=Paper=
{{Paper
|id=Vol-2574/short7
|storemode=property
|title=The Need and Requirements to a Strategy Ontology (short paper)
|pdfUrl=https://ceur-ws.org/Vol-2574/short7.pdf
|volume=Vol-2574
|authors=Jamie Caine,Mark von Rosing
|dblpUrl=https://dblp.org/rec/conf/vmbo/CaineR20
}}
==The Need and Requirements to a Strategy Ontology (short paper)==
https://ceur-ws.org/Vol-2574/short7.pdf
The Need and Requirements to a Strategy Ontology
Jamie Caine1,2 [0000-0001-8353-6529] and Mark von Rosing2 [0000-0003-2183-7646]
1 Department of Computing, Sheffield Hallam University, Sheffield, UK
2 LEADing Practice, Denmark
http://www.globaluniversityalliance.org
Abstract. The importance of strategy and strategy construct is not a new
phenomenon. However as strategy work becomes less tangible, concerns with
understanding, describing, and managing strategies develops into an increasingly
complex subject. Current strategy concepts are dispersed and lack integration.
Moreover, the enablement of modelling practices around strategy concepts
considering the entire strategy lifecycle are also missing. Consequently, this
paper focuses on issues with strategy in theory and practice, why a strategy
ontology is needed and how this can be developed.
Keywords: Strategy Ontology requirements, Strategy levels, Strategy
taxonomy, Strategy semantics, Strategy Lifecycle, Strategy artefacts, Strategy
decomposition and composition, Strategy Meta Model, Strategy Modelling.
1 Historic Perspective
Strategy is a term that originates out of the Greek language stratēgia, (στρατηγία),
where the meaning is centred on the military concept "art of troop leader; office of
general, command, generalship" [19]. The expression ‘strategy’ came into use, in the
6th century AD (Islamic Hijri calendar -50) in the east roman area. It first entered the
western world in the 18th century. At that time and until the 20th century, the word
"strategy" contrariwise was known as "a comprehensive way to try to pursue political
ends, including the threat or actual use of force, in a dialectic of wills"[4]. This was
however more related to battle struggle, in which both opponents interact [4]. Today,
within the defense industry it refers to planning directional components and
manoeuvring the resources before the enemy is engaged. Once the enemy is engaged,
strategy execution comes into play shifting attention to tactics. However, to ensure the
continuous improvement of strategy, it is the activities undertaken at the operational
level that enable this to happen. Knowing the centuries-old military origins of strategy
allows us to connect some of the commonly business terms today, for example:
• Strategy refers to basic directional decisions, i.e. purpose and mission.
• Strategy consists of the important actions, to realise these directions.
• Strategy is also or has planning components
• Strategy is positioning; that is, it reflects on decisions needed to be a specific
position in particular markets.
• Strategy is perspective, that is, vision and direction.
• Strategy is a "how," a means of getting from here to there.
• Therefore, strategy should answer the question: How should we allocate our
resources? What are the ends we seek and how should we achieve them?
70
Copyright © 2020 for this paper by its authors. Use permitted under Creative Commons License
Attribution 4.0 International (CC BY 4.0).
Henry Mintzberg already in his 1994 book, The Fall and Rise of Strategic
Planning, points out that people use "strategy" in several different ways. For example,
strategic planning isn’t strategic thinking. One is analysis, and the other is synthesis
[11]. In a 1996 Harvard Business Review article [13] and in an earlier book [12],
Porter argues that competitive strategy is "about being different." He adds, "It means
deliberately choosing a different set of activities to deliver a unique mix of value." In
short, Porter argues to embrace strategy as both plan and position. Others such as
Benjamin Tregoe and John Zimmerman [16], define strategy as "the framework
which guides those choices that determine the nature and direction of an
organisation." While Freedman debates that a strategy should describe how the ends
(goals) will be achieved by the means (resources) [4]. Simandan, argues that strategy
generally involves setting goals, determining actions to achieve the goals, and
mobilizing resources to execute the actions [41]. Of course, there are many more
definitions and descriptions that add to the confusion on what strategy is and what it
isn’t. Whilst various authors provide contrasting perspectives on what strategy is, we
believe it encompasses the above perspectives. Therefore, strategy consists of:
viewpoint, standpoint, direction, position, plan, pattern/concepts by which the ends
will be attained. In a business context, we therefore use the strategy definition used by
the enterprise standard body LEADing Practice in their Strategy Reference Content
[10]. They define strategy as follows; “Strategy is the direction, the plan and ends to
which the enterprise seeks to position itself, as well as the means and methods by
which the ends will be attained”.
