The Evolution of

Strategic Management
T. Hani Handoko, Ph.D
Faculty of Economics and Business UGM

The History of
Strategic Management Course (1)
1912-Harvard Business School (HBS) introduced the
course of Administrative (Business) Policy for the
first time.
Interactive discussion between executives and students to
discuss business and management issues, both strategic
and operational, find solutions introducing case method
The concept of general management and administrative
point of view

1946-HBS revised its curriculum and the course of

Business Policy (BP) became compulsory.
BP became a capstone course
2

The History of
Strategic Management Course (2)
1959-The Study of Gordon and Howell (1959)
recommended Strategic Management to be
an integrating course in the curriculum of
business education.
Late 1970s-The course of Strategic
Management officially announced, and in
the year of 1981 the Strategic Management
Society was founded.
3

The Short History of

Strategic Management
1940s-Budgetting and Financial Objectives
1950s-Long-Range Planning and Formal Models
1960s-Growth and Business Scope, and Corporate
Identity
1970s-Analysis of Competitive Advantage
1980s-Strategy Implementation, Capability-Based
Strategy, and Strategic alignment
1990s-Strategic Leadership and Strategic Change
2000s-Dynamic Strategy Making and Continuous
Renewal
Sumber: Greiner, Bhambri, dan Cummings (2003)
4

The Evolution of Strategic Management

Period
Dominant
theme

1950s

1960s

1970s

Budgetary planning
and control

Corporate planning

Corporate strategy

Planning growth

Portfolio planning

Main Focus

Financial control
through operating
budgets

Principal
concepts and
techniques

Financial
budgeting
Investment
planning
Project appraisal

Market forecasting
Diversification
Analysis of synergy

SBU as unit of analysis

Portfolio planning
matrices
Analysis of experience
curve and returns to
market share

Financial
management as key
corporate function

Development of
corporate planning
departments
Rise of
conglomerates
Diffusion of M-form

Integration of financial
& strategic control
Strategy as dialogue
between corporate
HQ and the divisions

Organizational
implications

The Evolution of Strategic Management

Period
Dominant
theme
Main focus

Late 1970s and

early 1980s

Late 1980s and

early 1990s

Analysis of industry and The quest of competitive

competition
advantage
Choice of industries,
markets, and
segments, and
positioning within them

Analysis of industry
structure
Principal
concepts and Competitor analysis
techniques Analysis of strategic
group

Late 1990s
The development of competencies

Analysis of sources of
Analysis of acquisition, utilization,
competitive advantage
and deployment of resources,
within the firm, and dynamic assets, capabilities and skills
aspects of strategy
Resource analysis
Analysis of organizational
capability
Analysis of customer
values
Analysis of speed and
responsiveness

Divestment of
Corporate restructuring
unattractive business
and Business Process
Organizational
units
Reengineering
implications
Active asset
Building capabilities
management
through MIS, HRM,
strategic alliances,
organizational forms

Analysis of competence
leveraging
Analysis of competence building
Analysis of cognition in
managing competencies
Organizational learning
Building strategic vision
Developing organizational and
managerial cognition
Creating and managing
knowledge
Building organizational/strategic
learning capabilities
6

Are You a Strategist or Just a Manager?

Do I have a strategic vision?
Do I have a corporate philosophy?
Do I have competitive advantages?
Do my employees use their ability to act freely in the
interest of the company?
Have I built an organization that implements the vision
and strategy?
Are the line managers involved in the process of
strategic management?
Is the corporate culture, structure, and systems in
alignment with the strategies?
Do I point out directions and take new approaches?
Have I been lucky in my life so far?
Do I make a contribution to the development of society
and myself?
Source: Hinterhuber & Popp (1992)