Strategy for the Global Market

Theory and Practical Applications

Vladimir Kvint

• Publisher: Routledge
• Year: 2015
• eBook ISBN: 9781317485568
• Topic: Business
• Subtopic: Business General
• Index: Business

In the twenty-first century, the global community constantly strives to bring structure and order to the world through strategic means. From the highest levels of governments and militaries to multilateral institutions, NGOs, and corporations, a strategy for the future of a company, region, country, or even the world is tantamount to success. Yet few understand what strategy actually is and how it can be developed, planned, and implemented.

Strategy for the Global Market combines a fundamental study of the theory of strategy with its practical applications to provide a new approach to the global emerging market. Due to the technological transformations in communications and transportation, and the birth and development of both the global community and the global marketplace over the past twenty years, the world's population and corporations are in much closer contact with their counterparts across the globe than ever before. This has led to increasing competition and even rivalries. Understanding the strategic environment, as well as solving problems either through amicable means or conflict, requires the powerful instrument of strategy to remain efficient and to triumph.

Features of this book include:

• Methodology and practical recommendations for all stages of developing and implementing strategy.
• A comprehensive guide with explanations and descriptions, for the preparation and orderly compilation of all necessary strategy documents.
• Real-world examples taken from corporate, government, and military strategizing practices in emerging market countries and the global marketplace.

This book should be on the desk of every national, regional, and military leader, corporate executive, manager, and student of strategy.

Part I

Strategy

Theory and Methodology

1 Uncovering Philosophical Roots for a Theory of Strategy

Practical wisdom secures us power over others.¹

Aristotle (384–322 BCE)

In the world of knowledge the idea of the good appears last of all, and is seen only with an effort.²

Plato (427–347 BCE)

For to be in a state of meditation is to be finished, while to exist is to become.³

S⊘ren Kierkegaard (1813–1855)

Interrelationship between Philosophical and Strategic Thoughts

The importance of true strategic thoughts and strategy itself is often neglected or ignored in the modern world. While de facto strategic thought has been used for hundreds and thousands of years in military and governmental capacities, the knowledge and concrete understanding of the phenomenon of strategy didn’t exist. This is why the genealogy of strategy is explored later in the chapter. Strategy still remains surprisingly underestimated, misused, or misunderstood within certain powerful corporations, governments, and military bodies. Even successfully navigating one’s personal life requires a strategic mindset and rules of strategy development and implementation. It is my argument and contention that aspects important to this strategic mindset and strategizing practice can be taught. This book aims to provide the philosophical roots and historical background to the theory of strategy, as well as important strategic considerations for modern entities, in order to bring strategy to the forefront of corporate, governmental, and military decisions—where it must remain in order to ensure success in the complex global community. Major failure in all of these spheres of humankind’s activities can be attributed to the prevalent attention to tactical and operational decisions and routine, instead of focusing on the enrichment of long-term strategic solutions and vectors to success.

Beginning with the works of early strategists, such as Roman leader and author Frontinus and Emperor Maurice (539–602 CE), the theory of strategy has sporadically developed over the past 2,000 years in leaps and bounds; however, strategy is still very much a work in progress. In this book, I attempt to systematize the building blocks of classical, modern, and contemporary works to ground strategic theory and practice. Strategists and leaders must seriously study, analyze, and comprehend the different categories of strategic thought and their practical vision must be perfected during the processes of strategy development and implementation. In order to do this, it is necessary to incorporate major issues within ancient philosophical and classical analytic military works into our modern-day decision-making processes in any field of leadership. The theory of strategy, like any other theory, must be learned from the beginning. Modern and upcoming leaders can learn a great deal from these ancient works written during strategy’s birth, and from a sustained inquiry into the genesis of strategy in the ancient world up to now.

While there are certain major distinctions between philosophical thought and strategic thought, the pair together forms a complementary whole. In order to explain the importance of philosophical study in successful strategy development, I must turn to my own experience, growing up and maturing under the influence of dialectical materialism, which was the basis of Marxism. At that time, my intellectual worldview was above all influenced by the works of Aristotle, Spinoza, along with other metaphysicians, but also by the philosophical idealism of Hegel and the ancient philosopher Philo of Alexandria. My intellectual development within these philosophical traditions, as well as my now 40 years of experience in strategy development and implementation—strategizing—led to my conclusion that a strategist’s way of thinking should form a complete and undivided consciousness in substantial agreement with a philosophical worldview.

Strategists aim for a holistic and interconnected world perception; in this way, both a great depth of vision and an evaluation of environmental realities and facts unite both philosophers and strategists. However, philosophers are concerned with truthful statements that are verified by facts and, in this way, are somewhat distinct from strategists, who are more concerned with the future reality yet to be determined. For strategists, facts cannot be ignored, but they hold less importance than for philosophers. Of course, correctly understanding events through strategic thinking can, to a lesser extent, validate selected strategic perspectives and scenarios. Strategists can ignore current facts since they must ultimately look into the future, where current events can be forgotten, considered not related at all, or hold less influence on future “realities” than previously envisioned. Strategists work to establish new strategic perspectives, priorities, and scenarios where current facts do not exist and future facts will remain mostly mysterious, even to strategists with a long-term vision. Most future facts at the period of strategy development cannot be known; this is why strategists and philosophers differ in how they analyze and make conclusions regarding these facts, and in the way these facts are incorporated into their findings. Strategists need facts, which always belong to the past, for analysis, and not necessarily for inclusion in any formal strategic scenario.