2 Strategy and its failure rate
There is an overwhelming amount of evidence documenting the failure rate on
strategy execution. In 2016, Bridges, a reputable organisation surveying strategy
execution since 2002, recorded a 67% failure rate [24].
McKinsey [28] reported that 70% of change initiatives linked to strategy fail. Weaker
sources report failure rates of up to 80% and that 2% of C-level leaders are confident
in achieving 80-100% of their strategy objectives [25, 26] .
There have been several studies into the economic impact of strategy failure. A
revealing study in 2012 by Gene Kim and Mike Orzen highlighted a waste of $3
trillion on IT failures [29]. This focussed on the value that should be derived from IT
which ultimately connects back to organisational strategy [29]. The waste amounts to
4.7% of global GDP. To put this into perspective, the United Nations (UN) claim that
$267 billion per year would solve world hunger [30]. This is 0.3 % of global GDP,
meaning that hypothetically a 10% decrease of strategy failure would satisfy the UN’s
figure of global GDP to solve world hunger [31].
Economic savings and gains for organisations that successfully execute
strategy, would most likely not go towards ending world hunger. It could however be
used to support growth. Organisational growth can result to more jobs and an
improvement of economy, resulting in a positive growth cycle instead of a negative
recession cycle [32]. Positive growth and outperforming in your industry has
everything to do with strategy. The confusion around strategy academic discourse
and the significant waste of resources, enforces us to rethink the way in which we
71
work with strategy. Future projections allude to concerns in the ability for
organisations to adapt to change. No industry is immune to digital transformation and
some argue digital being the reason why more than 50% of organisations since 2000
have fallen out of the Fortune 500 list [33, 34]. Evidence from IBM’s global study on
emerging trends and disruptive forces provide support this claim [35]. The inability to
adapt to change will become critical for organisations [35]. Therefore, strategy
continues the struggle in shaking off shackles that aim to prevent the ability to not
only execute organisational goals; but also manage the turbulent change that disrupts
industry.
3 The need for a Strategy Ontology
Ontology enables us to share and reuse meaning [7]. It facilitates the definition of
concepts [7]. Put simply, “An ontology is a formal specification of a shared
conceptualization” [37 p. 12]. This understanding allows us to frame ontology within
a specific domain wherein the formal description creates a shared common
vocabulary.
3.1 The necessity to share and reuse meaning around strategy
Powell [37] in his paper ‘Strategy without Ontology’ discusses the issues that
surround the strategy field connecting this back to the absence of an strategy
ontology. Language and terms are embedded in our human interaction and it is human
endeavour that has progressed strategy to its current position today. However, with
the absence of an ontology he argues various theories and models are ‘just a game of
language’ [37]. The confusion around strategy and its definition and nature has been
discussed throughout the last century. There is a noticeable increase in this discussion
between 1956 to 1996 [17, 15, 16, 12, 14, 11, 13, 21, 22]. Despite this fact and the
several ways in which strategy is applied there are very many useful theories i.e.
frameworks, methods, approaches and artefacts [3, 2, 6, 23]. It doesn't take long to
identify some of the most recognised strategic management methods in academia and
industry. Godfrey and Johnson both discuss Balance Scorecard, Five Forces, Generic
Strategies (Competitive Strategy), Value Chain and Blue Ocean Strategy in this light
[5, 41]. We don’t wish to critique them or discuss their usefulness, but rather discuss
the need of alignment and harmonization in order for work to become more
integrated. This provides the ability to engineer, architect and model strategies along
their lifecycle. What we therefore do critique, is none of them build on a common
ontology, as they all use different concepts, definitions, terms, objects and symbols.
Therefore, in reality, for organisations applying these theories, it becomes clear that
there is no underlying concept. The organisational strategy management landscape is
rich with various models, frameworks and theories. It is a well-established academic
field that complements the endeavour of strategy practitioners in industry.
Nonetheless, the more these are applied, the more siloed the end result becomes. This
endangers the entire strategy lifecycle process from strategy analysis, strategy design,
strategy development, to strategy execution and the continuous improvement of the
72
strategy [1]. A valid argument as to why, organisations have a low success rate within
and around the work of strategy [1].
Godfrey argues the concept of the CEO, as Strategy Architect but there is no
suggestion of an architectural framework that connects all aspects to strategy [5]. A
fundamental pillar of software engineering is the ability to reuse existing software to
facilitate the specification, production, classification, similarities in requirements and,
the ability to retrieve in order to enhance development productivity [9]. Without
reusability the process of producing software becomes less efficient and standardised.
