What is Strategic Management Really?

Summary of: Nag, S., Hambrick, D.C. & Chen, M-J. (2007). What is Strategic Management Really? Inductive Derivation of a Consensus Definition of the Field. Strategic Management Journal, 28, 935-955

WHAT IS STRATEGIC MANAGEMENT REALLY?

Strategic management represents a case of an academic field which consensual meaning might be expected to be fragile, even lacking. Its subjects of interest overlap with several other vigorous fields, including economics, sociology, marketing, finance and psychology. Espoused definitions of strategic management vary. However, there is a strong implicit consensus about the essence of the field, even though there may be ambiguity about its formal definition.

Objective: to identify the consensus definition – both implicit and explicit – or the very meaning of the field.

The field’s lack of interest in addressing the basic question: What is strategic management? Is noteworthy for two reasons:

1. The field’s identity, by its very nature, is ambiguous and highly contestable. It intersects with several other well-developed fields. Without a clear sense of collective identity and shared purpose, strategic management is vulnerable to intellectual and practical attack from these other fields.

2. The formally espouses, published definitions of the field are quite varied. Although these definitions are not flatly incompatible with each other, they are sufficiently diverse as to convey ambiguity in what the field of strategic management is all about, as well as how it differs from other closely related fields.

The social and linguistic view of science

A scientific field is a community of scholars who share a common identity and language. This can be used to identify the implicit definition, or the very essence of the field. A scholar’s explicit definition of the field may reflect his or her strongly held views, conscious assertions of what strategic management is, and even hints of where the field should be headed.
 

The authors came to the following definition of strategic management: ‘The field of strategic management deals with:

1. the major intended and emergent initiatives

2. taken by general managers on behalf of owners

3. involving utilization of resources

4. to enhance the performance

5. of firms

6. in their external environments

Later, a seventh element was added

7. Internal organization

Adjacent fields: The interchange that occurs between two groups lead to each one adopting some of the other’s perspective. It is in the process of competing over ideas that the two groups adopt perspectives and procedures from each other:

1. Economics: Economics tends to study firms as ‘fixed effects’ whereas strategic management thrives on firm-level idiosyncrasies.

2. Sociology: While economistic thinking is the central strand of strategic management, sociologists tend to emphasize how social relations and cultural elements affect organizational outcomes.

3. Marketing: The marketing perspective is rooted in understanding customers. Strategic management has a somewhat remote, simplistic view of these matters.

All groups heavily emphasized performance in their definitions, and all substantially noted ‘firms’ as the unit of analysis for the field.

Strategic management is held together by agreement on basic definition and purpose, but is also engaged in a wide and ever-shifting range of theoretical and practical explorations. Its amorphous boundaries and inherent pluralism act as a common ground for scholars to thrive as a community, without being constrained by a dominant theoretical or methodological strait-jacket.

Strategic management acts as an intellectual brokering entity, which thrives by enabling the simultaneous pursuit of multiple research orientations by members who hail from a wide variety of disciplinary and philosophical regimes. But these diverse community members seem, at the same time, to be linked by a fundamental implicit consensus that helps the field to cohere and maintain its identity.