Strategic Management Notes PDF

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STRATEGIC MANAGEMENT NOTESWhat is strategy?  According to Glueck: “Strategic Management is a stream of decisions and actions which leads to the development of an effective strategy or strategies to help achieve corporate objectives.”  According to Hofer: “Strategic Management is the process which ...

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STRATEGIC MANAGEMENT NOTES What is strategy?  According to Glueck: “Strategic Management is a stream of decisions and actions which leads to the development of an effective strategy or strategies to help achieve corporate objectives.”  According to Hofer: “Strategic Management is the process which deals with the fundamental organizational renewal and growth with the development of strategies, structures and systems necessary to achieve such renewal and growth and with the organizational systems needed to effectively manage the strategy formulation and implementation processes.”  According to Ansoff: “Strategic Management is a systematic approach to a major and increasingly important responsibility of general management to position and relate the firm to its environment in a way that will assure its continued success and make it secure from surprises.” Strategy (Strategos= direction of military force). STRATEGIC MANAGEMENT Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance. Strategic management is nothing but planning for both predictable as well as unfeasible contingencies It is applicable to both small as well as large organizations as even the smallest organization face competition and, by formulating and implementing appropriate strategies, they can attain sustainable competitive advantage. Strategic Management -Meaning.  Strategic management is a continuous process that: evaluates and controls the business and the industries in which an organization is involved;  evaluates its competitors and sets goals and strategies to meet all existing and potential competitors;  Re evaluates strategies on a regular basis to determine how it has been implemented and whether it was successful or does it needs replacement.  Strategic management provides guidance and future direction to organization. It makes strategic decisions. It facilitates coordinated allocation of the organization by turning strategic into action.  It is a way in which strategists set the objectives and proceed about attaining them.  Strategic Management gives a broader perspective to the employees of an organization and they can better understand how their job fits into the entire organizational plan and how it is co-related to other organizational members Strategic Management - Features • Conscious Process • Goal Oriented Process • Facilitates decision making

• Primary Process • Pervasive Process • Continuous process • Organized and systemized method of managing • Based on structure of plans • Follow systems approach • Future oriented • Dynamic process • Long range time span • Complex STRATEGIC INTENT:

VISION: It is a position that a company would like to achieve in the distant future (10-15 years). It is a powerful motivator to action. Vision of Walt Disney: To make others happy. It is a category of intentions that are broad, all-inclusive and forward-thinking. Why vision is needed? a. Good visions are inspiring. b. Good visions help in creation of a common identity and a shared sense of purpose. c. Good visions are competitive, original and unique. d. It promotes risk-taking and experimentation. e. It promotes long-term thinking... IO

MISSION:

Vision is a forward-thinking view of what an organization wants to be. Mission is what an organization is and why it exists. Mission is a statement that defines the role an organization plays in a society. Eg: A newspaper & TV news editor: mission- information. It is the purpose or reason for the organization’s existence.. Characteristics of Mission: 1. It should be feasible. 2. It should be precise; not too narrow & broad. 3. It should be clear. 4. It should be motivating. 5. It should be distinctive; unique from competitors. 6. It should indicate how objectives are to be achieved. Goals & Objectives: • Goals & Objectives represent a future state or an outcome of efforts put at present. Objectives are the ends that state how goals will be achieved. • Goals are generalized & qualitative. Objectives are concrete, measurable and specific. • Objectives make the goals operational. Roles of Objectives: 1. Objectives define the organization’s relation with environment. 2. It helps an organization to achieve its vision & mission. 3. It provides the basis for strategic decision-making. 4. It provides the standards of performance appraisal...

Characteristics of objectives: 1. It should be understandable. 2. It should be concrete and specific. 3. It should be related to a time-frame. 4. It should be measurable. 5. It should be challenging. 6. It should be set within limits. 3 Stages of the Strategic Management Process: STRATEGY FORMULATION  STRATEGY IMPLEMENTATION  STRATEGY EVALUATION Strategy Formulation

Issues in Strategy Formulation Businesses to enter  Businesses to abandon  Allocation of resources  Expansion or diversification  International markets  Mergers or joint ventures  Avoidance of hostile takeover Strategy Implementation

Issues Strategy Implementation- Action Stage of Strategic Management

Mobilization of employees& managers  Most difcult stage Interpersonal skills critical

Strategic Evaluation

Scope of strategic management

 Strategic issues require top-management decisions  Strategic issues involve the allocation of large amounts of company resources  Strategic issues are likely to have signifcant impact on the long-term prosperity of the frm  Strategic issues are future oriented  Strategic issues usually have major multifunctional or multi business consequences  Strategic issues necessitate considering factors in the frm's external environment.

Difference between Policy and Strategy The term “policy” should not be considered as synonymous to the term “strategy”. The difference between policy and strategy can be summarized as follows1. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. While strategy is concerned with those organizational decisions which have not been dealt/faced before in same form. 2. Policy formulation is responsibility of top level management. While strategy formulation is basically done by middle level management. 3. Policy deals with routine/daily activities essential for effective and efcient running of an organization. While strategy deals with strategic decisions. 4. Policy is concerned with both thought and actions. While strategy is concerned mostly with action. 5. A policy is what is, or what is not done. While a strategy is the methodology used to achieve a target as prescribed by a policy....