The Changing Shape of the Strategic Problem

Management is the creative and errorcorrecting activity that gives the firm its purpose, its cohesion, and assures satisfactory return on the investment. Thus, it can be said that the essence of management is creation, adaptation, and coping with change. Seen from the viewpoint of general management, there are two basic types of change. First are the fluctuations in the operating levels and conditions: in sales, profits, inventory, labour force, budgets, productive capacities etc. This kind of change expands and contracts the activities of the firm, but leaves the nature of the firm intact. The other type transforms the firm: its products, its markets, its technology. its culture, its systems, its structure, its relationships with governmental bodies. We shall refer to this second type as the 'strategic change'. It is the need for strategic change that caught the attention of management in the mid-1950s and led to today's pervasive concern with strategy. Strategy is a concept which is useful for perceiving the underlying patterns of managerial activity. It is also useful for giving guidance to the enterprisetransforming work. But it is a synthetic concept in the sense that strategies ascribed to organisations are frequently