Strategic Planning in Business Organizations

The classical view of management science regarded it as an incomplete science, particularly because management operates under many variables that are difficult to control and measure quantitatively. The circumstances surrounding today's organizations necessitate establishing criteria for formulating and controlling strategies toward continuity and stability. This has led to unprecedented developments in all administrative and technological fields, most notably the dynamism witnessed in the administrative domain to understand its mechanisms and evolution.

The classical view of management science regarded it as an incomplete science, particularly because management operates under many variables that are difficult to control and measure quantitatively. The circumstances surrounding today's organizations necessitate establishing criteria for formulating and controlling strategies toward continuity and stability. This has led to unprecedented developments in all administrative and technological fields, most notably the dynamism witnessed in the administrative domain to understand its mechanisms and evolution.

The world of the third millennium has become mercurial in nature, and the speed of change within it now demands organizations and managers of a special kind, capable of providing a future outlook to help the organization track changes in the internal and external environment. It is no surprise that strategy has become the safe haven for effectively confronting these variables.

Business policies adopted since the 1960s contributed to the development of the business concept simultaneously with the use of the strategy concept. The roots of strategy can be traced in many managerial and research literatures in the fields of industrial economics, finance, military affairs, and tactics (Anita M. Paley, 2009, 5).

Opinions on the essence of strategy have differed based on whether it is viewed in the applied or cognitive field on one hand, and on understanding its origins on the other. This is due to the differing perspectives of researchers regarding what it means to them and how they portray it as worthy of study to form an independent field of knowledge, after being merely a passing idea.

To grasp the meaning of strategy, it is necessary to refer to its historical development. The history of strategy's emergence dates back to before it appeared as an agreed-upon concept through natural competition that began since creation. The Russian biologist Gause (1934) indicated it as adaptation to the environment for survival, as most organisms struggle for that. The organisms most capable of adaptation are the most capable of continuity; therefore, they seek survival by adapting to their environment. This is called organic adaptation. Consequently, natural competition among living organisms is the historical root of strategy as an idea.

Based on the above premise, and to maintain the element of continuity amidst conflict, the practical applications of strategy emerged in military fields. It appears that the first references to its concept and uses were by the commander Miltiades when he defeated the Persian attack on the Greek cities of Eretria and Athens in 490 BC, as he chose unconventional paths in his movements to achieve decisive victories. Arabs defined strategy as "Al-Ighara" (raiding), a type of indirect attack during the wars of the Allies in World War I.

Strategy was also discussed by many writers such as Shakespeare and Montesquieu. Furthermore, conflict, whether at the individual or group level, may arise due to scarcity of resources and insufficient fulfillment of basic needs, which in turn drives groups or alliances to cooperate or dominate.

Economics emerged to solve these problems and mitigate their severity. If services were abundantly available and easily accessible, there would be no need for economics. The need for investments arises due to competition and choosing the best means to achieve it, represented here by what are called managerial strategies.

The field of research in organizational aspects related to strategy also witnessed notable progress in the 1950s, as a team of researchers at Harvard University viewed strategy as the art of the situation and an imaginative conception for integrating a set of complex and diverse decisions (Al-Fayyadh, 2006, 107).

The emergence of strategy can be understood by reviewing what Mintzberg (1994), a pioneer in strategies and strategic planning in business organizations, said in his book "The Rise and Fall of Strategic Planning." He believes that strategy dates back to the Chinese book titled "The Art of War" over 2400 years ago.

For several decades, in the 1920s, Harvard Business School developed the first model for strategic planning work. Between 1950 and 1960, strategy and strategic planning became a governing standard in the business world (Sharon Beth DeVivo, 2008, 8).