Historical Evolution of Strategic Management and Business Policy started in 1911 at Harvard Business School. In 1911 HBS introduced an Integrative course in management to create general management capability. The base for introduction of this course was case studies used at the school for instructional purpose since 1908. Origin of the word Strategy can be observed in Greek word Strategos (from word Strategia) in 1680, meaning is General Army or Military commander. We can describe the Evolution of Strategic Management with the help of following key points.
Historical Evolution of Strategic Management & Business Policy
1911: Harvard Business School Introduced Course in Management
1959: Introduction of Business Policy in Academics
1969: The american assembly of Collegiate Schools of Business, a regulatory body for business schools, made the course of Business Policy a mandatory for the purpose of recognition
1980-2000: Business policy has become an integral part of Management Curriculum
The term Business Policy has been used traditionally till the end of 20th century. After that the new titles Strategic Management, Corporate Strategy and Policy have been used.
Evolution based on Managerial Practices
Use of plannings techniques by Managers can be observed an important part of development of the term Business Policy.
Along with day to day planning and practices, managers began planning for future, including budgets and other resources.
You can use following simple chart to understand the evolution of the term Strategic Management…
Short term planning (day to day) ——- replaced by —-> Long range Planning—–>
——> Long range planning———— replaced by ——>Strategic Planning——>
——> Strategic Planning—— replaced by——->Strategic Management
The term Strategic Management is now a days used to describe the process of Strategic Decision Making.
Four Paradigm Shifts
These four paradigm Shifts are given by Hofer and others
Phase I /Paradigm I: 1930 to 1960
– Paradigm of Ad hoc policy making
Phase II / Paradigm II
– Environmental changes from 1930 to 1940 in US — planned policy formulation replaced ad hoc policy making
– Based on this second paradigm, the emphasis shifted to the integration of functional areas in a rapidly changing environment.
Phase III / Paradigm III – 1960
Planned policy paradigm become irrelevant due to increased complexity and accelerating changes in the environment.
Demand for a critical look at the basic concept of business and its relationship with environment.
Phase IV / Paradigm IV – 1980 onward
Focus on two fields of enquiry:
1. The strategic processes of business firms
2. The responsibilities of general management