way we speak, such as the word friend being used as a verb.

Ironically, Facebook’s emphasis on

connecting with existing and new friends is about as different as it could be from Zuckerberg’s
original mean-spirit ed concept. Certainly, Zuckerberg’s emergent and realized strategies turned out to
be far nobler than the intended strategy that began his adventure in entrepreneurs hip.

References

Donahoe, J. A. (2011). Forbes: Fred Smith’s fortune grows to $.21B. Memphis Business Journal.
http://www.bizjournals.com/memphis /news /2011/03/10/forbes-fred-s miths -fortune-grows-to.ht ml.

Funding Universe. (n.d.). Fedex Corporation History.

http://www.fundingunivers e.com/comp any -histories/F edEx-Corp oration-Company-H istory.ht ml.

Fortune: FedEx 8th ‘most admired’ company in the world. Memphis Business Journal. (2011). http://www.bizjournals
.com/memphis /news/2011/03/03/fortune-fedex-8th-most- admired.ht ml.

Chapter 1: Mastering Strategy: Art and Science | 17

M intzberg, H., & Waters, J. A. (1985). Of strategies, deliberat e and emergent. Strategic Managem ent Journal, 6, 257–272.

Wells, K. (2002). Floating off the page: The best stories from the Wall Street Journal’s middle column. Simon &
Schuster. pg 97.

Image Credits

Figure 1.3: Kindred Grey (2020). “Intended, Deliberate, Realized Strategy.” CC BY-SA 4.0. Retrieved from
https://commons.w ikimedia.org/w iki/F ile:Int ended,_D eliberate,_Realiz ed_Strat egy.png .

Figure 1.4: Anthony Quintano (2018). “M ark Zuckerberg F8 2018 Keynote.” CC BY 2.0. Retrieved from
https://commons.w ikimedia.org/w iki/F ile:M ark_Z uckerberg_F 8_2018_K eynot e.jp g.

1.4 The History of Strategic Management

Those who cannot remember the past are condemned to repeat it.

– George Santayana, The Life of Reason

Santayana’s quote has strong implications for strategic management. The history of strategic management can be traced
back several thousand years. Great wisdom about strategy can be acquired by understanding the past, but ignoring the
lessons of history can lead to costly strategic mistakes that could have been avoided. Certainly, the present offers very
important lessons; businesses can gain knowledge about what strategies do and do not work by studying the current actions
of other businesses. But this section discusses two less obvious sources of wisdom: (1) strategy in ancient times and (2)
military strategy. This section also briefly traces the development of strategic management as a field of study.

Strategy in Ancient Times

Perhaps the earliest-known discussion of strategy is offered in the Old Testament of the Bible (Bracker, 1980).
Approximately 3,500 years ago, M oses faced quite a challenge after leading his fellow Hebrews out of enslavement
in Egypt. M oses was overwhelmed as the lone strategist at the helm of a nation that may have exceeded one million
people. Based on advice from his father-in-law, M oses began delegating authority to other leaders, each of whom
oversaw a group of people. This hierarchical delegation of authority created a command structure that freed M oses to
concentrate on the biggest decisions and helped him implement his strategies (Table 1.2 “Strategy in Ancient Times”).
Similarly, the demands of strategic management today are simply too

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much for a chief executive officer (the top leader of a company) to handle alone. M any important tasks are thus entrusted
to vice presidents and other executives.

In ancient China, strategist and philosopher Sun Tzu offered thoughts on strategy that continue to be studied carefully
by business and military leaders today. Sun Tzu’s best -known work is The Art of War. As this title implies, Sun Tzu
emphasized the creative and deceptive aspects of strategy.

Strategic management borrows many ideas from ancient uses of strategy over time. The following anecdotes
provide a few notable examples of historical actions that remain relevant for the study of modern strategy. Indeed,
the Greek verb strategos means “army leader” and the idea of stratego ( from which we get the word strategy) refers
to the idea of destroying one’s enemies through the effective use of resources.

Table 1.2 Strategy in Ancient Times

1491 BC:
Moses uses hierarchical delegation of authority during the exodus from Egypt. Dividing a large set of people into smaller groups
creates a command structure that enables strategies to be implemented.

500 BC:

Sun T zu’s T he Art of War provides a classic handbook on military strategy with numerous business applications, such as the
idea “ to win without fighting is the best.” T his type of approach was used by businesses, such as Gap Inc. when they decided to
create their own stores rather than competing for shelf space for their clothing within traditional department stores.

70 BC:

Roman poet Virgil tells the story of the T rojan horse, a classic strategic ploy where the Greek forces hid a select number of
soldiers in a large wooden horse that the T rojan army took into their heavily guarded city gates. Once inside the city, Greek
soldiers were able to open the gates and allow in reinforcements which eventually led to the end of the war.

c. 530:

King Arthur rules Britain. Legend says he made his famed round table so that no one, including him, would be seen as above the
others. His mission to find the Holy Grail serves as an exemplar for the importance of the central mission to guide
organizational actions.

