‘Strategy is a unified, comprehensive,
and integrated plan … designed to ensure that the
basic objectives of the enterprise are achieved’
(Glueck, 1980, p. 9).
As plans, strategies may be general or they can be specific.
Strategy as ploy
As plan, a strategy can be a ploy; too, really just a specific
‘maneuver’ intended to outwit an opponent or competitor. The kid
may use the fence as a ploy to draw a bully into his yard, where
his Doberman pinscher awaits intruders. Likewise, a corporation
may threaten to expand plant capacity to discourage a competitor
from building a new plant. Here the real strategy (as plan, that is,
the real intention) is the threat, not the expansion itself, and as
such is a ploy.
Strategy as pattern
But if strategies can be intended (whether as general plans or
specific ploys), surely they can also be realized. In other words,
defining strategy as a plan is not sufficient; we also need a
definition that encompasses the resulting behaviour. Thus a third
definition is proposed: strategy is a pattern – specifically, a pattern
in a stream of actions (Mintzberg and Waters, 1985). By this
definition, when Picasso painted blue for a time, that was a
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strategy, just as was the behaviours of the Ford Motor Company
when Henry Ford offered his Model T only in black. In other words,
by this definition, strategy is consistency in behaviour, whether or
not intended.
This may sound like a strange definition for a word that has been
so bound up with free will (‘strategos’ in Greek, the art of the army
general [Evered 1983]). But the fact of the matter is that while
hardly anyone defines strategy in this way, many people seem at
one time or another to so use it. Consider this quotation from a
business executive: ‘Gradually the successful approaches merge
into a pattern of action that becomes our strategy. We certainly
don’t have an overall strategy on this’ (quoted in Quinn, 1980, p.
35). This comment is inconsistent only if we restrict ourselves to
one definition of strategy: what this man seems to be saying is that
his firm has strategy as pattern, but not as plan. Or consider this
comment in Business Week on a joint venture between General
Motors and Toyota:
The tentative Toyota deal may be most significant because it is

another example of how GM’s strategy boils down to doing a little
bit of everything until the market decides where it is going.
(Business Week, October 31, 1983)
A journalist has inferred a pattern in the behaviour of a corporation

and labelled it strategy.
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The point is that every time a journalist imputes a strategy to a
corporation or to a government, and every time a manager does
the same thing to a competitor or even to the senior management
of his own firm, they are implicitly defining strategy as pattern in
action– that is, inferring consistency in behaviour and labelling it
strategy. They may, of course, go further and impute intention to
that consistency – that is, assume there is a plan behind the
pattern. But that is an assumption, which may prove false.
Thus the definitions of strategy as plan and pattern can be quite

independent of each other: plans may go unrealized, while
patterns may appear without preconception. To paraphrase Hume,
strategies may result from human actions but not human designs
(see Majone, 1976–1977). If we label the first definition intended
strategy and the second realized strategy, as shown in Figure 1,
then we can distinguish deliberate strategies, where intentions that
existed previously were realized, from emergent strategies, where
patterns developed in the absence of intentions, or despite them
(which went unrealized).
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Figure 1 Deliberate and emergent strategies
For a strategy to be truly deliberate – that is, for a pattern to have

been intended exactly as realized – would seem to be a tall order.
Precise intentions would have had to be stated in advance by the
leadership of the organization; these would have had to be
accepted as is by everyone else, and then realized with no
interference by market, technological, or political forces and so on.
Likewise, a truly emergent strategy is again a tall order, requiring
consistency in action without any hint of intention. (No consistency
means no strategy, or at least unrealized strategy.)
Strategy as position
The fourth definition is that strategy is a position – specifically, a
means of locating an organization in what organization theorists
like to call an ‘environment.’ By this definition, strategy becomes
the mediating force – or ‘match,’ according to Hofer and Schendel
(1978, p. 4) – between organization and environment, that is,
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between the internal and the external context. In ecological terms,
strategy becomes a ‘niche’; in economic terms, a place that
generates −rent’ (that is ‘returns to [being] in a “unique” place’
(Bowman, 1974, p. 47)); in management terms, formally, a
product-market ‘domain’ (Thompson, 1967), the place in the
environment where resources are concentrated.
Note that this definition of strategy can be compatible with either

(or all) of the preceding ones; a position can be preselected and
aspired to through a plan (or ploy) and/or it can be reached,
perhaps even found, through a pattern of behaviour.
In military and game theory views of strategy, it is generally used

