Literature Review of Strategic Management

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Literature Review on Strategic Management with Emphasis on Porter’s Theories as Applied in Current Decision Making Abstract This review provides an overview of a few of the key topics that have defined the strategic management field since the later twentieth century. Strategic planning, strategic planning frameworks and strategy implementation issues are discussed both from a historical and modern perspective. Michael Porter’s frameworks and generic strategy provide an excellent backdrop for formulation of strategy but scholars argue that the current environment of business may require new or altered frameworks. A blended strategy of differentiation plus cost leadership may be possible within the new technology…show more content…
This often results in confusion and can undermine the credibility of the leader. The word strategy is derived from the Greek strategos, which means the art of the general. The business general must form a coherent strategy which is the sum of the parts of the organization. If this is not accomplished then mid level managers will focus time on their own priorities and the organization will risk fragmentation (Hambrick & Fredrickson, 2005). The origin of the subject of strategic management is heavily debated but H. Igor Ansoff is commonly noted as having significant influence in the field prior to Michael Porter whom took center stage in the 1980s (Martinet, 2010). Ansoff’s bestselling book titled Corporate Strategy was published in 1965 and started to transition the mindset from strategic planning to strategic management. Much of the current understanding of strategic management can be traced back to Porter’s (1985) low cost, differentiation, focus framework. His concepts marked a key transition point in the strategic management field by integrating organization specific factors into a model of firm performance (Parnell, 2006). According to Porter’s generic strategy, a firm can maximize performance by either being a low cost producer or differentiating its products or services from other businesses. Either of these strategies can be accomplished by focusing the organizations efforts on a segment of the market. Porter
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