When examining the traditional approaches to strategy and some of the commonly
used models and theory, there is a distinctive lack of common taxonomy and thereby
reusability. When applying the models and theories, the associated outputs are not
designed to interlink, relate nor be reused. The foundation of providing the
opportunity for reuse has to have a shared standard vocabulary, in the case of strategy
these are the business terms [18]. The challenge that the strategist faces is to devise an
effective means of filtering the high-level plans into operative tasks that execute the
strategy. When the principle of reuse is applied in software development it enables the
development of a more robust software architecture that relates components
throughout the different software modules. Strategy needs to benefit from the same
principle so that high level strategies can be related to different levels and layers
across the enterprise Therefore providing an enhanced ability to engineer, architect
and model strategy.
4 What constitutes a strategy ontology?
Strategy has an extensive array of concepts and through a formal specification we
have the ability to effectively share meaning. This must be built upon a shared
interpretation of associated concepts, thus, emphasising the importance of Borst’s
‘shared meaning’ [36] The practice of strategy in industry has been and continues to
be, analysed from an academic and industry perspective. There is substantial
empirical evidence that provide details on the types of strategies applied in
organisations. The Profit Impact of Market Strategy (PIMS) has provided empirical
evidence for four decades [38]. This initiated in a pilot with General Motors in the
1960’s which developed into a widely accessed data source detailing factors
(including strategies applied) that differentiate business performance. PIMS has been
subject to a number of academic works around strategy and performance. From an
industry perspective, the likes of Mckinsey, Deliotte, Garnter and Bain and Company
are just some of the large consultancy firms that publish their empirical findings
around strategy adoption and C level perspectives on practice around strategy. The
development of a strategy ontology will need to evidence how it maps against the
patterns of strategy adoption in industry. Doing so will facilitate a pragmatic sharing
of meaning that strategy practitioners can utilise. Although there is no definitive
consensus on the principles that make up an ontology, there are reoccurring themes
that can be found in academic literature that provide a basis for developing an
ontology. Firstly, defining a hierarchy of classes that encompass relations is central to
ontology development [7] [40]. This supports the development of explicit knowledge
relating to a specific domain. This principle is named ‘Strategy Semantics’.
73
Furthermore, categorising the classes and enabling an assemble by order
structure of instances within the classes, borrows from the science of taxonomy which
supports the delineation of hierarchies within an ontology [7,40, 39]. This principle is
named ‘Strategy Taxonomy’.
Models based engineering and the ability to create “User defined relations that are
mapped from conceptual models”[40]; is also a key theme found in ontology
development. This logically follows the first principle discussed and enables the
mapping of a ‘class object to model relationship’[43]. This third principle is named
‘Strategy Engineering’.
“To share common understanding of the structure of information among people or
software agents” [39]; makes up the fourth principle. This is the ability of the
ontology to form a basis of sharing meaning amongst different stakeholders, be it
systems, organisations or people. This principle is named ‘Strategy Architecture’
Building upon these four principles enables the Strategy Ontology to function within
an informatics domain where principles of information engineering can be applied.
This supports the development of model based engineered artefacts that provide a
more rigorous approach to the way we model strategy. Furthermore, it provides the
ability to model strategy across the different layers of an enterprise [18].
5 Requirements to the Strategy Ontology
Approaches to developing and engineering ontologies begin with defining an
ontology's requirements; this is in the form of questions that an ontology must be able
to answer. We call this the competency of the ontology [18]. For any task in which the
ontology is to be employed, imposes a set of requirements on the ontology. These
requirements can best be specified as a set of queries that the ontology should be able
to answer, if it contains the relevant information. The competency questions are the
basis for a rigorous characterisation of the information that the ontology is able to
provide for the task [20]. Competency questions are used to evaluate an ontology in
the sense that the ontology must be necessary and sufficient to represent the tasks
specified by the competency questions and their solution. These are also the tasks for
which the ontology finds all and only the correct solutions. Tasks such as these can
serve to drive the development of new ontologies and also justify and characterise the
capabilities of existing ontologies [8].
In the expansion of this paper, we detail the specific requirements and competency
questions that enable a rigours development of a Strategy Ontology.
6 Requirements to a Strategy Meta Model
The notion of meta modelling is well established and commonly used in the realm of
model-driven engineering [44]. There are standards which describe the model driven
architecture [45] and provide language and modelling specifications such as Object
Management Group’s (OMG) Unified Modelling Language (UML). However, more
consideration and focus are needed towards the application of meta modelling within
the context of ontologies and ontology engineering [44]. Firstly, from an ontology
creation perspective, the modelling and design principles of model-driven
74
engineering, including meta modelling, benefit from abstraction of a concrete system.
