CHAPTER – 1 NOT perfect, flawless, optimal

INTRODUCTION TO STRATEGIC MANAGEMENT 4. Strategy is

Flexible & Pragamatic to meet sudden emergencies.
I. Meaning of 'Management'?
used in Two senses 5. Strategy helps top management to :-
Search, Evaluate, Explore opportunities
SWOT Perceive & Meet threats
KEY GROUP of people in an Set of INTER-RELATED Analysis
organization in charge of affairs of Make full use of strengthens
FUNCTIONS & PROCESS carried
co. out by management of org. Offset weakness
(Resoponsible for making a purpose- (Planning, Organizing, Directing,
full & productive organization) 6. Strategy is formulated at
Staffing, Control )

II. STRATEGY CORPORATE BUSINESS FUNCTIONAL

Strategy
Grand Strategies (CH-4)
Vision, Mission, Goals, Objectives  Stability 

Relates the goals of organization with the  Expansion These grand strategies need to
means of achieving them.  Retrenchment be operationalized by divisional &
 Combination functional managers.
1. GAME PLAN that management uses to:
M O C E O STRATEGY is partly PROACTIVE & Partly REACTIVE
Take Conduct Attract & Compete Achieve
A company's strategy is a BLEND of :-
market its satisfy success organizational
position operations customers fully objectives
PROACTIVE ACTIONS to REACTIONS to unanticipated
2. Long Range BLUEPRINT of Organization’s improve company's financial events & fresh market conditions in
Image [what it wants to be ?] performance & market position dynamic environment.
[planned strategy] [Adaptive strategy]
Desired Direction [what it wants to do?]
Destination [where it wants to go?] Previously initiated actions & Some of company's strategy is also
business approaches which meant developed as a reasoned response to
continuation (+) newly initiated an unforseen development
3. Strategy – Reduces uncertainty and complexity caused by changes in
actions [Deliberate & Proactive] [strategic reaction/ adjustment]
environment

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 III. STRATEGIC MANAGEMENT D. BENEFITS of Strategic Management (Like First Love)
 DPDP LCD
Managerial Process :- 2. PROACTIVE 3. Framework
1. Developing strategic vision, mission, goals, objective instead of for all major 4. Prepare for
2. Strategic Analysis (internal/external) 1. Provides reactive DECISIONS the
3. Strategy Formulation DIRETION   FUTURE/PA
4. Strategy Implementation to company Organizations Helps provide TH FINDER
5. Strategy Evaluation & control.  analyze and guidance on 
Helps define take actions ‘what it is Helps identify
A. Overall objective of strategic Management vision & mission control their trying to do ?’ available
and set destiny. opportunities
To create realistic goals/
To guide the company successfully and ways to
competitive objectives
through all changes in environment reach them
advantage
B. IMPORTANCE of strategic Management

Enabling Organization –
1. Perform better than others and its own past 5. Corporate 6. Improve 7. Develop certain
2. Delivering superior valve to stakeholders. DEFENCE LONGETIVITY core
3. Survival & growth of organization Mechanism of Business COMPETENCIES
4. Change & Adapt to changing conditions.   
Helps Helps compete in Helps develop Core
C. LIMITATIONS of Strategic Management (Like First Love) organization dynamic competencies and
avoid costly environment. competitive
Environment is Difficult to understand complex environment & how it will
mistakes in advantage to
HIGHLY shape in future. Future estimate about Business can go
COMPLEX absolutely wrong in turbulent environment product/market facilitate survival &
choices growth
TIME Consuming Considerable time goes in planning & communicating
Process strategies that negatively impact daily operation

Experts need to be engaged for strategic analysis, design

COSTLY Process
strategies & implement them.

Estimation of
COMPETITIVE Difficult to estimate strategic response of competitors
RESPONSE is because most decisions taken by top Mgt secretly.
difficult

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 IV. STRATEGIC INTENT B. MISSION
 
 Refers to the PURPOSE of what organization strives for?'  Focuses on PRESENT Business scope- “What Business are we in
 Define - what we want to do? & why we want to do?
and what we do?

