12.2 Corporate strategy

The concept of corporate strategy has made a significant contribution to the advancement of management practice and theory over the past 30 years. Consulting in corporate strategy (business strategy, strategic analysis, strategic planning, strategic restructuring, etc.) is a rapidly growing area of management consulting. Some consultants have made corporate strategy their main or exclusive field of intervention. Consulting in corporate strategy has been strongly influenced by changing fads and fashions. During the 1970s there was a growing use of quantitative techniques and models, and strategic studies began to be dominated by young econometricians and operational researchers, with excellent education but often without business experience, and with little knowledge of people, or of social and other problems that determine strategy in reality. The following decade saw a welcome swing back to pragmatism.

A further development of the 1960s and 1970s was that many business firms created strategic planning units, and planning was seen as a distinct staff department function. The 1980s saw a strong swing away from such departments, which in any case rarely commanded the attention or respect of top management. It is now increasingly recognized that strategic planning is far too important to be left to planning staff, and that participation in the formulation of strategies is an intrinsic part of the work of senior management.

Even though the role of the planning department has diminished, however, the need for external consultants has increased. Senior operating executives always have some difficulty in stepping back from their immediate priorities and thinking about the longer term. Their workloads make it difficult for them to track all the developments in the company’s environment that need to be taken into account in the formulation of strategic plans, and it is notoriously difficult for them to make an honest evaluation of their organization’s weaknesses relative to competition. The consultant brings an open mind to these issues. Many boards of directors develop long-term relationships with consultants who advise them on strategy development, and clearly find such advice invaluable.