These principles are only weakly exploited in ontology creation and design [44].
Secondly, if we consider meta modelling more generally as modelling with metadata,
this becomes an imperative [44]. A Strategy meta model would be relevant as it
would be an abstraction of the strategy system, describing and defining the various
Strategy Ontology objects class, stereotypes, types and subtypes, their relations and
how they all integrate. The Strategy meta model should therefore not only portray the
strategy relevant objects, but also portray the strategy levels i.e. enterprise, groups and
operations; linking the semantically possible related objects to these levels [1].
Von Rosing and Laurier [18] discuss how enterprise ontologies within their
context of discourse can be categorised, classified and related. This facilitates a
relationship and structure between the foundational, domain, task and application
ontologies.
As an application ontology meta model, the strategy meta model should relate to other
relevant application ontology meta models. Moreover, it should also relate to relevant
domain and task ontology meta models as well as, the core reference ontology meta
meta model and the foundational ontology upper meta model illustrated in Fig1.
MOF-Meta Object Facility (OMG)
COSMO (COmmon Semantic Model) Top Level Ontology
Basic Formal Ontology (BFO)
Enterprise Ontology/Business Ontology Foundational Ontology
Business Layer Ontology The full Enterprise Ontology
Information Layer Ontology Core Reference Ontology Categorization and Classifications
Technology Layer Ontology
Value Ontology Enterprise Requirement Ontology
Capability Ontology Domain Ontology Task Ontology Tiering Ontology
Service Ontology Categorization Ontology
Classification Ontology
Process Ontology
LiveCycle Ontology
Application System Ontology
Maturity Ontology
Data Ontology Layered Enterprise Architecture Ontology
Application Ontology
Platform Ontology Governance Ontology
Infrastructure Ontology Blueprinting Ontology
Force & Trend Ontology Strategy Ontology Planning Ontology Quality Ontology Risk Ontology
Security Ontology Measurement Ontology Monitoring Ontology Reporting Ontology Capability Ontology
Role Ontology Enterprise Rule Ontology Compliance Ontology Business Workflow Ontology Cloud Ontology
Business Process Ontology Ent. Information Ontology Ent. Infrastructure Ontology Ent. Platform Ontology Ent. Culture Ontology
Fig 1: The relationship between the strategy ontology and the enterprise ontologies [1]
Therefore, the Strategy Ontology meta model should be a subset of related meta
models and meta meta models. It should be visually represented, enabling first-order
logic that facilitates the visualisation of objects and relations in the ontology that can
be articulated as a (class) hierarchy. By linking (meta) objects to each other through
their object relations, the direct and indirect interrelationships in and across the
various business concepts and class hierarchies can be discovered [1].
7 Conclusion
This paper focused on the missing concepts to strategy exemplifying the need for a
Strategy Ontology and an outline of the requirements needed for developing such an
ontology. It did so by identifying why there is a need, what the scope and objective
should be, followed by an overview of its requirements. The preceding paper will
provide detailed descriptions of design components, the underpinning methodology
75
and further details on how the Strategy Ontology integrates and relates to the
application, domain, core and foundational ontologies that provide a basis to share
meaning across other organisational concepts.
References
1. Caine J., Von Rosing M..: Introducing the strategy lifecycle: Using ontology and
semiotics to interlink strategy design to strategy execution. (2018).
2. Danford G.: Business Strategy: Let's Talk About: Curious? Embarrassed?
Confused?. Independently published (2018).
3. De Wit B.: Strategy Synthesis: For Leaders. Cengage Learning EMEA (2017).
4. Freedman L.: Strategy a history. Oxford University Press, New York, NY (2013).
5. Godfrey R.D.: Strategic management : a critical introduction. Abingdon : Routledge,
Abingdon; London ; New York (2016).
6. Gray C.: Theory of Strategy. Oxford University Press (2018).
7. Gruber T. R.: Toward principles for the design of ontologies used for knowledge
sharing? 43, 907-928 (1995).
8. Gruninger M.: Integrated ontologies for enterprise modelling. In: Enterprise
engineering and integration, pp. 368-377. Springer (1997).
9. Kotovs V.: Forty years of software reuse. 38, 153-160 (2009).
10. LEADing Practice: LEADing practice strategy reference content (LEAD-
ES10001PG). (2009).
