Developing Theories of Strategy Using Dominance Criteria

• Main Authors: M.J, TANG, Thomas, Howard
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1994
• Subjects: Business Administration, Management, and Operations
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3917
• Institution: Singapore Management University

This article identifies key features of the strategy concept as a basis for reviewing existing theories of strategy. It also provides an agenda for future research. the article argues that there is a decision hierarchy in a firm, and defines strategy as the highest-level decision in the hierarchy. Consequently, strategy has to exhibit what may be called three features of dominance: vertical dominance, horizontal dominance, and dynamic dominance. A vertically dominant strategy is one that determines, directly or indirectly, other decisions of a firm. A horizontally dominant strategy seeks to optimize the value of the firm according to some criteria. Dynamic dominance implies that strategy should affect the subsequent decisions of a firm over a relevant period of time. With few exceptions, existing theories of strategy are issue-oriented and focus largely on horizontal dominance. More research should, therefore, be directed towards vertical and dynamic dominance criteria. If a comprehensive theory of strategy which satisfies the three dominance features cannot be developed, it is suggested that development should be directed towards integrating behavioural and economic approaches.