Strategic Management and Business Policy

Sikkim Manipal University

Manipal
INSPIRED BY LIFE

Directorate of Distance Education

Subject Code: MB 0052 Edition: Spring 2010

Book ID: B1699

Sikkim Manipal University

Directorate of Distance Education
Department of Management Studies Board of Studies Chairman HOD, Department of Management Studies SMU DDE Additional Registrar SMU DDE Dr T.V. Narasimha Rao Adjunct Faculty and Advisor SMU DDE Prof. K.V. Varambally Director Manipal Institute of Management Manipal Edition: Spring 2010 Print: Printed at Manipal Technologies Ltd Published on behalf of Sikkim Manipal University, Gangtok, Sikkim by Vikas Publishing House Pvt Ltd Author: A Nag Copyright Reserved, 2012
All rights reserved. No part of this publication which is material protected by this copyright notice may be reproduced or transmitted or utilized or stored in any form or by any means now known or hereinafter invented, electronic, digital or mechanical, including photocopying, scanning, recording or by any information storage or retrieval system, without prior written permission from the Publisher. Information contained in this book has been published by VIKAS Publishing House Pvt. Ltd. and has been obtained by its Authors from sources believed to be reliable and are correct to the best of their knowledge. However, the Publisher and its Authors shall in no event be liable for any errors, omissions or damages arising out of use of this information and specifically disclaim any implied warranties or merchantability or fitness for any particular use.

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Authors Profile Dr. A Nag is currently a strategy consultant and teaches strategic management, strategic marketing and international business strategy in various institutes. He is a PhD in Economics from Jadavpur University, Kolkata. He was an Assistant Professor, BITS Pilani, and then Associate Professor, XLRI, Jamshedpur. Dr Nag moved to the industry and joined MMTC as Economic Advisor (Metals) and then moved to line functionsfirst as GM and later as Chief General Manager, Metals Division. Subsequently, he joined Hindalco Industries as Advisor (Commercial). Later, he became the Director of Nihon Ispat Pvt. Ltd. He subsequently returned to academics as Senior Professor, Strategy Area, IMM, New Delhi, and later served as Director (Research and Consultancy) in the same institute. He has also been a visiting faculty at IIFT, IIT (Delhi) and Western International University, USA. A prolific writer, Dr Nag has contributed many papers and articles in national and international journals and has published a number of books on management, marketing and strategy. Peer Reviewed by: Dr. Narendranath Menon has been a Senior Faculty member at the Institute of Public Enterprise at the postgraduate level. Earlier, he retired as a professor from the Department of Business Management, Osmania University. His areas of interest include Strategic Management, in which he has handled several courses. He has published several articles in different journals. In House Content Review Team Dr. Sudhakar G. P HOD, Department of Management Studies SMU DDE Shubha. P Assistant Professor, Department of Management Studies SMU DDE

Contents
Unit 1 Understanding Corporate Strategy Unit 2 Strategic Management Process Unit 3 Business Policy, Strategic Management and Business Continuity Planning Unit 4 Corporate Strategy and Corporate Governance Unit 5 Corporate Mission, Objectives and Responsibility Unit 6 Internal Competences and Resources Unit 7 External Environmental Factors Unit 8 Stability Strategies 193221 163192 133162 103131 75102 4773 1946 118

Strategic Management and Business Policy

Contents

Unit 9 Strategy for Managing Change Unit 10 Expansion Strategies Unit 11 Industry and Competition Analysis Unit 12 Selection and Activation of Strategy Unit 13 Implementation: Structures and Systems Unit 14 Implementation: Functional and Operational Unit 15 Implementation: Behavioural and Values Unit 16 Strategy Evaluation and Control 435464 405433 375404 345374 313343 279312 249278 223248

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Strategic Management and Business Policy Course Description

Any discussion on business and management today is incomplete without discussing two major forces: one is competition, and the other is strategy. Both these forces coexist or are correlated; in simple words, we can say that it is competition that drives strategy. For an organization to survive and grow, it is important to have a strategy. A strategy is a plan, method, or series of maneuvers or stratagems forobtaining a specific goal or result. You must have seen or read about the well-known Fortune 500 list, an annual list compiled and published by Fortune magazine that ranks the top 500 US companies. Every year, some new names are added and some others are deleted from this prestigious list. One common reason, which explains both the inclusions and the deletions, is the strategyof the respective companies. So, strategy plays a vital role in organizations. The various units in this book try to explain strategy to make the understanding of the concept and its application clearer and more meaningful.

Course Objectives
At the completion of this course, the student will be able to explain corporate strategy, its definition and nature. The student will be able to describe the corporate strategy in different types of organizations, as well as differentiate between policy, strategy and tactics, between strategic planning and strategic management, and corporate strategy and corporate governance. The student will be able to analyse strategy and its various aspects. Specifically, the student will learn to: discuss corporate strategy, its definition and nature and the strategic management process define corporate mission and corporate vision, as well as corporate philosophy analyse the major factors of environment that impact a business This book, Strategic Management and Business Policy comprises 16 units that cover various aspects of strategic management. Unit 1 - Understanding Corporate Strategy: This unit discusses corporate strategy, its definition and nature, as well as its levels in an organization. Unit 2 - Strategic Management Process: This unit gives an overview of the strategic management process in terms of different approaches, levels in SMP, planned or intended and realized strategies, the people involved, roles of the chief executive, board of directors and consultants, among others. Unit 3 - Business Policy, Strategic Management and Business Continuity Planning: This unit deals with the difference between policy, strategy and tactics, between strategic planning and strategic management. It discusses the benefits and limitations of strategic management, explains the role of business ethics in strategic management and describes business continuity planning. Unit 4 - Corporate Strategy and Corporate Governance: This unit explains the conceptual difference between corporate strategy and corporate governance, and discusses the growing importance of corporate governance. Unit 5 - Corporate Mission, Objectives and Responsibility: This unit define what is business, explains the terms corporate mission and corporate vision, as well as corporate philosophy. It also discusses the corporate objectives and goals of a company. Unit 6 - Internal Competences and Resources: This unit defines the competence of an organization and the various types of competences.
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Course Objectives

Unit 7 - External Environmental Factors: This unit analyses the major factors of environment that impact a business, explains the techniques of environmental scanning and discusses environment forecasting. Unit 8 - Stability Strategies: This unit discusses the concept and meaning of stability strategies, analyses the portfolio model the BCG, and differentiates among four generic strategies and modern modifications. Unit 9 - Strategy for Managing Change: This unit analyses corporate restructuring as a strategy, diiscusses restructuring in the Indian corporate sector and the corporate turnaround strategy. Unit 10 - Expansion Strategies: This unit highlights alternative expansion strategies, analyses different diversification strategies and focuses on joint venture and issues involved in it. Unit 11 - Industry and Competition Analysis: This unit discusses the different industry types and structures, analyses industry structure and competitive strategy and shows how to conduct industry analysis. Unit 12 - Selection and Activation of Strategy: This unit analyses the process of strategy choice or selection and discusses strategy selection factors or criteria. Unit 13: Implementation: Structures and Systems This unit discusses the structure of an organization and various structural types and the concept and tool of the virtual organization. Unit 14 - Implementation: Functional and Operational: This unit discusses the issues related to functional implementation and operational implementation of strategy. Unit 15 - Implementation: Behavioural and Values: This unit analyses the role of leadership in strategy implementation, discusses the role of organizational culture in implementation of strategy and focuses on the role of business ethics and values in implementation. Unit 16 - Strategy Evaluation and Control: This unit discusses the evaluation and control process in an organization and identifies the evaluation and control criteria: pre-implementation and post-implementation.

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