Introduction
This essay examines the distinctions between the aims and purposes of individual organisational strategy and collective strategy within the context of strategic leadership. Individual organisational strategy focuses on the specific goals and competitive positioning of a single entity, while collective strategy pertains to collaborative efforts among multiple organisations to achieve shared objectives. Understanding these differences is crucial for leaders navigating complex business environments, as each approach serves distinct purposes and yields unique outcomes. This analysis will explore the aims and purposes of both strategies, supported by academic evidence, and evaluate their implications for strategic decision-making.
Individual Organisational Strategy: Aims and Purposes
Individual organisational strategy refers to the plans and actions devised by a single organisation to achieve its specific objectives, such as profitability, market share, or innovation. The primary aim is to create a competitive advantage tailored to the organisation’s internal capabilities and external environment (Porter, 1985). For instance, a company like Tesco might focus on cost leadership to attract price-sensitive customers in the UK retail sector. The purpose here is to ensure sustainability and growth by aligning resources and operations with the organisation’s unique vision and goals.
This type of strategy often prioritises independence in decision-making, allowing firms to respond swiftly to market changes. However, as Hill, Jones, and Schilling (2014) argue, the limitation of individual strategy lies in its potential isolation, where organisations may overlook broader industry trends or collaborative opportunities. Thus, while the aim is to secure a distinct market position, the purpose is inherently self-focused, concentrating on internal strengths and weaknesses rather than external alliances.
Collective Strategy: Aims and Purposes
In contrast, collective strategy involves multiple organisations working together to address shared challenges or pursue mutual benefits, often through alliances, partnerships, or industry consortia. The central aim is to achieve outcomes unattainable by a single entity, such as setting industry standards or tackling systemic issues like sustainability (Astley and Fombrun, 1983). For example, in the technology sector, firms may collaborate to develop interoperable software standards, benefiting the entire industry.
The purpose of collective strategy extends beyond individual gain to fostering sector-wide stability or innovation. As noted by Dyer and Singh (1998), such strategies create relational rents—value generated through collaboration that individual firms cannot replicate alone. However, collective strategies can be complex to manage due to differing organisational goals and potential conflicts. Therefore, while the aim is to address macro-level challenges, the purpose often revolves around shared value creation and long-term industry advancement.
Key Differences and Implications
The primary difference between individual and collective strategies lies in their scope and focus. Individual strategies are organisation-specific, aiming for competitive differentiation, whereas collective strategies are collaborative, targeting industry-wide or societal benefits. Furthermore, the purpose of individual strategy is typically short-to-medium-term (e.g., profit maximisation), while collective strategy often adopts a longer-term perspective (e.g., sustainability or innovation).
From a strategic leadership perspective, these differences necessitate distinct skills. Leaders pursuing individual strategies must excel in internal resource management, whereas those engaged in collective strategies require proficiency in negotiation and trust-building across organisations. Arguably, balancing both approaches can be advantageous; for instance, a firm might maintain a robust individual strategy while participating in collective initiatives to shape industry standards.
Conclusion
In summary, individual organisational strategy and collective strategy serve contrasting aims and purposes within strategic leadership. The former focuses on independent competitive advantage and internal growth, while the latter prioritises collaboration for shared benefits and industry progress. Understanding these distinctions enables leaders to make informed decisions about when to compete and when to collaborate. The implication for practice is clear: a nuanced approach that integrates elements of both strategies can enhance organisational resilience and industry influence in an increasingly interconnected business landscape.
References
- Astley, W. G. and Fombrun, C. J. (1983) Collective Strategy: Social Ecology of Organizational Environments. Academy of Management Review, 8(4), pp. 576-587.
- Dyer, J. H. and Singh, H. (1998) The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage. Academy of Management Review, 23(4), pp. 660-679.
- Hill, C. W. L., Jones, G. R. and Schilling, M. A. (2014) Strategic Management: Theory: An Integrated Approach. 11th ed. Cengage Learning.
- Porter, M. E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
