Developing Theories of Strategy Using Dominance Criteria

Publication Type

Journal Article

Publication Date

1994

Abstract

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.

Discipline

Business Administration, Management, and Operations

Research Areas

Strategy and Organisation

Publication

Journal of Management Studies

Volume

31

Issue

2

First Page

209

Last Page

224

ISSN

0022-2380

Identifier

10.1111/j.1467-6486.1994.tb00772.x

Publisher

Wiley

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