Is there one best strategy in any given situation, or does it depend on whom the strategy is for? This question should be at the heart of every discussion about strategy. Consider the well-known story of Deutsche B;rse’s failed effort to take over the London Stock Exchange (LSE) in 2005. Whereas German institutional shareholders generally supported the cross-border consolidation strategy proposed by CEO Dr. Werner Seifert and approved by the supervisory board, a group of non-German hedge funds led by TCI (The Children’s Investment Fund Management) and Atticus Capital decided to actively oppose the strategic direction of the firm and campaign that the money be used instead for a share repurchase program. Over a period of three months, TCI and other opponents of the consolidation strategy were able to gain enough influence over the shareholding body to persuade management to withdraw the offer for the LSE, agree to a share repurchase, and to force the replacement of Dr. Seifert and the resignation of Dr. Rolf-E. Breuer, chairman of the supervisory board. Triggered by an attempt to raise the stakes and make Deutsche B;rse a leading global player, the LSE episode in fact brought about a change in the balance of power among shareholders, resulting in a strategic about-face and a change in the leadership of the firm. Ironically, of all firms not to take the diverse interests of shareholders into account in the making of strategy, with Deutsche Börse it was a stock exchange that suffered one of recent history’s most remarkable reversals at the hands of a group of shareholders determined to defend their view of the right strategy.

In general, researchers and practitioners work with the assumption that the choice of the right strategy does not depend on the interests of the actors involved: there is one economically best strategy for the firm. If, however, shareholders differ among themselves and differ with managers in terms of their preferences as described in the case of Deutsche Börse, then what is best for one subgroup may not be good, or even acceptable, for others. Depending on which coalition emerges as dominant, strategic choices may in fact impair the long-term prospects of the firm. If strategy is not neutral – that is, not purely economic, but determined by a political process with its own rationality – then we cannot avoid asking the question, “strategy for whom?”