As defined by Johnson et al (2005: 9), business strategy ‘… is the direction and scope of an organization over the longer term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations’. The word strategy derives from the Greek ‘strategus’, a general. Strategy was originally a broad, rather vaguely defined description of the art used by a commanderin- chief when conducting a military campaign and projecting and directing large movements against an enemy. Commanders-in-chief and military campaigns do not exist in business, public sector or voluntar organizations, but at least this definition conveys the messages that strategy is the ultimate responsibility of the head of the organization, is an art, and is concerned with projecting and directing large movements.
The aim of this chapter is to provide a basis for understanding the concept of strategic human resource management (SHRM) by describing the fundamental nature of business strategy, bearing in mind the role of SHRM as described in the next chapter – that of enabling the organization to achieve its strategic goals. One of the purposes of this chapter is to counter the belief that business strategy is a highly rational affair that provides a firm basis for HR strategy. Strategy is in fact a far more intuitive, evolutionary and reactive process than most people believe.