What is an organizational strategy?
An organizational strategy is the long-term direction of the firm – the key decisions on how the firm will compete to achieve a competitive advantage relative to other firms. An organizational strategy is unifying – helping to make consistent the various parts of the firm, and ensure that day-to-day decisions (tactics) reinforce one another.
What are tactics?
Tactics are the day-to-day decisions and choices involved in implementing the strategy. They may occur throughout the firm – and while important to enacting the strategy, have a less permanent impact on the firm. Decisions on store layout, manufacturing processes, or the specific features to include in the product are all examples of tactics.
The importance of having a strategy
Part of the importance of recognizing the distinction between tactics and strategy is to see that tactics in themselves are not a strategy. Yes, they may be important to enacting a strategy, but simply having short-term initiatives fails to consider the bigger, longer-term picture for the company.
Examples of the differences between strategy and tactics
Difference 1: Time horizon
One of the first key distinctions between strategy and tactics is the timeframe of the action. While the strategy of the firm is intended to set the direction of a company for many years, tactics typically have a more short-term orientation – potentially only the coming few months.
Difference 2: Resource commitment
Another key distinction is the extent of resource commitment involved in strategic and tactical decisions. While strategic decisions may involve substantial amounts of money or commitments of individuals, tactical decisions are typically more confined in nature.
Difference 3: Impact across the firm
Strategic decisions are also likely to have a much larger impact across different parts of the firm. A strategy is intended to drive consistency in decisions – helping ensure that the various divisions of a firm are all aligned with one another – pulling in the same direction. Tactics on the other hand may be more confined to specific divisions – the tactical decisions made in manufacturing for example having little to no consequences to other parts of the business.
Difference 4: Ability to reverse the decision
A final distinction is that while the strategy of the firm is hard to adjust or reverse (in part because it has an impact across the firm), tactical decisions can more readily be changed – potentially in response to customer feedback or market changes.