in the context of what is called a ‘two-person game,’ better known
in business as head-on competition (where ploys are especially
common). The definition of strategy as position, however, implicitly
allows us to open up the concept, to so-called n-person games
(that is, many players), and beyond. In other words, while position
can always be defined with respect to a single competitor (literally
so in the military, where position becomes the site of battle), it can
also be considered in the context of a number of competitors or
simply with respect to markets or an environment at large. But
strategy as position can extend beyond competition too, economic
and otherwise.
Indeed, what is the meaning of the word ‘niche’ but a position that
is occupied to avoid competition? Thus, we can move from the
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definition employed by General Ulysses Grant in the 1860s,
‘Strategy [is] the deployment of one’s resources in a manner which
is most likely to defeat the enemy,’ to that of Professor Richard
Rumelt in the 1980s, ‘Strategy is creating situations for economic
rents and finding ways to sustain them,’ (Rumelt, 1982) that is, any
viable position, whether or not directly competitive.
Astley and Fombrun (1983), in fact, take the next logical step by
introducing the notion of ‘collective’ strategy, that is, strategy
pursued to promote cooperation between organizations, even
would-be competitors (equivalent in biology to animals herding
together for protection). Such strategies can range ‘from informal
arrangements and discussions to formal devices such as
interlocking directorates, joint ventures, and mergers’ (p. 577). In
fact, considered from a slightly different angle, these can
sometimes be described as political strategies, that is strategies to
subvert the legitimate forces of competition.
Strategy as perspective
While the fourth definition of strategy looks out, seeking to locate
the organization in the external environment, and down to concrete
positions, the fifth looks inside the organization, indeed inside the
heads of the collective strategist, but up to a broader view. Here,
strategy is a perspective, its content consisting not just of a chosen
position, but of an ingrained way of perceiving the world. There are
organizations that favour marketing and build a whole ideology
around that (an IBM); Hewlett-Packard has developed the ‘H-P
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way,’ based on its engineering culture, while McDonald’s has
become famous for its emphasis on quality, service, and
cleanliness.
Strategy in this respect is to the organization what personality is to

the individual. Indeed, one of the earliest and most influential
writers on strategy (at least as his ideas have been reflected in
more popular writings) was Philip Selznick (1957, p. 47), who
wrote about the ‘character’ of an organization – distinct and
integrated ‘commitments to ways of acting and responding’ that
are built right into it. A variety of concepts from other field also
capture this notion; anthropologists refer to the ‘culture’ of a
society and sociologists to its ‘ideology’; military theorists write of
the ‘grand strategy’ of armies; while management theorists have
used terms such as the ‘theory of the business’ and its ‘driving
force’ (Drucker, 1974; Tregoe and Zimmerman, 1980); and
Germans perhaps capture its best with their word
‘Weltanschauung,’ literally ‘world view,’ meaning collective intuition
about how the world works.
This fifth definition suggests above all that strategy is a concept.

This has one important implication, namely, that all strategies are
abstractions which exist only in the minds of interested parties. It is
important to remember that no one has ever seen a strategy or
touched one; every strategy is an invention, a figment of
someone’s imagination, whether conceived of as intentions to
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regulate behaviour before it takes place or inferred as patterns to
describe behaviour that has already occurred.
What is of key importance about this fifth definition, however, is

that the perspective is shared. As implied in the words
Weltanschauung, culture, and ideology (with respect to a society),
but not the word personality, strategy is a perspective shared by
the members of an organization, through their intentions and/or by
their actions. In effect, when we are talking of strategy in this
context, we are entering the realm of the collective mind −
individuals united by common thinking and/or behaviour. A major
issue in the study of strategy formation becomes, therefore, how to
read that collective mind − to understand how intentions diffuse
through the system called organization to become shared and how
actions come to be exercised on a collective yet consistent basis.
(Mintzberg, 1996)
In Activity 7 you’ll start to develop a better understanding of five

facets of strategy.
Activity 7 Five Ps in practice

Think of the strategy of your past or future career path. Explain

when, how and why you referred or intend to refer to strategy as
plan, ploy, pattern, position and perspective. Show the interrelation
among five Ps of your strategy.
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2.1 Applying the five Ps to an example

organisation
If you have studied in higher education before, you might be
familiar with how course assignments often invite you to make use
of your experience and reading to illustrate, test or apply ideas.
This not only helps you to get hold of an idea, but can also throw
up interesting questions, which challenge that idea and
demonstrate its limitations – inspiring us to think critically. In Box 3,
The Open University (the OU) is used as an example organisation
to which Mintzberg’s five Ps can be related. As you read the
material, see if you can apply the arguments to any other
organisation you know.
Box 3 Using the OU as an example