11. Mintzberg H.: The fall and rise of strategic planning. Harv.Bus.Rev. 72, 107 (1994).
12. Porter M.: From competitive advantage to corporate strategy. Harv.Bus.Rev. (1987).
13. Porter M. E.: What is strategy? Harv.Bus.Rev. 74, 61 (1996).
14. Robert M.: Strategy pure and simple: how winning CEOs outthink their competition.
McGraw-Hill New York, NY (1993).
15. Steiner G.: Strategic planning. what every manager should know. (1979).
16. Tregoe B.B., Zimmerman J.W.: Top management strategy: What it is and how to
make it work. Simon & Schuster (1980).
17. Urwick L. F.: The span of control. 4, 101-113 (1957).
18. von Rosing M., Laurier W.: An introduction to the business ontology. 3, (2015).
19. Liddell H.G., Scott R.: A greek-english lexicon. New York: American Book (1897).
20. Fox M. S., Grüninger M.: Ontologies for enterprise integration. , 82-89 (1994).
21. Hart B.: Liddell. strategy. (1967).
22. Treacy M., Wisrsema F.: The Discipline of Market Leaders: Choose Your
Customers, Narrow Your Focus, Dominate Your Market Paperback . Basic Books
(1997).
23. Duggal J.: The DNA of Strategy Execution . John Wiley & Sons (2018).
24. Bridges: Strategy implementation Survey Results 2016. http://www.implementation-
hub.com/resources/implementation-surveys# (2016).
25. Jansen H.: 94 mind-blowing strategy execution
stats. https://boardview.io/blog/strategy-execution-stats/ (2016).
26. Carlin L.: Is your strategy execution designed to
fail?. http://www.futurebuildersgroup.com/strategy-execution-failure/ (2014).
76
27. Heuser, B. (2010). The evolution of strategy: thinking war from antiquity to the
present. Cambridge University Press.
28. McKinsey: Changing change management. https://www.mckinsey.com/featured-
insights/leadership/changing-change-management (2015).
29. Krigsman M.: Worldwide cost of IT failure (revisited): $3
trillion. https://www.zdnet.com/article/worldwide-cost-of-it-failure-revisited-3-
trillion/ (2012).
30. UN: Combining social protection with pro-poor investments can eradicate world
hunger by 2030 – UN. https://news.un.org/en/story/2015/07/503962-combining-
social-protection-pro-poor-investments-can-eradicate-world-hunger (2015).
31. Kim G.: Top 11 things you need to know about
DevOps. https://www.thinkhdi.com/~/media/HDICorp/Files/White-Papers/whtppr-
1112-devops-kim.pdf (n.d).
32. DCED: Link between economic growth and employment. https://www.enterprise-
development.org/what-works-and-why/evidence-framework/increased-productivity-
creates-economic-growth/ (n.d).
33. HBR: Digital transformation is racing ahead and no industry is
immune. https://hbr.org/sponsored/2017/07/digital-transformation-is-racing-ahead-
and-no-industry-is-immune-2 (2017).
34. Nanterme P.: Digital disruption has only just
begun. https://www.weforum.org/agenda/2016/01/digital-disruption-has-only-just-
begun/ (2016).
35. McGrath R., Dalzell-Payne P.: Incumbents strike
back. https://www.ibm.com/services/insights/c-suite-study (2018).
36. Borst W. N., Borst W.N., Akkermans J.M., Faculty of Electrical Engineering,
Mathematics,& Computer Science: Construction of engineering ontologies for
knowledge sharing and reuse. (1997).
37. Powell T. C.: Strategy without ontology. Strategic Manage.J. 24, 285-291 (2003).
38. Buzzell R. D.: The PIMS program of strategy research: A retrospective appraisal. 57,
478-483 (2004).
39. Noy N. F., McGuinness D.L.: Ontology development 101: A guide to creating your
first ontology. (2001).
40. Kim H.: Developing ontologies to enable knowledge management: Integrating
business process and data driven approaches. 72 (2000).
41. Simandan D.: Iterative lagged asymmetric responses in strategic management and
long-range planning. , 0961463X17752652 (2018).
42. Johnson G.: Exploring strategy : text and cases. Harlow, England : Pearson, (2017).
43. Gómez-Pérez A., Ramos J., Rodríguez-Pascual A., Vilches-Blázquez L.: The IGN-E
case: Integrating through a hidden ontology. In: Headway in spatial data handling, pp.
417-435. Springer (2008).
44. Gröner G., Jekjantuk N., Walter T., Parreiras F.S., Pan J.Z.: Metamodelling and
ontologies (∗). In: Ontology-driven software development. Springer (2013).
45. Pan J.Z., Staab S., Aßmann U., Ebert J., Zhao Y.: Ontology-driven software
development. Springer Science & Business Media (2012).
77