Deep Roots: A History of Strategic Management

As this is the first “spotlight on strategic management” feature to appear in Business Horizons, it seems important to begin with a brief history of how the field developed before progressing on to an examination of current foci and future issues of potential importance. The field of strategic management has advanced substantially in both the theoretical domain and empirical research over the last 25 years. While the roots of the field can perhaps be traced back as early as 320 BC to the work of Sun Tsu, the evolution of the field in the last few decades has been dramatic (Hitt, Boyd, & Li, 2004). Recent work traced the intellectual structure of the field over the period 1980—2000 (Ramos- Rodriguez & Ruiz-Navarro, 2004). Some of the most cited works represent particular perspectives such as industrial organization economics (Porter, 1980, 1985), corporate strategy-product diversification (Chandler, 1962; Rumelt, 1974), transaction cost economics (Williamson, 1975), evolutionary economics (Nelson & Winter, 1982), resource dependence (Pfeffer & Salancik, 1978), and the behavioral theory of the firm (Cyert & March, 1963).
While agency theory and transaction cost economics have played prominent roles in building our understanding of executive and firm behavior, industrial organization economics and the resource- based view of the firm (RBV) have dominated much of the research and thinking in the field over the past 25 years (Ramos-Rodriguez & Ruiz- Navarro, 2004; Wright, Filatotchev, Hoskisson, & Teng, 2005). Much of the work in the decade of the 1980s used the structure-conduct-performance approach ushered in by Porter (1980, 1985) or the strategy-structure-performance focus explained in a review article by Hoskisson and Hitt (1990). Research in the 1990s and 2000s, however, has been dominated by the RBV (Barney, 1991, 2001). During the 1990s and since, rich streams of research emerged in such areas as competitive strategy (D’Aveni, 1994; Gimeno, 2004), corporate governance (Daily, Dalton, & Rajagopalan, 2003; Hoskisson, Hitt, Johnson, & Grossman, 2002), international strategy (Lu & Beamish, 2004; Penner- Hahn & Shaver, 2005; Tallman, 2001), strategic leadership (Finkelstein & Hambrick, 1996; Hambrick & Cannella, 2004), and dynamic capabilities (Helfat & Peteraf, 2003; Teece, Pisano, & Shuen, 1997; Winter, 2003). Emerging areas of strategic management research include strategic entrepreneurship (Amit & Zott, 2001; Hitt, Ireland, Camp, & Sexton, 2001; Hitt, Ireland, Camp, & Sexton, 2002), strategy process (Chakravarthy, Mueller-Stewens, Lorange, & Lechner, 2003; Floyd, Roos, Jacobs, & Kellermanns, 2004), and network strategies (Dyer & Singh, 1998; Gulati & Singh, 1998; Ireland, Hitt, & Vaidyanth, 2002). The resource-based view of the firm, or RBV theory, is evident in much of this research, and other theoretical domains such as organizational learning have been incorporated into areas of research such as international strategy (Hitt, Hoskisson, & Kim, 1997), strategic alliances (Kogut & Zander, 1992), and mergers and acquisitions (Barkema & Vermeulen, 1998; Vermuelen & Barkema, 2001).
The field has been transformed from one based largely on normative case-based research into one emphasizing theory and empirical research using valuable data and rigorous analytical tools. Yet, the field still has some limitations in the general research methodologies employed (Boyd, Gove, & Hitt, 2005) and must take important steps to improve research practices in line with many of the other disciplines in business.
Although strategic management began as a largely practice-oriented field, it is important to recognize that the emphasis on scholarship has created a gap between the research perceived as quality by academicians and the relevance of that research as perceived by practitioners. Baldridge, Floyd, and Markoczy (2004) found there was a statistically significant positive relationship between academic quality and global relevance of strategic management research, but the amount of overlap in the two evaluations was small. This might have implications for future development of the field. (Michael A. Hitt, 2005)

Strategic Management of IT in Construction

The issue of technology exploitation, particularly in the field of information technology, is of significant importance in construction industry. Information technology (IT) has created fundamental impact on the way business processes are carried out. IT can no longer be viewed as an enhancement to traditional business procedures but rather as an innovation agent that enables new and different alternatives in operation of business organization. This new trend will color investment attitudes of business communities in the world towards utilization of IT in the coming years. IT is already widely used in construction organizations and much more dramatic effects are anticipated for the years to come. [Betts, (1999)] reported that the construction industry in many countries is starting to consider seriously the strategic use of IT. The use of IT in construction is extending beyond the stage of piecemeal application for improving the efficiency of discrete operations by individual organizations to an advanced stage where IT is applied strategically in commercial enterprise, government agencies and professional institution. From strategic point of view, IT has the potential to change the landscape of the construction industry.
Survey shows that Indonesian construction industry was having investment for acquiring the latest in hardware and software, but does not have adequate and trained personnel to utilize the same. It can be surmised that IT is used mostly in administration and other supporting area, but not in strategic core and business enhancement processes. The construction organizations in Indonesia use IT mostly in processes related to information management, occupation and maintenance management, and business planning. IT has made little difference in business human resources and marketing process.
If above areas of IT applications are strengthened the Indonesian construction industry will reap greater benefits.
Since the level of IT use is prevalent at lower level, top management of construction organizations should have strong commitment to develop strategic management of IT in their business processes. The hardware, software and their applications should be utilized to enhance both core and supporting activities to gain competitive advantage in today highly global business environment. Secondly, the firm's management should give greater attention to IT support and training, by making sure that there is sufficient trained staff for the implementation of IT, and making greater effort in training staff on the correct and efficient use of IT in the organization. Thirdly, Government and public agencies should consider policies that encourage the use of IT in the construction industry thus making this industry sector more competitive, and encourage industry to make greater use of information system. (M.S.Pamulu, et al., 2005)

Strategic Management in Construction

The traditional philosophy of management in construction, both in academia and in industry, places great emphasis on the ability to plan and execute projects. In contrast, a similar emphasis on strategic management has received less attention in the construction industry. Although the pressures of project performance can often obscure the broader social, economic, and professional context in which strategic management is undertaken, it is these broad contextual areas that make strategic management an essential issue for construction organizations. Rapidly changing social and technological issues are creating a professional environment that will look very different in the coming decades from that experienced in today’s organizations (Chinowsky & Meredith, 2000)