Chapter 1

1. Explain the origins of strategy and strategic management.

= Strategic management is a field of study that involves the process through which
firms define their missions, visions, goals, and objectives, as well as craft and
execute strategies at various levels of the firms’ hierarchies to create and sustain a
competitive advantage. It helps organizations to prioritize what is important for
them and provides a holistic view of an organization .Historic origins of strategies
management have been linked to the military. The word strategy comes from the
Greek strategos, which means “general”. In literal terms, it means “leader of the
army”. Military strategy deals with planning and execution in a war setting while
taking into consideration the strategy and tactics required to implement the plan. In
the hospitality and tourism domains, strategic management emerged as a field of
study in the mid- to late 1980s that aimed at applying the works of scholars in the
strategic management domain to hospitality organizations. Most of these efforts
aimed at confirming theories related to the contingency, strategic planning, and
competitive strategies.
2. List the main schools of thought, and explain their premises on strategic
management.
 First Design School purports a fit between an organizations internal
capabilities and external opportunities. This school emphasises the
importance of a firms position within the context in which it operates. The
environment is used as a reference while gauging the firms strategies, and the
emphasis is on how it develops its structure in order to support the strategy.
Strategy creation and implementation were considered two distinct stages in
the strategic management process.
 Second School Planning which developed in the 1970s conceptualized
strategy to include a structured, step-by-step approach. Mission and vision
statements were set, and goals were clearly spelled out while detailing the
objectives that would lead to the accomplishments of those goals. Note that
goals and strategies were clearly differentiated under this approach. An
environment assessment included forescasts and scenario analysis. The
 strengths, weaknesses, opportunities, and threats (SWOT) analysis was part
of this process, and it gave the firm an overview of the various factors it had
to deal with in a given context.
 Third School is positioning, which developed in the 1980s. Although it is not
very different from the planning and design schools, it views strategy
formation as consisting of a few strategy types. This school emerged from the
work of Porter (1980), with an emphasis on strategy typologies. Strategy was
still conceptualized as a formal and controlled process, but the focus here
was on competitive strategies and industry structure. As the term suggests,
generic strategies were applicable to firms within and across industries.
Mintzberg and his colleagues describe the emergence of positioning school as
part of “three waves”.
 Fourth school is the entrepreneurial school, which pertains to decision
making and the process of strategy formation. Here, the central role of
strategy formation lies with the leader, whose “instuitions, judgement
wisdom, experience and insight” are at the heart of the decision making.
Mintzberg and his colleagues describe this school as both “deliberate” and
“emergent,” thereby emphasizing the leader’s experience, while at the same
thing being adaptive to the changing environment of the business.
 Fifth School Cognitive, it emphasizes strategy formation from the perspective
that the decision maker’s cognition and mind drive strategy making. The
cognitive skills of managers influence their perspective of how they perceive
the environment. These perspectives in turn influence the strategy formation
process. According to Mintzberg and his colleagues, they include “concepts,
maps, schemas, and frames. “ This school is still emerging in terms of
philosophy and contibutions to the field.
 Sixth School is learning, which supports the notion that strategy making is
based on a foundation learning. The strategy maker is constantly learning
about the process of strategy formation and its various elements in a complex
environment. In fact, the firm is learning constantly as a whole, which is
incremental and continuous in a complex business environment . The
knowledge perspective is part of the learning school , and the focus here is
on the system as a whole rather than only a few managers at the helm of
decision making.