Plan
As a large organisation, the OU has plenty of plans. These are
often expressed in documents, briefings and presentations, which
are circulated and updated regularly to ensure adequate
consultation and ‘ownership’ (i.e. to check that a wide range of
people in the organisation know about and feel responsible for the
plans). Different parts of the organisation periodically use these
plans to assess their progress by comparing what they have
actually achieved in comparison to what they planned to achieve.
For example, in areas like ‘inclusion’, meaning the social and
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cultural diversity of the student population; or ‘retention’, meaning
keeping students on track to finish a course or qualification.
Ploy
It’s important for any university to have a good reputation. The
deceptive ploys, mentioned in Mintzberg’s article, are not available
to the OU. But it can still manage its image by carefully selecting
what it wants to say about itself to its various publics. For example,
in order to maximise its attractiveness to funders the OU
emphasises achievements, notably in high profile areas such as
space science. Other areas, while no less important to the
university’s mission, will receive less public relations effort as they
are less newsworthy. This could be seen as a misrepresentation of
the university’s total activities (for example, if you are a researcher
doing internationally important work in a less glamorous area, you
might well feel the amount of attention some of your other
colleagues receive is unfair, or at least unbalanced). On the other
hand, it makes sense to put your media relations resources behind
stories with the best chance of gaining media coverage.
Pattern
An example of what Mintzberg called ‘consistency in behavior’
would be the OU’s policy of collaborating with local partners in
many international markets, rather than always going direct to
students (though this is also an option in a number of countries).
This is partly deliberate (in order to benefit from the local
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knowledge of the partner institution, and to support the
development of distance learning in a local context) and partly
emergent (in some countries, political and/or cultural factors would
make a direct route to students unfeasible). This strategy thus
shares characteristics from both ends of the continuum, which
Mintzberg presents in his Figure 1; it can be both an ‘intended’ (or
planned) strategy, centrally endorsed by the university, and an
‘emergent’ (or imposed) strategy, forced by political circumstances.
Position
Since its foundation in the 1960s, the OU has positioned itself as
an exclusively distance-learning establishment. As has already
been noted, the idea of ‘position’ is connected to military strategy.
In a battle, troops attack or defend a position. In a market,
competitors attack the market share of others and defend their
market share. While the appropriateness of talking about
education in terms of customers and markets may be debated, it
might be agreed that the OU’s viability cannot be separated from
its ability to attract students. As the number of distance-learning
providers increases, it is increasingly important for the OU to adopt
positions that are compatible with its changing circumstances.
Perspective
People who are new to the OU, either as staff or as students, often
take a while to get used to its way of doing things. It seems vastly
bureaucratic at times, and obsessed with set processes and
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procedures. But this can be seen as the practical consequence of
its ‘ingrained way of perceiving the world’, in Mintzberg’s phrase.
Its mission to be ‘open to people, places, methods and ideas’ (The
Open University, 2009), which means that it has to deal with very
large numbers of students and courses. While its critics may claim
that ‘the OU way’ is overly bureaucratic, supporters might counter
that the OU is committed to openness, which implies a necessary
degree of formality in its systems and speed of operation.
The five definitions on which Mintzberg draws thus act as a set of

themes around which perceptions of an organisation can be
shared, in order to understand it more clearly, and to evaluate its
strategies. Doing this might even allow the opportunity to envisage
and recommend better strategies. So the five Ps are a useful
checklist, based on what Mintzberg took to be the most influential
ways of defining strategy when he wrote his article. But, like any
organisation, the OU is bigger and more complex than any
checklist – even a comprehensive one like the five Ps.
2.2 Interrelating the Ps

The five Ps may be related. Their connection is discussed in Box
4.
Box 4 Connecting the five Ps

Strategy as both position and perspective can be compatible with
strategy as plan and/or pattern. In fact, the relationships between
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these different definitions can be more involved than that. For
example, while some consider perspective to be a plan (Lapierre,
1980, writes of strategies as ‘dreams in search of reality’), others
describe it as giving rise to plans (for example, as positions and/or
patterns in some kind of implicit hierarchy). But the concept of
emergent strategy is that a pattern can emerge and be recognized
so that it gives rise to a formal plan, perhaps within an overall
perspective.
We may ask how perspective arises in the first place. Probably

through earlier experiences: the organization tried various things in
its formative years and gradually consolidated a perspective
around what worked. In other words, organizations would appear
to develop ‘character’ much as people develop personality – by
interacting with the world as they find it through the use of their
innate skills and natural propensities. Thus pattern can give rise to
perspective too. And so can position. Witness Perrow’s (1970, p.
161) discussion of the ‘wool men’ and ‘silk men’ of the textile trade,
people who developed an almost religious dedication to the fibres
they produced.
No matter how they appear, however, there is reason to believe

that while plans and positions may be dispensable, perspectives
are immutable (Brunsson, 1982). In other words, once they are
established, perspectives become difficult to change. Indeed, a
perspective may become so deeply ingrained in the behaviour of
an organization that the associated beliefs can become
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subconscious in the minds of its members. When that happens,
perspective can come to look more like pattern than like plan – in
other words, it can be found more in the consistency of behaviours
than in the articulation of intentions.
Of course, if perspective is immutable, then change in plan and

position within perspective is easy compared to change of
perspective. In this regard, it is interesting to take up the case of
Egg McMuffin. Was this product when new – the American
breakfast in a bun – a strategic change for the McDonald’s fast-
food chain? Posed in MBA classes, this earth-shattering (or at
least stomach-shattering) question inevitably evokes heated
debate. Proponents (usually people sympathetic to fast food)
argue that of course it was: it brought McDonald’s into a new
market, the breakfast one, extending the use of existing facilities.
Opponents retort that this is nonsense; nothing changed but a few
ingredients: this was the same old pap in a new package.
(Mintzberg, 1996)
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Conclusion
In this course, the term strategy has been defined as well as major
terms in its vocabulary: mission, vision, aims and objectives.
Drawing on Mintzberg (1996), it showed that strategy may be
conceived of as a composite of five interrelated facets, namely,
plan, ploy, pattern, position and perspective.
Thinking about strategy is clearly a lot more complicated and

