Definition of Strategic Management in Ancient, Traditional, and Modern Organization: the Case of Sun Tzu and Patagonia

The concept of strategy can be traced back to ancient times, in which it was mostly related to warfare. Some of these ancient warfare strategy concepts are still being examined today. For instance, Sun Tzu’s book, The Art of War, which was written about 2500 years ago, has been used as a management text resource because it still provides relevant insight into business strategy (Macmillan & Tampoe, 2001). Examining the definition of strategic management through the ages is interesting since it may uncover how the perspective of strategy evolves over time.

Even modern strategic management tools such as SWOT analysis can be seen as a classic Sun Tzu strategy, which noted the importance of knowing yourself as well as your opponent (Kennedy, 2020). For Sun Tzu, strategic management is a means to defeat the enemy by fighting as few battles as possible. He even proposed the idea that winning without fighting is the best (Kennedy, 2020). This view mirrors how firms could try to win a new market while avoiding saturated industry competition, which was applied by Apple. While computer companies compete in a price war, Apple tried to develop unique features for its products that could attract a loyal set of customers (Kennedy, 2020).

While military thinking is a limited analogy to the realities of the modern business landscape, the perspective surely has relevance to business strategy. It emphasized winning from rivals, the importance of leadership, and taking action to accomplish desired outcomes are all of the themes that resonate with business reality (Macmillan & Tampoe, 2001).

In modern times, strategic management mainly examined the key question of why some companies outperform others (Kennedy, 2020). Hitt et al. (2020) define strategic management as a set of commitments, decisions, and actions of a company to achieve competitiveness and earn above-average returns.

Gluck et al. (1980) argued that strategic management is the latest evolution of formal strategic planning, progressing from basic financial planning, forecast-based planning, and externally oriented planning. In this view, strategic management is marked by the thoroughness with which management links strategic planning to operational decision-making.

Strategic Management of Patagonia

Patagonia is a well-known US-based outdoor apparel brand, but the most stand-out identity of Patagonia is its genuine efforts in supporting good causes, especially environmental causes. The company is committed to not only producing the best product but also to using the overall business to protect nature (Our Core Values – Patagonia, n.d.). Since the founding of the company, this commitment has been embodied in cuts of profits donated to environmental causes programs, switches to organic cotton, and various activism campaigns (Umapathy, 2020).

Strategic management for Patagonia may not only become a means to win the competition but winning through means that support the environment, instead of only taking benefit from it. This strategy can be easily appreciated by their primary customer target, the outdoor activity enthusiasts, which usually have high green awareness. The company’s activism campaigns, such as The Common Threads Initiative, are naturally praised by the people in this particular community. It has earned genuine love from the community, and the potential customers, by showing genuine concern and support for causes they really care about. This is how Patagonia win the competition without fighting with its direct competitors in the outdoor apparel industry.

While its strategy has gained fame throughout the years, Patagonia is facing financial troubles regarding these initiatives. Alkuwari (2021) highlighted that the company’s strategy may hurt its economic responsibility for being profitable, making them stuck between profitability and values. This is how a modern-day dynamic environment may provide unique challenges and opportunities for companies that may require a shift in their definition of strategic management.

References

Alkuwari, R. (2021). Patagonia Case Analysis from a Strategic Management & Corporate Responsibility Perspective. Newcastle Business School.

Gluck, F. W., Kaufman, S. P., & Walleck, A. S. (1980). Strategic Management for Competitive Advantage. Harvard Business Review. Retrieved June 18, 2022, from https://hbr.org/1980/07/strategic-management-for-competitive-advantage

Hitt, M. A., Ireland, D. R., & Hoskisson, R. E. (2020). Strategic Management: Concepts and Cases (13th ed.). Cengage Learning.

Kennedy, R. (2020). Strategic management. Virginia Tech Publishing. This book is licensed under a Creative Commons by-nc-sa 3.0 Attribution-NonCommercial-ShareAlike CC BY-NC-SA license.

Macmillan, H., & Tampoe, M. (2001). Strategic Management: Process, Content, and Implementation (1st ed.). Oxford University Press.

Our Core Values - Patagonia. (n.d.). Patagonia. Retrieved June 18, 2022, from https://www.patagonia.com/core-values/

Umapathy, A. (2020, February 12). 3 Business Sustainability Case Studies And Why They Worked. Purpose Rising. Retrieved June 18, 2022, from https://blog.repurpose.global/3-sustainability-initiatives-and-why-they-worked/