Strategic

Management
 Strategic Management

• Organized effort to use company resources effectively

• Involves the evaluation and reorganization of resources to achieve new objectives

• Calls for examination of the competitive landscape, internal organization and existing

strategies

• Goal of instituting practices company- wide for better results

 Career Opportunities

• Strategy / Management Consultant – ₹. 15 to 30 LPA

• Chief Operating Officer (COO) / Business Head - ₹. 30 to 50 LPA

• Business Development / Strategy director – 20 to 40 LPA

• Product strategy manager – 15 to 25 LPA

 Units

Introduction Corporate Policy and Planning

Environmental Analysis

Strategy Formulation Analysis Strategy Implementation

 Contents Unit 1 - Introduction
1. Introduction - Strategy
2. Strategic Management Process
3. Developing a strategic vision
4. Mission – Setting Objectives
5. Strategies and Tactics
6. Importance of Corporate strategy
7. The 7S Framework
8. Corporate Governance
9. Board of Directors: Role and Functions
10. Board Functioning
11. Top Management: Role and Skills.
 Strategy Meaning
Strategy as “ long range blueprint of an organization’s desired image, direction and destination. i.e what it
wants to be, what it wants to do, how it wants to do things, and where it wants to go.
Strategy provides an integrated framework for the top management to search for, evaluate and exploit
beneficial opportunities, to perceive and meet potential threat and crisis.
In large organizations strategies are formulated at
1, the Corporate
2, Divisional and
3, Functional Levels
Corporate Strategies are formulated by the top managers.
Such strategies include the determination of the plans for expansion and
growth, vertical and horizontal integration, Diversification, takeovers and
mergers, new investment, divestment areas, R&D projects.
 Strategy
Strategy - definition.
- Strategic management is defined as the set of decisions and actions resulting in formulation and
implementation of strategies designed to achieve the objectives of an organisation.
- Pearce and Robinson
- 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 which will assure its
continued success and make it secure from surprises.
- H. Igor Ansoff
- Strategic management is concerned with making decisions about organization's future direction and
implementing those decisions.
- Lloyd L. Byars.
- A Unified, comprehensive and integrated plan designed to assure that the basic Objectives of the
enterprise are achieved.
- William. F. Glueck
 Strategy Concept
Strategy is partly proactive and partly reactive.
- Proactive actions on the part of managers to improve the company’s market position and financial
performance
- Reactions to unanticipated developments and fresh market conditions in the dynamic business
environment
Evolution of Strategic Management
 Strategy and Strategic Management

Feature Strategy Strategic Management

"What " and "Where" the blueprint or "How" - ongoing process of putting the plan to
Concept
direction work

Focus Long term goals, vision and positioning Short term adjustments and long term milestones

Analytical and Philosophical - requires Action Oriented - involves Execution, resource

Nature
brainstorming and decision making allocation, continuous monitoring

Detailed execution drill down to specific

Scope Broad, Organization Wide
departments

Handled by Top level executives and

Responsibility Executed by all levels of management
board of directors
 Process of Strategic Management
- Process of Strategic management is described as a continuous cycle of Formulation,

Implementation, Evaluation

- It is not a one time plan but an ongoing system for aligning goals, capabilities, actions

and performance under changing internal and external condition.

- Formulation Stage = Vision, Mission, External and Internal analysis, long term

objectives, strategic choice

- Implementation Stage = Annual Objectives, policies,

structure, culture, motivation, resource allocation

- Evaluation Stage = Review assumptions,

measure performance, take corrective action

 Benefits of Strategic Management
1. Financial Benefits – leads to better financial performance
2. Clarity in Objectives – focuses attention on organizational objectives, directions, actions
3. Offsetting Uncertainty – forecasting future
4. Minimum resistance to change – involvement of people
5. Improved quality of strategic decisions – group interaction facilitates generation and screening of
strategic options
6. Prevention of problems – Anticipate problems
7. Higher employee motivation – helps to clarify roles by avoiding role ambiguity and role conflict
8. Competitive Advantage – make optimum use of competencies and resources
9. Unifying force – unite and coordinate different parts of an organization
10. Resource Optimization – ensure a rational allocation
11. Criteria for Evaluation – defines the desired level of performance
12. Public Image – what they want to become, how to enjoy trust and confidence of stakeholders.
 Strategic Intent
* Strategic intent can be understood as the Philosophical base of Strategic management
* Strategic Intent provides the framework within the firm would adopt a predetermined direction and
would operate to achieve strategic objectives.
* Strategic intent gives an idea of what an organization desires to attain in future.
* Strategic intent is generally stated in broad terms but when stated in precise terms it is an expressions of
aims to be achieved operationally.
* i..e Vision
Mission
Goals and Objectives
Values/ Value system.
 Strategic Vision
Definition of Vision
- According to Kotter, Vision is a description of something (an organization, a corporate culture, a
business, a technology, an activity) in the future.
- According to Miller and dess “ vision means the category of intentions that are broad, all
inclusive and forward thinking”
- Strategic vision delineates management’s aspirations for the business, providing a panoramic
view of “ where we are to go”.
- Convincing rationale for why this makes good business sense for the company
Features of vision
• reflects oragnization intentions or desires or expectations
• Mental picture of the desired future
• Sets out core set of principles
• Guiding philosophy stemming from core beliefs and values
• Set of ideal priorities that make the organization special and unique
• Vision statement Provides “ who are we”, “what we want to become”,
“Where we are headed”
 Essentials of Good vision
* Realistic * Appropriate
* Charter * Credible
* Motivational * Attractive
* Articulated * Unique

