SWINGS OF PENDULUM:

EARLY DVELOPMENT:

The roots of strategic management can be traced back to 1938 (Bernard presented

exposition of cooperation and organization in business firm). The early development of strategic

management thinking has been influenced by early classic’s detailed exposition of internal

factors of an organization.

EARLY THEORIES:

1962 was an important year for strategic management because of Chandler’s theory;

‘strategy and structure’. This theory explained the importance of mission and vision for

achieving long term strategic objectives.

Ansoff in his book’s preface (1965) wrote that his main focus was strategic decisions.

Andrew and his colleges considered business policy as the study of the functions and

responsibilities of general management. In 1969 Andrew gave a vague idea of whole strategic

management, including 4 components; market opportunities, firm’s competitiveness, manager’s

values and corporate social responsibility

Chandler, Ansoff and Andrew along with his colleges laid the foundation of present

theories of strategic management.

EARLY METHODOLOGIES:

During early years of management, it was only meant for managers and students who

wanted to be managers, Andrew and his colleges were unable to develop a generalized theory as

they considered every organization is different and cannot be led in same way. They used the

method of case studies rather than theories. Unlike Andrew and Ansoff, Chandler tried to

generalize theories.

THE SWING TOWARD INDUSTRY ORGANIZATION ECONOMICS:

Jeminson in 1981 proposed that management is combination of marketing, administrative

behavior and economics, but the swing of theories was towards economics only. Bain proposed

that IO view i.e. external factors and competitors’ knowledge is vital for organization. Porter

(1980, 1985) gave ‘five forces model’ supporting IO view. Porter, along with Carter, proposed

the idea of strategic groups (firms competing together in industry). Barney and Hoskisson

challenged the theory of strategic groups on two untested assertions, whether these groups exist

or not and whether a firm’s performance is influenced by these groups or not.

A SWING BACK TOWARDS THE ORGANIZATIONAL ECONIMICS:

The theory of transaction cost economics (why organizations exist) by Williamson (1975),

theory of M-for (success is dependent on internal factors of organization) and agency theory

(organization is owned and operated by different persons, which causes conflict of interests)

bought the interest to the hybrid of RB and IO view.

BACK TOWARDS THE STARTING POINT:

In 1994, RB view was rated the best view for management. The pendulum is swinging back to its

origin. The current theories of management ‘idea of organization’s distinctive competiveness’

(Selznick), is clearly related to RB view. Wernerfelt, (1984) suggested that evaluating firms in

terms of their resources can lead to an insight that differ from traditional perspective.

CONCLUSION:

Management is an ever increasing domain ad each swing towards or away from the firm,

leads to another aspect of management. Both views of management are equally important. The

current researches are based on the previous researches, rather than in contradiction of those

researches. The augmentation of theories is growing the sphere of strategic management.