Some Definitions of Strategy and Tactics

Introduction

The terms "Strategy" and "Tactics" are widely used in books and articles about management. Sometimes they seem to mean the same thing and sometimes they seem to have completely different meanings. The goal of this page is to provide some clear definitions of the terms "Strategy" and "Tactics" from management theorists such as George Steiner, Henry Mintzberg, Michael Porter and Peter Drucker as well as some complementary views from other writers on the subject such as B. H. Liddell Hart and Thomas Schelling.

Strategy and Tactics as Military terms

Although "Strategy" and "Tactics" are defined in many different ways, there are some points on which all of the definitions agree: both terms were first used in the military and both are concerned with deciding the means used to achieve a specific goal. For a soldier, strategy is about deciding under which terms and conditions an army will fight a battle, where as tactics are about how best to organize an army during that battle. The military historian Liddell Hart defines strategy as,

"... the art of distributing and applying military means to fulfil the ends of policy"

As Fred Nickols observes, delete the word "military" from this definition and you have your first insight into how the concept of strategy is used the business world.

Strategy, Tactics and Decision Making

Both strategy and tactics are about deciding the means by which a goal is reached. The next step to finding a definition for tactics and strategy comes with knowing at what level strategic and tactical decisions are taken.

Decision making happens at all levels in an organization. Typically the grand overarching decisions about the future direction of the business are made right at the top of the organization, at board level; major decisions about what is needed to make that vision reality are taken at the next level down, and so on down the hierarchy with those at the very bottom of the pyramid taking decisions about how to best deal with their day to day tasks.

As with all attempts at categorization, the definitions can be somewhat arbitrary; however a typical split might be decisions related to Mission, Policy, Strategy, Tactics and Operations.

• Mission
  The mission is a vision, a statement of aim or purpose, for the business. It is the raison d'être, the reason the business is the way it is. Some typical questions one might ask at this level are: "Who are we?" "Why are we here?" "What do we do?"
   
• Policy
  A policy is a broad framework that shapes thinking and guides long term decision-making. Some typical questions one might ask at this level are: "What is happening in the wider social / business environment?" "What kind of company do we want to become / what kind of company must we become?"
   
• Strategy
  A strategy is concerned with the actions and resources needed to achieve specific long-term objectives. Some typical questions one might ask at this level are: "What conditions need to hold for our business to be viable?" "What products and services will we offer and to what customers?" "What capabilities and capacities will we require?"
   
• Tactics
  Tactics are concerned with the short to medium term co-ordination of activities and the deployment of resources needed to reach a particular strategic goal. Some typical questions one might ask at this level are: "What do we need to do to reach our growth / size / profitability goals?" "What are our competitors doing?" "What machines should we use?"
   
• Operations
  Operational activities are concerned with the immediate details of how a specific result will be achieved. Some typical questions one might ask at this level are: "What are the buying and selling criteria?" "How will we distribute our products / services?" "How do we collect data on our daily transactions?"

Looking at this classification, we can see that both strategy and tactics are about the means by which a goal is reached, not its specification. They are concerned with how one's aims are achieved, not with what those aims should be. Thus, both strategy and tactics are defined in relation to some wider goal. They are the bridge between the corporate mission and policy and concrete operational outcomes. However, the two are also closely related; one man's tactics is another strategy. To return to the military analogy, what is called strategy and what is described as tactics depends largely on where you are and what view you have of the battlefield.

Management Definitions of Strategy and Tactics

So far, we have been able to make broad and general statements about the meaning of the terms strategy and tactics. However, once we begin to look at specific definitions of strategy and tactics, this is no longer the case. Consequently we will restrict ourselves to some of the more important distinctions. Similarly, as tactics and strategy are closely related, we will refer mainly to definitions of strategy rather than tactics.

Corporate Strategy and Business Strategy

The first, and one of the most important, is the distinction between "Corporate Strategy", which determines the businesses in which a company will compete, and "Business Strategy", which defines the basis of competition for a given business.

Thus, Corporate Strategy is concerned with decisions at the level of the whole corporation: about which industry sector and markets to compete in; about growth, diversification or retrenchment; about acquisitions, new ventures and divestments.

Business Strategy on the other hand focuses on how a firm competes within a particular industry or market and is concerned with how to achieve a competitive advantage over rivals in that sector. It is about things such as cost leadership, differentiation and added value.

Some more management definitions of strategy

In his book Strategy Safari, Henry Mintzberg identified five different types of strategy:

• Strategy as a Plan
  Here strategy is defined as being a guide for a particular course of action. However, because the future is unknowable, it can only ever be an expression of intention, a proposal for a path between the current state and a desired future state. This view, pioneered by George Steiner, is one of the oldest and most common descriptions of strategy.
   
• Strategy as a Pattern
  Here the focus shifts away from original intention towards what actually happened. Strategies need to be modified as goals are adjusted to accommodate a changing reality. Consequently, strategy can only be understood in retrospect through an analysis of the patterns of past decisions and actions. This view is reflected in much of Mintzberg's other work.
   
• Strategy as Position
  Strategy is defined as a reflection of a decision to offer particular products or services in particular markets. Taking this view, strategy is determined primarily by what happens outside the firm among customers, suppliers and competitors; the role of the decision maker is to analyze and adjust to the competitive environment. This view is seen in the works of Michael Porter.
   
• Strategy as Perspective
  Here strategy is defined as a system of values and beliefs, generated and perpetuated by strategy makers; individuals or groups whose ideas shape the whole direction of the organization. It is their assumptions on which a business is built and which define what is considered to be meaningful and relevant. This view can be found within the works of Peter Drucker.
   
• Strategy as a Ploy
  Here strategy is seen as behavioural rather than perceptual. Strategy and tactics overlap and are defined as a manoeuvre to discourage or confuse a competitor. In this case, the intention is to change or prevent some supposed future outcome rather than to achieve it, plan for it or adapt to it. This view can be found in the works of Thomas Schelling.

Summary

Strategy and tactics are about means and ends: they bridge the gap between our vision of the future and our day to day decisions. They are not about deciding the vision but about how to achieve it; they have no existence beyond the ends that are sought by that vision. Tactics and strategy are also relative terms. What is seen as strategic from one viewpoint can be seen as tactical from another; they change to adapt to changing circumstances and with changes in the view of what means are required to reach a desired outcome.

However, although there are many definitions of strategy and the term itself is relative, the decisions are always the same: about resources and how to deploy them. Thus, ultimately the goal of strategy as a concept is to find a rigorous and systematic way of making these decisions.

References

B. H. Liddell Hart. Strategy, Eigal Meirovich, 2009

F. Nickols. Definitions and meaning of strategy.

H. Mintzberg. Strategy Safari: A Guided Tour Through the Wilds of Strategic Management, Financial Times, 1998

G. Steiner. Strategic Planning: What Every Manager Must Know, The Free Press, 1997

H. Mintzberg. The Strategy Process, Financial Times, 2002

M. Porter. Competitive Strategy: Techniques for Analyzing Industries and Competitors, The Free Press (reprint) 1980

P. F. Drucker. The Concept of the Corporation, Transaction Publishers, 1996

T. C. Schelling. The Strategy of Conflict, Harvard University Press, 1990