One of Sun Tzu’s ideas that has numerous business applications is that winning a battle without fighting is the best
way to win. Apple’s behavior in the personal computer business offers a good example of this idea in action. M any
computer makers such as Toshiba, Acer, and Lenovo compete with one another based primarily on price. This leads
to price wars that undermine the computer makers’ profits. In contrast, Apple prefers to develop unique features for
its computers, features that have created a fiercely loyal set of customers. Apple boldly charges far more for its
computers than its rivals charge for theirs. Apple does not even worry much about whether its computers’ software is
compatible with the software used by most other computers. Rather than fighting a battle with other firms, Apple wins
within the computer business by creating its own unique market and by attracting a set of loyal customers. Sun Tzu
would probably admire Apple’s approach.

Perhaps the most famous example of strategy in ancient times revolves around the Trojan horse. According to
legend, Greek soldiers wanted to find a way to enter the gates of Troy and attack the city from the inside. They devised
a ploy that involved creating a giant wooden horse, hiding soldiers inside the horse, and offering the horse to the
Trojans as a gift. The Trojans were fooled and brought the horse inside their city. When night arrived, the hidden
Greek soldiers opened the gates for their army, leading to a Greek victory. In modern times,

Chapter 1: Mastering Strategy: Art and Science | 19

the term Trojan horse refers to gestures that appear on the surface to be beneficial to the recipient but that mask a
sinister intent. Computer viruses also are sometimes referred to as Trojan horses.

A far more noble approach to strategy than the Greeks’ is attributed to King Arthur of Britain. Unlike the hierarchical
approach to organizing M oses used, Arthur allegedly considered himself and each of his knights to have an equal say
in plotting the group’s strategy. Indeed, the group is thought to have held its meetings at a round table so that no voice,
including Arthur’s, would be seen as more important than the others. The choice of furniture in modern executive
suites is perhaps revealing. M ost feature rectangular meeting tables, perhaps signaling that one person—the chief
executive officer—is in charge.

Another implication for strategic management offered by King Arthur and his Knights of the Round Table involves
the concept of mission. Their vigorous search to find the Holy Grail (the legendary cup used by Jesus and his disciples
at the Last Supper) serves as an exemplar for the importance of a central mission to guide organizational strategy and
actions.

Lessons Offered by Military Strategy

Key military conflicts and events have shaped the understanding of strategic management (Table 1.3). Indeed, the
word strategy has its roots in warfare. The Greek verb strategos means “army leader” and the idea of stratego (from
which we get the word strategy) refers to defeating an enemy by effectively using resources (Bracker, 1980).

A book written nearly five hundred years ago is still regarded by many as an insightful guide for conquering and ruling
territories. Niccolò M achiavelli’s 1532 book The Prince offers clever recipes for success to government leaders. Some
of the book’s suggestions are quite devious, and the word M achiavellian is used today to refer to acts of deceit and
manipulation.

Two wars fought on American soil provide important lessons about strategic management. In the late 1700s, the
American Revolution pitted the American colonies against mighty Great Britain. The Americans relied on
nontraditional tactics, such as guerilla warfare and the strategic targeting of British officers. Although these tactics
were considered by Great Britain to be barbaric, they later became widely used approaches to warfare. The Americans
owed their success in part to help from the French navy, illustrating the potential value of strategic alliances.

Nearly a century later, Americans turned on one another during the Civil War. After four years of hostilities, the
Confederate states were forced to surrender. Historians consider the Confederacy to have had better generals, but the
Union possessed greater resources, such as factories and railroad lines. As many modern companies have discovered,
sometimes good strategies simply cannot overcome a stronger adversary.

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 Two wars fought on Russian soil also offer insights. In the 1800s, a powerful French
invasion force was defeated in part by the brutal nature of Russian winters. In the 1940s,
a similar fate befell German forces during World War II. Against the advice of some of
his leading generals, Adolf Hitler ordered his army to conquer Russia. Like the French
before them, the Germans were able to penetrate deep into Russian territory. As George
Santayana had warned, however, the forgotten past was about to repeat itself. Horrific
cold stopped the German advance. Russian forces eventually took control of the combat,
and Hitler committed suicide as the Russians approached the German capital, Berlin.

Five years earlier, Germany ironically had benefited from an opponent ignoring the
strategic management lessons of the past. In ancient times, the Romans had assumed
that no army could cross a mountain range known as the Alps. An enemy general named
Hannibal put his men on elephants, crossed the mountains, and caught Roman forces
unprepared. French commanders made a similar bad assumption in 1940. When
Figure 1.5: General Hannibal Germany invaded Belgium (and then France) in 1940, its strategy caught French forces
from Carthage, who led his
by surprise.
troops on elephants to cross the
Alps to attack the Romans.

The top French commanders assumed that German tanks simply could not make it through a thickly wooded region
known as the Ardennes Forest. As a result, French forces did not bother preparing a strong defense in that area.
M ost of the French army and their British allies instead protected against a small, diversionary force that the Germans
had sent as a deception to the north of the forest. German forces made it through the forest, encircled the allied forces,
and started driving them toward the ocean. M any thousands of French and British soldiers were killed or captured. In
retrospect, the French generals had ignored an important lesson of history: do not make assumptions about what your
adversary can and cannot do. Executives who make similar assumptions about their competitors put their
organizat ions ’ performance in jeopardy.

Strategic management often borrows lessons as well as metaphors from classic military strategy. For example,
major business decisions are often categoriz ed as “strategic” while more minor decisions (such as small changes in
price or the opening of a new location) are referred to as “tactical” decisions. Here are a few select examples of
classic military strategies that hold insights for strategic decisions today.

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