challenging than merely mastering a set of formulae or analytical
tools, which can be applied in order to guarantee success. Instead,
one of the interesting things about strategy is that it generates so
many controversial questions, which require us to synthesise our
other areas of knowledge and expertise, and acknowledge our
particular standpoints and situations. What academics and
practitioners argue as being appropriate strategy has a lot to do
with their convictions about how the world works and what they
see as important.
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What is strategy?
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What is strategy?
For reference, full URLs to pages listed above:
OpenLearn – www.open.edu/openlearn/free-courses
Visiting our online prospectus – www.open.ac.uk/courses
Access Courses – www.open.ac.uk/courses/do-it/access
Certificates – www.open.ac.uk/courses/certificates-he
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openlearn-newsletter
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What is strategy?
References
Astley, W.G. and Fombrun, C.J. (1983) ‘Collective strategy: Social
ecology of organizational environments’, Academy of Management
Review, vol. 8, no. 4, pp. 576–87.
Bowman, E.H. (1974) ‘Epistomology, corporate strategy, and

academe’, Sloan Management Review, vol. 15, no. 2, p. 47.
Business Week (1983) 31 October.
Chandler, A.D. (1962) Strategy and Structure, Cambridge, MA, MIT

Press.
Drucker, R.F. (1974) Management: Tasks, Responsibilities, Practices,

New York, NY: Harper & Row, p. 104.
Evered, P. (1983) ‘So what is strategy’, Long Range Planning, vol.

16, no. 3, pp. 57–72.
Franklin, B. (1977) Poor Richard’s Almanac, New York, NY:

Ballantine Books, p. 280.
Glueck, W.F. (1980) Business Policy and Strategic Management, 3rd

edn, New York, NY: McGraw-Hill, p. 9.
Hofer, C.W. and Schendel, D. (1978) Strategy Formulation:

Analytical Concepts, St. Paul, MN: West Publishing, p. 4.
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What is strategy?
Johnson, G., Scholes, K. and Whittington, R. (2008) Exploring
Corporate Strategy, 8th edn, Harlow, FT Prentice Hall.
Kouzes, J.M. and Posner, B.Z. (2009) ‘To lead, create a shared
vision’, Harvard Business Review, vol. 87, no. 1, January, p. 20–1.
Lapierre, L. (1980) ‘Le changement strategique: Un reve en quete

de reel’, Ph.D. Management Policy course paper, McGill University,
Canada.
Majone, G. (1976–1977) ‘The uses of policy analysis’ in The Future

and the Past: Essays on Programs, Russell Sage Foundation Annual
Report, pp. 201–20.
Mintzberg, H. and Waters, J.A. (1985) ‘Of strategies, deliberate

and emergent’, Strategic Management Journal, vol. 6, no. 3, pp. 257–
72.
Mintzberg, H. (1996) ‘Five ps for strategy’ in Mintzberg, H. and

Quinn, J.B. (1996) The Strategy Process, London, Prentice Hall.
The Open University (2009) ‘About the OU: our mission’ [Online].
Available at http://www.open.ac.uk/about/ou/p2.shtml (Accessed
25 March 2015).
Perrow, C. (1970) Organizational Analysis: A Sociological View.

Belmont, CA: Wadsworth, p. 161.
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What is strategy?
Porter, M.E. (1980) Competitive Strategy: Techniques for Analyzing
Industries and Competitors, New York, NY: The Free Press.
Quinn, J.B. (1980) Strategies for Change: Logical Incrementalism.

Homewood, IL: Richard D. Irwin, p. 35.
Rumelt, R.P. (1979) ‘Evaluation of strategy: Theory and models’ in

Schendel, D.E. and Hofer, C.W. (eds) Strategic Management: A New
View of Business Policy and Planning, Boston, MA: Little Brown, pp.
196–212.
Rumelt, R.P. (1982) Expressed at the Strategic Management Society

Conference, Paris, October 1982.
Schelling, T.C. (1980) The Strategy of Conflict, 2nd edn, Cambridge,

MA: Harvard University Press.
Selznick, P. (1957) Leadership in Administration: A Sociological

Interpretation, New York, NY: Harper & Row, p. 47.
Sloan, A.P. (1964) My Years with General Motors, in McDonald, J.

(ed.), New York, Doubleday.
Thompson, J.D. (1967) Organizations in Action, New York, NY:

McGraw-Hill.
Tregoe, B.B. and Zimmerman, J.W. (1980) Top Management

Strategy, New York, NY: Simon & Schuster.
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What is strategy?
Von Clausewitz, C. (1976) On War (trans. M. Howard and P.
Paret), Princeton, NJ: Princeton University Press.
Von Newmann, J. and Morgenstern, O. (1944) Theory of Games and

Economic Behavior, Princeton, NJ: Princeton University Press, p.
79.
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What is strategy?
Further reading
Chandler, A.D. (1962) Strategy and Structure, Cambridge, MA,
MITPress.
Johnson, G., Scholes, K. and Whittington, R. (2008) Exploring

Corporate Strategy, 8th edn, Harlow, FT Prentice Hall.
Kouzes, J.M. and Posner, B.Z. (2009) ‘To lead, create a shared
vision’, Harvard Business Review, vol. 87, no. 1, January, pp. 20–1.
Sloan, A.P. (1964) My Years with General Motors in McDonald, J.

