Global Business Strategies based on Carl von Clausewitz’s Military Strategy
Carl von Clausewitz was a famous theorist of war who explains his principles of success and failure in his book On War. In this book Clausewitz documents philosophies that are more or less closely related to the Modern business strategies (Clausewitz, 2007). According to the analysis of his military strategies and the current business strategies, it offers an opportunity for managers in various global businesses to plan well. For instance, during the 18th century war, some of these strategies were applicable in dealing with competition of winning the war. This can be related to global business competitions that are apparent in the market today. Manages who want to improve their global business strategies might want to compare and relate Clausewitz war strategies and business strategies, same case to theories. This is bearing in mind that business strategies are about trying out new things to keep the business competitive. These strategies can cover issues of obtaining a bigger market share, expanding markets, launching new products and services and most of all gaining a competitive advantage. The main aim here is to become better than a competitor, just as Clausewitz uses the war principles to determine success of commanders where others failed (Laurie, 2001). According to Clausewitz a strategy could not be reduced to a formula instead, it requires broadest objectives and seizing of unforeseen objectives. He also asserted that a strategy was not an action plan but an evolution of an idea through a continuous change of circumstances (Clausewitz, 2007). The subject on this paper evaluates these statements in relation to global business context.
Linking War strategies and Business Strategies
The connection between the business strategy and Clausewitz’s war strategy can be understood by first linking some major elements. For instance, the term “war” can be used to mean a “business strategy” and “enemy” to mean competitors, “attack” to mean business maneuvers.” These terminologies are so easy to interchange which means it shows how comparative the two methods can function. When Von Clausewitz says war is an act of violence that compels the enemy to do our will, in the global business context it can be taken to mean a business maneuver that compels competitors to do their will. These maneuvering perspectives can be achieved through well designed business activities that are more or less similar to those of war (Ghyczy et.al, 2002). For instance, the business can employ strategic tactics to sway the minds of competitors to behave in a manner that is not their own. A global firm such as Coca-Cola can allocate its resources that causes it competitors also to divert their resources but to the firms advantage. Also one of the business activities that the firm will use is to collect enough information about their competitors. This can be done through market research, industry analysis, computer programs, credit scoring, and, financial relations among others. Information is a weapon to use to manipulate the actions of their competitors which in turn is expected to stem great returns. This is deemed a way through which global business firms can effectively control their compactors (Padmalatha, 2011).
Parallels between Business strategies and War strategies
Effective way of drawing parallels between war and business can be achieved through linking the various business models and war philosophies. In the business context, these models are related to the modern strategic management process. To focus on a process it requires speed, flexibility, quality, accuracy, cost and, service (Cengange Learning , 2007). According to Von Clausewitz just as the basic concepts of his military strategies governed successes in the battlefield, so will the competitive business strategies in the modern world. Competitive strategies just as war strategies require a process to ensure that they achieve maximum success. It first begins with establishment of direction through designing, missions and initiatives. The next steps for a business firm are to establish strategic competitiveness through maintaining competitiveness as well as, environment. Analyzing the competitor is also another way through which success can be achieved. This is made possible through strategy formulation, establishment of business level strategies and corporate level strategies. Competitive acts at the global businesses are noted to stem from highly influenced environmental factors both internal and external. These factors need to be evaluated in order to understand how competitors react or act towards competition. Factors in this case stem from elements such as, political, economic, demographic, legal, social-cultural, global and technological (Harrison & St. John, 2009). Although it is quite hard to control these factors, just as military men psychologically prepare themselves for war, a global business firm need to know potential influences that might hinder their business. Usually international businesses are hindered by brands, scale of economies, product differences and access to distribution networks. In the military context, there are three major factors that influence decision making. These form the main concern of the commander of the Army and the government. These can be applied in the business scenario in the sense that, employees and major stakeholders must deal with changes that come as a result of changes in the business strategic maneuvers. The work of the CEO can be compared to that of the Army commanders in terms of decision making. The rules and procedures that the commanders give to the soldiers at war, can be compared to rules and policies that govern a certain firm (Montgomery & Porter, 1991).
Components of an Organization Internal and External Environment
Elements exist within the internal environment that a firm needs to control. Firstly, the organization will attempt to understand the outside environment. This can be achieved through looking for information about stakeholders, customers and competitors. In the military case, these can be compared to enemies as competitors, customers as allies and stakeholders as the entire military force and the government. After obtaining the information about the external environment, the firm will use the information to rate the strengths, weaknesses, opportunities and threats of the firm and that of their competitors. The internal environment can be made of; the corporate structure, corporate resources, corporate culture, HRM, marketing, finance, operations and logistics among others. Some of the activities are required to strategize these move includes, carrying out value chain analysis of the company, going through the company profile and identifying their strategic position. Studying competitor’s information is a basis for the firm to come their own unique strategies that are more powerful than those of competitors. The first step is for competitors to analysis their internal strengths and weakness in a bid know where they can strategize. When global firms establish their strategic position, they take note of the company’s financial strengths hence, establishing competitive advantages with respect to environmental stability. Establishment of effective strategic positions is all about having procedures and process just as in the military. As the military take time to learn their assailants so is a firm by developing a strategic management process. The strategic processes also require the firm to combine evaluation process with effective management tools in order to strategically position it (Daft & Marcic, 2010).
