Stages in the Evolution of Strategic Thinking

Business governance and management have come a long way from alloting exclusive resources for financial gains at the detirment of everything else and much to the company workers' chagrin who didn't have a say when decisions had to be made. Creativity was stifled and perfunctory performance of chores was encouraged. Now new management models place much larger emphasis on human resources as a company's main asset and much more is invested in working staff qualification and employee satisfaction, in addition to an entire overhaul in the way that businessses used to be run.


Stage -1

Basic financial planning defined the whole idea of management. Preparing a report in the company's financial performance during the financial year was the main objective of companies in this stage. The organisation success relied heavily on the performance of the top management tier and their knowledge of products, markets and rival. Management by Objectives was the main school of thought to organisational administration at this time.

Stage - 2

A longer time horizon was embraced and a longer-term goal started to become part ofthe managerial scope. As companies gradually came to realise, in order to allow growth to proceed apace, it was necessary to expand upon their market forecast. So environment analysis and process standardisation were engendered by this need to predict more the future and steer the company in the desired direction. The Boston Consulting Group growth matrix attained prominance at this time and was used often as a benchmark for company growth and decline. The Boston Consulting Growth is usedin conjunction with the experience curve concept in order to explain the market place of a company and determine its next step according to the premise that every CEO wants his company to eventually achieve high market share while at the same time tapering down on their efforts and investments on the business growth.
 
Stage - 3

In the 1970s there was a move to the third phase of externally oriented planning. Competition review and analysis became the norm at the same time that dynamic resource allocation started to become a necessity due to numerous frameworks for strategic and market analysis. A framework of notice was the SWOT analysis (strengths and weknesses as internal forces while opportunities and threats are externalities that hold some sway over the company's strategic decisions.

Stage - 4


Strategic management became a stage in its own. Strategic frameworks became formally adopted and incorporated into organisational goals and missions, being a major source of influence in the company's organisational culture and identity. It was often desirable for companies to pick a framework that best fit their market profile in order to cut across organisational boundaries and provides facilities for decision-making processes. Decision also made a shift away from being exclusive to the top tier management, now including assembly line foremen and other staff members in managerial positions not part of the strategic level of management. Quantitative forecasting also started to make room for qualitative analysis. Market attractivity also became an issue in management with leaders scrambling to come up with solutions to attract a larger share of customers and to foster close relationships with suppliers. The Portter's Five Forces (threat of new entrants, threat of new products, bargaining power of suppliers and bargaining power of buyers and rivalry) was a common trend during this phase which as main priority the need to work on attractiveness of industry profitablity.

Stage - 5



Organisational culture and systemic thinking came as an answer to the lack of fulfilled expectations from the previous era. Coordenation of all resources towards the achievement of common goals became a commonly accepted approach as companies started to look outside for growth and prosperity, marking a complete break from purely financial motives. The external environment became an important point of interaction and contacts, giving rise to social and ecological concerns on the part of the company. Good governance practice also started to become widely adopted in light of accounting scandals. The rise of corporate governance was important in that companies needed to be in good standing with their stakeholders and could no longer rely on internal audits to report their fiscal performances and still be trusted. External audits and independent compliance requests were standardised