(ed.), New York, Doubleday.
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What is strategy?
Acknowledgements
This course was written by Anna John.
Except for third party materials and otherwise stated in the

acknowledgements section, this content is made available under a
Creative Commons Attribution-NonCommercial-ShareAlike 4.0 Licence.
The material acknowledged below is Proprietary and used under

licence (not subject to Creative Commons Licence). Grateful
acknowledgement is made to the following sources for permission
to reproduce material in this course:
Course image: Cristian Bodnar in Flickr made available under

Creative Commons Attribution 2.0 Licence.
Activity 4: Extract from ‘Mission and vision’, featuring Karen

Bilimoria. Courtesy of Skillsoft: www.skillsoft.com
Activity 5: Extract from ‘Have a vision of the future’, featuring

Peggy Fleming. Courtesy of Skillsoft: www.skillsoft.com
Activity 5: Extract from ‘Without vision, companies will perish’,

featuring Merv Hillier. Courtesy of Skillsoft: www.skillsoft.com
Activity 6: Extract from ‘Simple frameworks for strategic direction’,

featuring Russell Yeomans, Deloitte Consulting (2011). Courtesy
of Skillsoft: www.skillsoft.com
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What is strategy?
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What is strategy?
Activity 1 First thoughts about

strategy
Discussion
How did you get on? Perhaps you wrote about something to do
with long-term planning or the overall direction of your activities.
Also, it is possible that you explained the word strategy by using
such words as mission, vision and path.
Back to Session 1 Activity 1
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What is strategy?
Activity 2 Strategy of an
organisation
Discussion
You might have written that strategy is about how an organisation
matches its internal strengths with external opportunities (e.g. a
small, high-quality bakery producing hand-crafted loaves at a
premium price rather than attempting to compete in the mass
market). You might have emphasised the way that strategy is
about a sense of purpose, even to the point where an organisation
will try to change its customers’ behaviour. This kind of mission
driven strategy is most commonly associated with non-profit-
making organisations, such as those in education and the arts. But
you can also find it in the commercial world. Think of the retailer
IKEA’s revolutionary approach to selling furniture and household
goods, which depends on its customers’ patient cooperation.
Another useful way to understand strategy, which you might have

mentioned, is to see it as a consistent pattern of behaviour in order
to achieve your objectives.
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What is strategy?
Activity 3 The vocabulary of

strategy
Discussion
Whatever you decided to write in the third column will obviously
depend on what you want to achieve in some area of your life, but
here are some possibilities based around a personal aspiration
that many people have had in recent years – to run a marathon:
 Mission – be healthy and fit.

 Vision or strategic intent – raise money for charity.
 Aim – to run a marathon (26.2 miles or 42 kilometres).
 Objectives – raise £3000 for charity and take part in
the London Marathon in two years’ time.
 Strategies – set up a fundraising page. Join an
athletics club. Go training every day. Eat a more
sensible diet.
 Control – monitor amount of donations made. Measure
the number of kilometres achieved each day. If
progress is satisfactory, carry on. If it is not, consider
other strategies and actions.
This is, of course, an example pitched at the personal level. But we

hope it works in this instance to help clarify the meaning of these
terms for you, as they apply to businesses and organisations, and
even to larger bodies at a national or international level.
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What is strategy?
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What is strategy?
Activity 5 Compare what two

practitioners say about vision and
its importance for their strategic
success
Discussion
How did you get on? Peggy Fleming and Merv Hillier present
different views of what vision is. To Peggy Fleming, vision is a
desired state in athletics. It played an important role as it gave a
strong impetus to her career as a skater. Ability to focus on the
vision helped to bring it to reality.
Likewise, Merv Hillier considers vision as a synonym of purpose. It

