A Review of ‘Strategy as Stretch and Leverage
A Review of ‘Strategy as Stretch and Leverage’ – By Gary Hamel and C.K. Prahalad
URN: 6029471 Word Count: 1647
A Review of ‘Strategy as Stretch and Leverage’ – By Gary Hamel and C.K. Prahalad
This review will focus on the article ‘Strategy as Stretch and Leverage’ by Gary Hamel and C.K. Prahalad (1993). This review will identify the arguments made in the article and then place it within the context of one of the key debates in strategy academia. The review will then investigate the underlying assumptions made and evaluate the strengths and weaknesses of the article. The main argument of the article is that companies focus too much on evaluating their environment and creating strategy based on those factors. Hamel and Prahalad (1993) suggest a different approach to developing strategy that focuses on the mind-set of managers in order to achieve success. Using the example of small firms that seek to topple the industry leader they refer to this approach as stretch, where the firm sets aspirations and targets in the long term that are beyond their resource capabilities, and leveraging, where the firm undertakes incremental activities, which allows them to achieve this unrealistic goal. This approach requires a radical change in the way traditional managers think and operate, Hamel and Prahalad (1993) claim that “long term competitiveness depends on managers’ willingness to challenge continually their managerial frames.” Having defined the key argument of the article, the next step is to place it within one of the major debates in strategy academia. Upon further review of the article it becomes clear that Hamel and Prahalad (1993) touch upon several of the key strategy debates, however the article fits best into the Organisation vs. Environment (Cheng and Bennett, 2007) debate. The organisation vs. environment debate revolves around the shaping of organisational strategy. Academics that favour the environmental side of the debate, argue that “firm performance
URN: 6029471 Word Count: 1647
A Review of ‘Strategy as Stretch and Leverage’ – By Gary Hamel and C.K. Prahalad
This review will focus on the article ‘Strategy as Stretch and Leverage’ by Gary Hamel and C.K. Prahalad (1993). This review will identify the arguments made in the article and then place it within the context of one of the key debates in strategy academia. The review will then investigate the underlying assumptions made and evaluate the strengths and weaknesses of the article. The main argument of the article is that companies focus too much on evaluating their environment and creating strategy based on those factors. Hamel and Prahalad (1993) suggest a different approach to developing strategy that focuses on the mind-set of managers in order to achieve success. Using the example of small firms that seek to topple the industry leader they refer to this approach as stretch, where the firm sets aspirations and targets in the long term that are beyond their resource capabilities, and leveraging, where the firm undertakes incremental activities, which allows them to achieve this unrealistic goal. This approach requires a radical change in the way traditional managers think and operate, Hamel and Prahalad (1993) claim that “long term competitiveness depends on managers’ willingness to challenge continually their managerial frames.” Having defined the key argument of the article, the next step is to place it within one of the major debates in strategy academia. Upon further review of the article it becomes clear that Hamel and Prahalad (1993) touch upon several of the key strategy debates, however the article fits best into the Organisation vs. Environment (Cheng and Bennett, 2007) debate. The organisation vs. environment debate revolves around the shaping of organisational strategy. Academics that favour the environmental side of the debate, argue that “firm performance