Strategic and philosophical thoughts also originate from slightly different traditions and schools with various levels of maturity. No one science is as mature as philosophy. Strategy as a theory, in contrast to the majority of other sciences, has not yet gone far beyond its infancy. Philosophical ideas typically begin with abstraction and involve few, if any, practical examples, except for the field of ontology, which is much closer to strategy than any other philosophical analysis. The initial observation of Plato (427–347 BCE) that the world is not perfect is purely an ontological one, which for me is a statement of his interpretation of facts. In contrast to other philosophical schools, strategic thought is primarily rooted in concrete examples used to prove strategic accuracy. As Napoleon (1769–1821) said:⁴

Tactics, evolutions, and duties may be learned in treatises, but the science of strategy is only to be acquired by experience, and by studying the lessons of the campaigns, of the great captains. These lessons have been to keep one’s forces united; to leave no weak part unguarded; seize with rapidity on important points; and to inspire terror at the reputation of your arms, which will at once maintain fidelity and secure subjection.⁵

In this text, Napoleon explicitly recommends that leaders not only make conclusions through theory, but through their strategic experience, as well as through studying other leaders’ campaigns. Unlike Napoleon, philosophers generally focus less attention on practice, often purposefully preferring theoretical thought over the practical application of their ideas. Confucius (551–479 BCE) wrote: “By three methods we may learn wisdom: first by reflection, which is noblest; second by imitation, which is easiest; and third by experience, which is the bitterest.”⁶

At first glance, these two geniuses—Napoleon and Confucius—directly contradict each other. Confucius reflects on wisdom and how to obtain wisdom, while Napoleon speaks about strategy. A deeper analysis shows that, in fact, they are speaking about distinct characteristics of the same phenomenon. Both discuss different qualities of strategists and strategies, but address the same subject. By combining their two ideas, we can establish a soft definition of strategy:

Strategy is wisdom with a defined vector to success and with an assessment of resource limitations.

From this point of view, a strategist’s way of thinking and categorizing is closer to an ontologist, who studies fundamental rules and principles of reality, both economic and social. Strategy as a science, unlike philosophy, has developed less rules and categories in its terms, theories, methods, and methodology. My studies in strategy and philosophy have led me to conclude that some of the major categories of ontology, like time and space, are also predominant in strategy, both as a science and a practice. From this point of view, the philosophical roots of strategy can be found in the works of Plato (and his ideas inherited from Socrates), Aristotle, Parmenides, and, later, Descartes, Spinoza, Heidegger, and other metaphysicians working on rationalism, empiricism, and organicism. These roots are all anchored in ontology.

It is even more theoretically interesting and practically important to analyze the thoughts of great philosophers and strategists who lived in the same historical periods and in the same parts of the world. Some of the earliest recorded sources of this kind are the works of the masterful strategist Sun-Tzu (544–496 BCE) and the philosopher Confucius, who both lived in the sixth and fifth century BCE. Naturally, there is a danger in analyzing works that are over 2,500 years old and written in an ancient language. There is also the problem of the original text. Sun-Tzu’s works were compiled and rewritten about 400 years after he lived by Sima Qian (145–86 BCE), known as the Grand Historian. Translations of ancient works also vary depending on the translator. For instance, in Sun-Tzu’s The Art of War, Ralph D. Sawyer and Mei-Chun Lee Sawyer translate a line in Chapter 1 about the five major qualities of the commander during wartime: “The general encompasses wisdom, credibility, benevolence, courage, and strictness.”⁷ This same line was translated by John Minford in 2002 to read more poetically:

Command is

Wisdom,

Integrity,

Compassion,

Courage,

Severity.⁸

This example illustrates how difficult it is for scholars to find the correct meaning in the writings of great ancient philosophers and strategists. In the above quotes, one ancient word is translated in two different ways: “credibility” by Sawyer and “integrity” by Minford. These words are similar, but they do have different meanings, especially for strategists. Credibility is related to how people perceive others in terms of truthfulness, which is one of the most important rules and principles for strategists. Integrity represents internal qualities of virtue. Credibility comes with integrity. It is an error to conflate the two terms. If a strategist agrees to develop a strategy to produce weapons of mass destruction, there must be credibility in their work. If the strategy goes against the strategist’s own moral code, he should not agree to develop such a strategy. If he does agree, he has to put aside the issue of moral integrity and work only towards credibly implementing the strategy. These are just some of the pitfalls facing strategists who study ancient texts in order to apply their words to contemporary understandings and practices. In Chapter 2 of this book, a discussion of Rule 8 will return us to this complex issue.