is essential because it helps to set the direction of an organisation.
Organisations may realise their vision by means of alignment of
strategy, structure and culture.
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What is strategy?
Mission
Transcript
[Music playing]
Karan Bilimoria:
I was very clear right from the beginning about what I wanted to do in terms of the
product. I knew exactly what this product was going to taste like. Not only did I know
the taste of the beer in my mind – it was very clear what I wanted to produce as a
product, although I knew nothing about brewing beer – I was also very clear about my
mission, my goal.
And the mission was to brew the finest ever Indian beer, and then make it a global
beer brand. And the two key words there – one is ‘finest’, and the other one’s
‘global’. So I knew that I’d have to get this product to be absolutely world-class, and
the best.
So the mission is very much the what. It’s measurable. It’s something you can go
back to. Our mission is the same today as it was on day one.
And I can always go back and say well, finest ever Indian beer? Yup. We’re winning
all the gold medals. We’re winning all the awards. We’re doing that. We’re achieving
that. Global beer brand? Yes, we’re working. How far have we gotten now in
becoming a global beer brand? So it’s great to have a mission, and great to know
where you’re going.
I believe, however, that equally as important as a mission – in fact, perhaps more
important – is to have a vision. And in my case, our vision fell into place when I was
on a course at Cranfield, at the Cranfield School of Management. And I did the
business growth programme there.
You’ve got to have a role model, I believe, when you’re starting up in business. Or
whatever you do in life, really, it helps to have a role model. And the closer that role
model can be to you – whether it’s your father, your brother, or family member is
ideal. But it can be anyone.
In my case, my role model was my great grandfather from my mother’s side in India.
And his motto was ‘to aspire and achieve’.
And throughout childhood, growing up, it meant nothing to me – like most school
mottos mean nothing to anyone. And it was when I was on this course at Cranfield,
where the course was a mini-MBA, the business growth programme, tailored to
owners of businesses. And it had all the formal strands of an MBA – finance,
management, marketing. And it was structured for business.
The course was very much about where is your business today? Where do you want to
take your business? And how are you going to get there? And my great grandfather’s
motto fell into place for me on that course.
Where do you want to take your business? Aspire. How are you going to get there?
Achieve. And I added, ‘to aspire and achieve against all odds with integrity’. And
that’s our vision, to aspire and achieve against all odds with integrity. That is what we
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What is strategy?
live by. That is what we breathe by every single day. That underlies everything that
we do.
And it’s almost a definition of entrepreneurship, where you come up with an idea with
limited resources. It’s against all odds. And you go out there, and you make it happen.
When you have a vision that really means something, that is something that you
genuinely believe in, and that underlies everything that you do, it’s something that
spreads across the whole company. It’s something that isn’t a motto that’s just on a
board or printed. It’s something that is a living vision that everyone in the company
believes in. It’s an attitude – to aspire and achieve.
And in our company, it manifests itself in so many areas, the way people come up
with ideas and make them happen. And it’s all about innovation and ideas and action.
Aspire and achieve. Ideas and action. Innovation – making it happen. And that’s what
it should be always.
[Music playing]
Back to Session 1 MediaContent 2
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What is strategy?
Peggy Fleming
Transcript
[Music playing]
Peggy Fleming:
Well, I think the toughest challenge I had as an athlete were my nerves. And I was a
real shy little girl, growing up. And for me to find the sport of figure skating at nine
years old gave me a confidence that I felt inside of me, because I could do something
easily, and I could do it well. Every time I’d go to practise, I would get better. And
that’s fun, for a young kid.
But my first competition I entered, I ended up winning. And I thought, well, that’s
easy. I wasn’t nervous at all. But then the second competition was, like, two weeks
later. And it was a totally different outcome.
I came in dead last, and I was embarrassed. I wasn’t even thinking about the
competition. I was just having fun. And I had the thrill of victory and the agony in
defeat in my first month as a competitor. And I think it set the tone of, like, the fun of
winning but the real agony of losing, because it’s very humiliating.
But then I started taking lessons and taking skating more seriously. And then I started
getting more nervous. And I would get so nervous I would get sick. And I couldn’t eat
all day long, or anything.
And I just still kept going to competitions. I still kept thinking that I can get over this.
And this was before sports psychologists were working with athletes. It was just my
own way of dealing with this problem, because you could be the best athlete in the
world, but if you can’t perform under the pressure and the nerves, no one will ever
know that.
So I knew I wanted to be the best. And I knew that I had to relax and had to use those
nerves in a better way than just getting sick. So over the years I did get better and
better at it. And it made me really focus when that feeling would start coming on, and
I’d go – I’d try to push it down. But it made me stronger by dealing with that and
learning about it by myself and not having a sports psychologist tell me how to do it. I
had to figure it out myself.
A competitor is somebody that goes out thinking positive about themselves. You
never go out there when they call your name and go, I hope I don’t fall. Well, you’re
probably going to fall, if you go out with that attitude. So you have to go out with the
attitude of positive thinking – that you can do it – and believe in yourself.
And I think that that was a good lesson for me, as a competitive athlete. But it’s still a
good lesson for me today. Whenever I approach a job or something that I’m a little
insecure about or I’m not sure that I can do, and I do get nervous about it, I do that
same routine with myself. I make myself calm down, think about all the positive
things that I have done in the past and that I do have the power to do it well, if I just
focus and concentrate on what I’m doing.
[Music playing]
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What is strategy?
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What is strategy?
Merv Hillier
Transcript
LES50NS Skillsoft [Music playing].
Merv Hillier:
I remember when I joined CMA Ontario back in 2007. And in my first week when I
joined, my management team came in to me and various individuals were very
pointed in their question, ‘Merv, what’s your plan for this organisation?’ And as I
dwelt on that question and thought, what are they really asking me? And when I
considered it, I put the question a different way to myself. I said, by asking me what’s
your plan for this organisation said to me that the organisation was of no purpose.
And so what they’re asking me is, we need to have a sense of purpose. And as we
looked at the organisation in the previous eight or nine years, it really didn’t have a
sense of purpose. It was fulfilling its mandate as a regulator, but it wasn’t really
exploiting or leveraging its capacity or its capabilities. So it wasn’t really motivated to
do anything more other than what was required of a regulator or an association.
So as I sat down, I said, OK, they’re looking for purpose. Now we call that in various
words – we call it vision, for example. And people are tired of hearing about vision –
you need a vision statement. And so I preferred we call it purpose. What is the
purpose of this organisation?
So I sat down with the management team. So it wasn’t just simply Merv Hillier. It
was Merv Hillier sitting down with the management team and said, let’s define what
our purpose for this organisation is going to be over the next five years. And so very
quickly came out, and we did the normal, which is here’s our vision statement, our
mission statement. But what’s our purpose as an organisation? Purpose to our
members, purpose to our stakeholders, purpose to our community? And how are we
supposed to execute that purpose successfully?
And so what we do is we defined a purpose for the organisation. Now was how are we
going to deliver on that? How we execute it? How do we communicate it? How do we
get people to buy into it?
And I remember going back to some early days as I was president of a packaging
company, seven years I spent in the consulting business. And now was time, really,
for me to execute on my own what I’ve been teaching others, especially when I was
going through consulting. And that is the alignment of strategy, organisational
structure, and culture.
