Академический Документы
Профессиональный Документы
Культура Документы
Strategic
Management
Session - 01
What is Strategic Management?
• Strategic Management is the term applied to
describe those activities of an organization
that enable it to meet the challenges of a
constantly changing environment.
• How to manage each functional piece of the business (R&D, supply chain
activities, production, sales and marketing, distribution, finance, and human
resources).
• How to achieve the company’s performance targets.
Characteristics of Strategic Decisions
–Strategic decisions are the long term direction of
the organization.
–Strategic decisions are normally about trying to
achieve some advantage for the organization.
–Strategic decisions are likely to be concerned with
the scope of an organization’s activities.
–Strategic decisions involve matching the activities
of an organization to the environment in which it
operates.
Characteristics of Strategic Decisions
–Strategic decision also involves building on or
stretching an organizational resources and
competencies to create opportunities or to
capitalize on them.
–Strategic Decisions involve major resource
changes for an organization.
–Strategic decisions affect operational decisions.
–Strategic decisions are affected by the values and
expectations of those who have power in and
around the organization.
The Importance of Strategy
• Provides a clear direction, focusing management
decision making
• Adapts the organisation to the changing environment
ensuring it’s continuing survival and success
• Ensures competitiveness through understanding and
adapting to competition
• Focuses in building key competences to meet
customer needs
• Co-ordinates all elements of the business in a
structured planned approach.
Levels of Strategy in an Organisation
There are three different levels on which
strategy can be set
–Corporate Level Strategy
–Business Level Strategy
–Functional Strategies
Hierarchy of Strategy
Hierarchy of Strategy
Hierarchy of Strategy
Levels of Strategy in an Organisation
Corporate Level Strategy
Corporate Strategy can be defined as the
management plan formulated by the highest level
of organization to direct and operate the entire
business organization. It provides the direction for
the business as whole, including all parts of the
business.
Levels of Strategy in an Organisation
• Corporate Strategy is the essence of strategic planning
process.
• It determines the growth objective of the company
• It highlights the pattern of business moves
• It defines how the firm will remain sustainable in the
long run.
• Which businesses and markets should the organisation
operate in?
• How to integrate and structure the business
• Example Racal Electronics’ decision to float off
Vodafone as a separate company
• Uncertainty is inherent in strategy, because nobody can
Levels of Strategy in an Organisation
Business Level Strategy
• Business-level strategy is about how to compete successfully
in particular markets
• At Business-level ALLOCATION of resources among
Functional-level an COORDINATE with the Corporate level
to the ACHIEVEMENT of the Corporate level
OBJECTIVES.
Example: Ford’s Motor Co’s car division – an SBU - launched its
Mondeo model, aimed at fleet car buyers, who had not favored the
Sierra, its predecessor.
Levels of Strategy in an Organisation
Business Level Strategy
• Business-level strategy, which is about how the various
businesses included in the corporate strategy should compete
in their particular markets (for this reason, business-level
strategy is sometimes called ‘competitive strategy’).
Financial Benefits
Organizations using strategic-management concepts are more
profitable and successful than others.
Businesses using strategic-management concepts show
significant improvement in sales, profitability, and productivity
Benefits of Strategic Management
Nonfinancial Benefits
Strategic management offers other benefits, such as
• an enhanced awareness of external threats,
• an improved understanding of competitors’ strategies,
• increased employee productivity,
• reduced resistance to change,
• clearer understanding of performance–reward relationships.
Benefits of Strategic Management
Generally stated that strategic management offers the following
benefits:
• It allows for identification, prioritization, and exploitation of
opportunities.
• It provides an objective view of management problems.
• It represents a framework for improved coordination and control of
activities.
• It minimizes the effects of adverse conditions and changes.
• It allows major decisions to better support established objectives.
• It allows more effective allocation of time and resources to identified
opportunities.
Benefits of Strategic Management
• It creates a framework for internal communication among personnel.
• It helps integrate the behavior of individuals into a total effort.
• It provides a basis for clarifying individual responsibilities.
• It encourages forward thinking.
• It provides a cooperative, integrated, and enthusiastic approach to
tackling problems and opportunities.
• It encourages a favorable attitude toward change.
• It gives a degree of discipline and formality to the management of a
business
Guidelines for the Strategic-Planning
Process to Be Effective
It should be a people process more than a paper process.
It should be a learning process for all managers and employees.
It should be words supported by numbers rather than numbers
supported by words.
It should be simple and no routine.
It should vary assignments, team memberships, meeting formats, and
even the planning calendar.
It should challenge the assumptions underlying the current corporate
strategy.
It should welcome bad news.
Guidelines for the Strategic-Planning
Process to Be Effective
• It should welcome open-mindness and a spirit of inquiry and learning.
• It should not be a bureaucratic mechanism.
• It should not be too formal, predictable, or rigid.
• It should not contain jargon or arcane planning language.
• It should not be a formal system for control.
• It should not disregard qualitative information.
• It should not be controlled by “technicians.”
• Do not pursue too many strategies at once.
• Continually strengthen the “good ethics is good business” policy.