Nonetheless, this quote references what are known as the cardinal Confucian virtues: humanity (here as compassion), wisdom, and sincerity (here as integrity). Even from this short quotation, it is clear that deep strategic thoughts are always drawn in to the same categories that provide the basis of philosophical processes of thought and a deep understanding of reality. Moreover, it is even more interesting to note that Aristotle, who lived about 150 years after Sun-Tzu and Confucius in a very different part of the world, and who obviously did not know about them, mentions the same basic categories as well. Even with very different backgrounds and practice, they all identify ideas using the same categorical concepts. Their relationship to their states’ and regions’ military practices unifies all three of these geniuses. Many of Aristotle’s thoughts that we consider strategic most probably originated from teaching Alexander the Great (356–323 BCE) and analyzing his victorious practice (“praxis”). Sun-Tzu, by comparison, analyzed using his military years as a commander. Confucius most likely also analyzed the rules and experiences of the principalities in which he lived. Confucius, who occupied different positions in government, lived during a time when several dynasties were simultaneously at war. These warring factions must have informed his strategic analysis. Thus, certain brilliant philosophers and de facto strategists understood the complex and important link between their two domains of thought.

Despite the fact that most philosophers do not make distinct recommendations for strategy, their ideas communicated through philosophical tractates, or treatises, can still enrich strategic practice. Modern strategists can improve their practical experiences and expertise through analyses of historical and contemporary leaders’ work and achievements. If practitioners, statesman, military generals, and business executives study the experiences of famous successful military, political, and business leaders, then theoretical strategists will create methodological recommendations from both theoretical works and their practical applications. In addition to the above-mentioned Art of War translated by Ralph Sawyer and John Minford, I read an old Russian translation by the late Professor Nikolai Konrad, a member of the prestigious Russian Academy of Sciences. Konrad translated the title of Sun-Tzu’s book as A Tractate of Military Art, alluding to the philosophical nature of the work. After reading all three of these translations, the title that makes the most practical sense to me would be A Strategy of Power. In today’s world, the book is not often used in warfare, but is highly regarded in the business domain. The continuing legacy of Sun-Tzu’s work comes from its application not only for business and military leaders, but also for anyone interested in strategic power. It is a useful text for any individual who wants to direct his or her personal path.

Outstanding leaders like Alexander the Great and Napoleon honed their distinguished ability by first studying theoretical works or listening to great teachers. Only after first studying did their military experience improve. The father of Alexander the Great, Phillip II of Macedon, could not find a better teacher for Alexander than the greatest philosophical mind of all time, Aristotle. Napoleon often remembered his teachers at the Ecole Militaire (Military Academy) with fondness.

To continue studying the epistemological roots of strategic thought and its appropriate translations from ancient languages, it is useful to address related issues in sacred texts. Even the most read texts in the world that in essence discuss the subject of strategy have multiple translations, some of which use the term strategy and some of which do not. For example, the Old Testament, a sacred text for both Jewish and Christian religions and a substantial text for Islam as well, describes strategic issues. In 2 Kings 18, Hezekiah, the legendary king of Judah, sends a representative to the king of Assyria with a message that emphasizes his “strategic” advantage. The Assyrian king is impressed and sends his field commander to ask, “You say you have strategy and military strength—but you speak only empty words. On whom are you depending, that you rebel against me?” (2 Kings 18:20).⁹ Even then, a strong leader was considered equally important to military power and strategy! However, this sentence reads differently in the seventeenth-century King James English translation: “Thou sayest, (but they are but vain words,) I have counsel and strength for the war. Now on whom dost thou trust, that thou rebellest against me?”¹⁰ One translator uses the word strategy, while the other uses “counsel.” However, we can deduce that, at least in this instance, “counsel” represents sound strategic advice. Otherwise, there would be no reason for Hezekiah to mention it alongside—and even, in context, as more important than—military power. As modern readers, it is important to assess these translations to the best of our abilities while paying attention to the context in...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Dedication
• Contents
• List of Plates
• List of Figures
• List of Maps
• List of Tables
• About the Author
• Acknowledgments
• Keynote Definitions
• List of Abbreviations
• Preface
• Part I Strategy Theory and Methodology
• 1 Uncovering Philosophical Roots for a Theory of Strategy
• 2 The Strategic Thought Process
• Part II Strategy in Practice
• 3 Developing and Implementing Strategy
• 4 Strategic Management Systems
• Part III The Strategic Role of the Global Emerging Market in the Global Marketplace
• 5 A Strategic Evaluation of the Global Marketplace
• 6 The Global Emerging Market Definition, Characteristics, and Dynamics
• 7 Ten Global Trends Political, Economic, and Technological Impacts on Strategies for Emerging Markets
• 8 The Strategic Influence of the Emerging Global Economic and Business Orders
• 9 Investment Strategies for the Global Emerging Market
• 10 Afterword
• Bibliography
• Index