There was a book that I consider to be probably one the best business books out there
for anybody to read. And it’s by Jim Collins, called Good to Great. And Jim Collins
talks about the flywheel effect. In other words, how do you get momentum in an
organisation? And in fact, what he was speaking to was the alignment of strategy,
organisational structure, and culture.
And so I looked at that and put a programme together for CMA and said, here’s our
direction, our purpose. And let’s outline it explicitly so our staff understands the
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What is strategy?
purpose of the organisation. Now let’s take a look at the structure. Now that doesn’t
mean, OK, what’s the organisational chart? But how do we do business here at CMA
Ontario?
And so we redefined what the structure of our organisation was and should be, as it
should support the strategic direction or purpose of the organisation. Now, there’s a
third element. There was the culture.
What is the culture of this organisation? Is it performance driven? Do we have an
effective performance measurement system in place? Do we have the resources that
we need in order to affect on the strategy and as we try to execute? Do we have the
mentality of coaching and mentoring our staff?
And as Collins said in his book as well – in fact, do we have the right people on the
bus? And if we don’t, unfortunately they have to be moved on. So we looked at it as a
management team. And we communicated this to our staff and said, here’s the
purpose. Here’s the structure we’re going to use that’s aligned to our purpose. And
here’s the culture that we’re going to put into place in order to make sure that we can
execute successfully.
So we aligned strategy, we aligned organisational structure, and we aligned culture so
that it was all working together. And again, if you go to Collins’ book, Good to Great,
he talks about the flywheel. And we created momentum.
We make sure as well that the board was aligned to management. And we assured that
the management was aligned to our staff, and that we were aligned to all of the
stakeholders that were affecting our business. And we did that through putting in
proper software, putting in systems, which is really the structure of the organisation.
And so that was 2007. So here we are, and we called it Vision 2012. So here we are
now moving towards, in a few months, the end of Vision 2012, 30 June. And I looked
back and said, how well did we do? So we had seven goals that were outlined. We
had this vision statement about being recognised as the best for what we do.
And you know, if you take a look at some of the traditional measures yet, we doubled
revenue in the space of four to five years. Four to five years ago, we were graduating
only 400–500 CMAs or accountants – management accountants. This fall, in October,
we’ll be graduating over 1100. Next year, we’ll be graduating over 1200 management
accountants.
That would make us the largest producer, or institution, or educator in graduating
management accountants, or accountants of any type, of any accounting body, CAs or
CGAs, in any jurisdiction in Canada. So we were, four to five years ago, at the bottom
of the list. We were only graduating 400–500. Our competition was graduating twice
that many.
This year, our competition has fallen way back. In fact, we’re almost doing 50 per
cent more than what they’re doing. And when I look at it and say – people say, ‘How
did you do that?’ They look at me, ‘How did you do that?’ And I thought, I didn’t do
anything.
What we did was put an organisation together that was focused on a sense of purpose.
What’s our purpose? We made sure that we communicated that purpose from the top
to shareholders, right down to the person that’s on the reception desk or in the storage
room. We made sure that they understood the purpose or the vision, they understood
how we’re going to do this, why we’re doing it, the resources that was required to do
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What is strategy?
it. And even to the point where we’ve been able to sustain over the last four years in
excess of $10 million of investment in this organisation that’s evident not only in our
physical facilities, but in our IT improvements.
We’ve doubled our staff from 30. Now we’ve got 95, close to 100 – all in the space of
four years. And people say, ‘How do you do it?’ I go back to the phrase, and it says,
without a vision, people perish.
If an organisation – or you individually. If you don’t have a sense of purpose in your
life, you’re going to drift. You’re going to be depressed. You’re not going to fulfil the
possibility that is yours as an individual. It’s the same as an organisation.
The capacity, the capability of this organisation is defined in your ability as an
individual to realise your own sense of purpose. And if I, as a leader, can create in you
a sense of purpose in this organisation that harnesses the potential that you have, and
then I bring that potential and get congruency of all the people in the organisation so
that we have organisational purpose, then, as Collins says, you’re going to create such
a momentum, that’s defined as the flywheel effect, that you will go from being good
or mediocre to being great. And that’s what happened at CMA Ontario, and I’m very
proud of it.
[Music playing]
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What is strategy?
Strategic objectives
Transcript
[Music playing]
Russell Yeomans:
Providing strategic direction can be easily over complicated. I’m a great believer in
frameworks – reasonably simplistic, easy to understand frameworks.
But ultimately, our strategic framework starts in what I would call a classic consulting
manner, really, about sort of working with managers to set what we call ‘the big,
hairy, audacious goal’.
So it’s spending that time, thinking three, four years ahead about where you could be.
Set the big goals. Have a bit of a reality check in terms of where you are. Look at
what options you’ve got. And constantly be analysing how you go in against those
objectives.
For us, our key contributor – which is probably similar to any professional services
firm – is net income per consultant – or co-member, as we call it. So what the goals
are within that.
And then building a strategic framework behind that. So those are your sort of big,
easy to articulate goals both financially and numbers-wise, etc.
And we’ve broken it down into four. I’ve worked with organisations that have worked
with up to 12, which I think is a bit too many. But key strategic objectives that again
should be able to be articulated in a consistent manner. And for us, it’s talked about
on a day-to-day basis through the business.
The first strategic objective is constantly driving up the NIPC figure.
The second strategic objective is all around head count. It’s the right head count at the
right time. It’s managing that head count well on an ongoing basis both in keeping
ahead of future hires, but also managing talent within the business. Because it’s not a
classic Jack Welch 15 per cent model, but it is important for us, for our business, or
current environment, that people have to hit minimum expectations to continue to
deserve to be part of our growth.
The third sort of key strategic initiative for us is customer first, communication and
collaboration. And then the fourth strategic direction for us is all around culture and
engagement. So how do we constantly create that environment that people are going
to be part of, that they feel a vital part of?
And that is consistent both on a international level, but also country by country. So
every office that we’ve got is working out what those strategic objectives mean for
them. And it’s a framework that’s reasonably easy to understand, that we don’t think
needs to be changed on an ongoing basis over the next couple of years.
I’m building an international business that’s growing at a fast rate. And I think when
you’ve got a fast-growth environment it does need a tweaking of maybe what the
long-term strategic direction is, because it is a high-growth environment. And there
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What is strategy?
will be a time to maybe moderate the behaviour of the organisation as you become
more established in various markets.
I think as far as the Reed organisation go, which is, I think, one of the key reasons we
attract people to us, is that Reed have been a 50-year-old family business that have
been operating with the same set of values throughout that time. To not necessarily be
the biggest, but wanting to be the best. To be fair and open and honest and innovative.
So there’s a core set of values that have stayed consistent over time, and I think that’s
really important, because I have worked previously with organisations whose ‘big,
hairy, audacious goals’ sort of things, they do change. And maybe there’s a three–five
year time frame for things like that.
But I think where values and strategic direction keep changing, anyone that’s been
there more than three or four years begins to get cynical, and struggle to sell those. So
it’s having that framework that can stand the test of time.
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 1.2 Explaining vocabulary of strategy