A global business that does not have a clear purpose and intent makes it hard to direct its actions effectively. This is same case to a military battle; soldiers who are not prepared to win can not effectively coordinate their efforts towards winning a battle. The purpose of a business is mean to provide prosperity. According to Clausewitz, focus refers to a strategic intent (Clausewitz, 2007). Intent in this case, is deemed a very important element in determine appropriate actions. A global business with intent easily shapes its long term goals and objectives. This is as regard to where the firm wants to be in the near future. Just as the military changes its tactics during war to defeat their enemies, a global business firm also encourages creativity to keep abreast with changing conditions. Also just as the commanders motivate their soldiers to keep fighting, company executives motivate their employees to continue supporting the mission and vision of the organization. Clausewitz clearly gives procedures on the procedures needed to control and conquer competitors. Clausewitz, (2007) says “direct tactics at points that will do the most harm.” Strategic intent is deemed the most important element when dealing with competition. It is more or less like a guide in dealing with the most pressing issues.
Mission Statements in War and Business
Mission statements in business assist the firm’s employees to better understand the goals of the organization. In war, mission statements assist troops to know the purpose of the war and why they are doing so. A well established mission statement is known to provide a firm with a clear focus on long-term goals. Von Clausewitz is also in support of a well developed mission statement with clear purpose statement. Clausewitz mentions that having weak motives lead to army being swallowed by their enemies. Having a mission statement in both cases is a basis for explaining purpose and goals through which it was established. The overall strategy is developed basing on objectives developed from the mission statement. Just as in business, in war also troops also asks themselves questions such as what do we want to become in the long run – this makes a vision statement. A soldier would want to be viewed as a hero in the long run, while in business a firm would want to be rated in the top position as the leading, profit making as well as the market share (Seker, 2011).
Goals and principles
Goals and principles of a firm are established through the mission statement. Usually, the mission statement gives an explanation of what the firm intends to do. The goals are known to deal with how they are going to be accomplished. Business activities same cases to war members are expected to know very well what they are aiming at. Having an aim is makes it easy to direct efforts towards its accomplishments. In global business aims can be set in terms of targets. This is a strategy to avoid uncertainty and shifting of blames. Also, at the top level management it is responsible for achievable targets for the low level managers (Ghyczy et.al, 2002). For instance, without direction from the commander, the troops can easily be divided due to personal differences. Principles are used by a firm to guide their operations towards achievement of their goals. Effective setting of goals and objectives is a basis for restructuring the organization as well as determining the effective leadership style to adopt. This is same case to war scenario since; the commander can easily know the tactics to use for the armies to follow instructions to the letter. It is also useful in providing the right motivation as well as shaping behavior of employee towards achieving overall success of the organization (Alkhafaji, 2001).
Formulating a Strategy
Clausewitz proposes that, the best way to overthrow an enemy is to disarm him. As long as business is in existence, competition will continue to exist. Global businesses need formulation of growth strategies to deal with escalating issues of competition. Growth in this case includes, increasing the size and the capability of the firm with time. Competitive strategies are also useful in determining how others are also strategizing themselves (Hitt, Ireland, & Hoskisson, 2009). Just as in war businesses also need to disarm their enemies. To effectively do this, they need firm motives and valuable activities that prevent them from being compromised. The tactic of disarming an enemy or competitor has more information about him. Competitors can be overpowered through coming up with new and unique strategies that are beyond their reach. Internalization is an important aspect of strategy formulation. It is made up of important elements such as market drivers, cost, competitive and, government drivers. Multiple strategies are also another option of overpowering a competitor (Karami, 2007). In the military case, some tactics that are known to work well include invasion. Invasion in business may be aimed at damaging the potential of a competitor almost permanently. For instance, using superior strategies damages the ego of a competitor or introduction of a new strategy that the firm is sure the competitor cannot afford. Clausewitz also mentions wearing out an enemy as a strategy to disarm him. As the firm grows from one level to another, improvement should be maintained. This put the competitor on toes trying to catch up. This makes their chances of reaching the level of the firm slimmer. A number of approaches to sway the chances of a competitor are needed in this case. At times some strategies used in war can be applied to frustrate the efforts of a competitor. They include; wining over, neutralizing and, disabling the efforts of the competitor. In global business level, firms need to major in diverting the efforts of a competitor. A good example of such a strategy is where a firm thrusts or gambits. In many occasions, a competitor is forced to withdraw resources in ventures that are too complex for them. This paves way for a firm to expand its business further. This move is deemed a strategy for maintaining the competitive advantage in a global level. It also leaves the firm with strength of sweeping over almost the entire market share (John & Gillies, 1996).
Carl von Clausewitz strategies in war have showed great similarities with the modern business strategies. Currently, most businesses are going global due to heightening competition in business. To compete effectively in such a business environment requires effective strategies to stay competitive. It has been noted that there are many parallels that global business firms can emulate from Carl von Clausewitz war strategies. It all begins with having enough information about a competitor. This is a basis for disconnecting him from catching up with firm’s business strategies. The process of coming up with strategies in business are more or less the same as that of the army. It all begins with setting of goals and objectives, designing mission statements, and evaluating various strategies needed to conquer the enemies. The success of one company over the other is determined by effective strategies applied in ensuring growth. Many firms succeed through having effective leadership who will motivate and guide the employees towards accomplishments of goals.
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