Represents Strategic Intent  Describes organization's present capabilities, customer focus,
 Philosophical Base of S.M. activities & business makeup.
1. Implies Purpose of org.
 Explains the reason for EXISTENCE of a co.
2. Gives a view of means to achieve vision.
3. what org desires to attain in future  Should be precise, clear, feasible, distinctive. & Motivating
4. what organization Strives for?
Useful Pointers to write Mission Statement
5. Indicates org's target of long-term market position.
Vision /mission at corporate level
 Strategic Intent
can be in form of Business definition or Business model Give organization its
at Business level. own Special Identity, Determines what needs are Unique to the
Business Emphasis and we trying to satisfy, which Organization
Path for development customer group is targeted.
A. VISION Which technology is being
 used

1. Blueprint of the future position.

2. ‘Where we are to go & why it makes good business sense # Importance of Mission Statement:
3. Communicates management's aspirations to Stakeholders. 1) Unanimity of Purpose
4. Top management’s views about company's direction & product- 2) Serves as a focal point of direction
customer-market-technologies focus. 3) Basis for motivating the use of resources.
5. Helps steer energies of employees in one common direction. 4) Basis for allocating resources
6. Shapes the organizational identity. 5) Establishes work climate and Corporate Culture
6) Translation of Purpose into Goals (for assessment and control purpose)
# Essentials of Strategic Vision 7) Translation of Goals into work structure.

Think creatively Exercise of an Creates Clearly

about how to intelligent enthusiasm illuminates
prepare co. for entrepreneur among members direction of
future of org. org.

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 IV. STRATEGIC INTENT

GOALS & OBJECTIVES VALUES


Goals Objectives 1. Fundamental Principles & Standards  guide the
 Open Ended attributes that  More specific & translates behaviour & decision making  Individual & org.
denote future outcome goals into LT & ST perspective 2. Core Values are Inherent and Sacred; they can
 END Result that org. wants to  Time Based, Measurable never be compromised.
achieve target for Goals Achievement 3. Values reflect Values of Company’s Founders
4. Values remain at Core/ Centre & V/M/G/0 and
helps put them to action.
OBJECTIVES  1. Organisation’s performance targets. 5. Sets the tone for how people think & behave.
2. Yardsticks to track progress. 6. Create a sense of shared purpose.
3. Acts as Benchmark to guide org’s activity. 7. Helps define company's culture.
8. Values include Integrity, Trust, Accountability,
Characteristics of objectives: SAAS Teri C4te Humility, Innovation or & Diversity.
S → Basis for strategic decision making
# Values have both
A → Facilitates achievement of V/M.
→Internal Implication – Influences Employee Behaviour,
A → Standard for Performance Appraisal.
Build Trust, boost morale, create consistent workplace
S → Specific & Concrete
culture.
T → Time Bound
→External Implication – Impact how customer,
C → Controllable & Measurable
investors, society perceive company
C → Challenging
C → Corelates with each other # Values and Intent:
C → Set within constraints of org. Values drive Intent. Values are broader and more
Fundamental than Intent.
Long – Term objectives: P3 E2 CT
1. Profitability, 2. Productivity, 3. Public Responsibility
4. Employee Development 5. Employee Relations
6. Competitive Position 7. Technological leadership.

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V. STRATEGIC LEVELS IN ORGANIZATION
Functional Level 1. Responsibility for specific
Functional Manages business function (confined to
Corporate Level 1. Oversee development of strategies & Staff one or activity)
for whole Org.  2. Develop functional level
CEO, other
2. Role & Corporate Level- Specific Business strategies to fulfill objectives
senior Exec,
 Defines vision & mission for whole functions: - HR, of B.L & C.L
BOD & Corporate Purchasing,
org. 3. Provides valuable info to BL/CL
staff Product, to develop realistic strategies.
 What Business we should be in.
development, [Because they are close to
  Allocating Resources among diff.
customer service, customer]
CEO- guardians of business.
Marketing etc. 4. Responsible for strategies
shareholders  Formulating & implementing
welfare. Ensure that implementation and hence
strategies that span individual [How to implement should be included in Strategy
strategies maximize business. Business Strategy ] Formulation.
SHs wealth.  providing Leadership for Org. as a
[where to compete] whole.
 Divestment and Liquidation NETWORK OF RELATIONSHIP BETWEEN
strategies THE THREE LEVELS ?
C.L. Management
3. Link between
Shareholder
Functional & Horizontal Matrix
Divisional  
 Structure all levels Grid like structure
Business Level 1. Head of division. Function/Division in same position. Team formed with
Divisional 2. Translates the General statement of led by Functional Leads to openness people from
Managers & direction from corporate level into or divisional head & transparency. various
Staff concrete strategic for Particular who reports to (suitable for departments for
[How to compete] business. corporate level startups) temporary task
3. C.L  Strategies that span individual head of business. based project.
business.
Useful for LARGE
B.L  Strategies specific to particular
conglomerates.
business.

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