 2.2 Interrelating the Ps

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This OpenLearn course is an adapted extract from the Open

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 define the concept of strategy and its meaning to

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Activity 1 First thoughts about strategy

People talk about strategy on a daily basis. It is the central term of

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View discussion - Activity 1 First thoughts about strategy

Activity 2 Strategy of an organisation

Now try to explain the term strategy in regard to organisations.

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View discussion - Activity 2 Strategy of an organisation

1.1 Three influential definitions of

Box 1 What people say about strategy

(Chandler, 1962, p. 13)

The strategic aim of a business is to earn a return on capital, and if

(Sloan, 1964, p. 49)

Essentially, developing a competitive strategy is developing a

(Porter, 1980, p. xvi)

Each of the quotations in Box 1 emphasises different aspects of

 Strategies concern the activities of organisations and

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These themes of identifying what is fundamental to an

One way of shedding light on the meaning of a term is to consider

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In Activity 3 you’ll start to interpret the vocabulary of strategy in a

Activity 3 The vocabulary of strategy

Table 1 includes definitions of terms derived from warfare, which

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Table 1 Relating strategic terms to personal circumstances

View discussion - Activity 3 The vocabulary of strategy

1.2 Explaining vocabulary of strategy

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In Activity 4 you’ll start to develop a better understanding as to

Activity 4 What do practitioners say about

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View transcript - Mission

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Provide your answer...