Developing vision (Envisioning)

i, Conducting vision audit iii, developing the future scenarios
ii, Identifying the context iv, Generating alternative visions

v, Choosing a final vision

 Components of vision

Core values – deeply held values of organization

Core Purpose – reason for existence of organization

Visionary goals – milestones that company has to achieve in future

target – Quantitative and Qualitative goals

Common enemy – Overtaking a rival

Role mode – become like another industry

Internal transformation – replacing vision

 Mission
Definition of Vision

- According to thompson “ Mission is the essential purpose of the organization concerning

particularly why it is in existence, the nature of the business (es) it is in and the customers it
seeks to serve and satisfy”
- According to pearson and Robinson “ the company mission is the fundamental unique purpose
that sets a business apart from other firms of its types and identifies the scope of its operations
in product and market terms.
- Mission provides answer to questions like
- What is our business ?
- What it will be ?
- What it should be ?
 Why Mission ?
1. To ensure unanimity of purpose within the organization
2. To develop a basis, or standard for allocating organizational resources
3. Provide basis for motivating the use of organization’s resources
4. Establish a general tone or organizational climate, to suggest a business
like operation
5. facilitate the translation of objective and goals into a work structure
involving the assignment of tasks to responsible elements within the
organization
Eg. HDFC has two fold mission
1. To be preferred provider of banking services for target retail and
wholesale customer segments
2. To achieve healthy growth in profitability, consistent with the bank’s
risk appetite.
 Formulating a Mission statement
The main elements of the mission statement are as follows:
1. Organisation’s self concept – Perception of how society will respond to it, defines organisation’s
role in industry
2. Organisation’s philosophy – the philosophy or etho or creed of an organization is a set of
assumptions, beliefs, values, aspirations and priorities.
Eg. Concern for all stakeholders is the philosophy of ITC limited
3. Organisation’s Image – Image which an organisation wants to project in public mind is an
integral part of mission statement
Eg. Wipro – “we will adhere to the highest level of business integrity and ethics in all our dealings”
4. Organisation’s business – Nature of Business in terms of products/Services, market segment and
technology
5. Organisation’s Objectives – Basic objectives like survival, growth and profitability are included.
 Essentials of good Mission
A good mission must fulfill the following requirements:

1. Clear

2. Precise

3. Feasible

4. Inspiring

5. Focus on customer rather than the product

6. Distinctive
 Role of Objectives
Objectives play a significant role in strategic management in the following ways;
1. Define Relationship – Organisation with its environment, reflects commitment to stakeholders
2. Operationalize vision and mission - helps to pursue vision and mission
3. Provide basis for decision making – direct the attention of decision makers where decision
strategies are needed
4. Motivate People – Source of Inspiration for members
5. Facilitate Decentralization – higher level managers to delegate decision making authority to
managers at operating levels
6. Serve as control standards – time bound targets serve as standard against which performance
can be assessed
7. Assist Voluntary Co-ordination – clearly specified and mutually agreed upon objectives help
integrate individual and group efforts.
Strategy Vs Tactics
 Corporate Governance
Corporate governance plays a crucial role in strategic management as it
establishes the framework for
- Decision making
- Accountability
- Long term organizational success
- Ensures companies operate transparently
- Ethically
- In alignment with the stakeholders interest
Definition
According to Wheelen, Hunger, Hoffman, and Bamford (2018) Corporate
governance provides the mechanisms through which an organization’s
objectives are set, pursued, and monitored, influencing strategic planning and
execution.
 Corporate governance and Strategic Management
Corporate governance directly impacts strategic management by shaping decision making,
resource allocation, and business policies. The following are key ways in which governance
influences strategic management;

1. Aligning Corporate strategy with stakeholder interest

2. Enhancing Decision making and strategic leadership

3. Strengthening Risk management and Corporate Resilience

4. Improving financial performance and market confidence

5. Fostering innovation and sustainable growth

 Board of Directors
According to Section 2 (10) of the companies act, 2013 (in short act) “ board of
directors” or “Board” in relation to a company, means collective body of the
directors of the company.
According to Section 2(34) “director” means a director appointed to the board of
the company.
A, Minimum number of Directors:
Board of Directors
- In case of a Public limited company – 3 directors
- In case of a private company – 2 directors
- In case of a one person company (OPC) – 1 director
B, Maximum number of directors – 15 Directors
if the company wants to appoint more than 15 directors, it can do so after passing a special
resolution.
C, Woman Director:
At least one women director shall be on the board of such classes of companies as has been
prescribed in rule 3 of the companies (Appointment and Qualifications of directors) rules,
2014[Second Proviso to section 149(1)]. Rule 3 provides that the following classes of companies shall
appoint at least one woman director Every listed company, every other public company having ( paid
up share capital of 100 crore or more), turnover of 300 crore or more.
D, Resident Director:
Board of Directors
Every company shall have at least one director who stays in India for a period total
period of not less than 182 days during the financial year
E, Independent Director:
Specified public companies are required to appoint independent directors on
their board with a view to boost the level of corporate governance
F, Interested Director:
An interested director is one among the other directors who constitute Board of directors. When an
existing director becomes interested in a transaction of the company.
G, Executive and Non Executive Directors:
The Executive directors are responsible for managing different business operations undertaken by the
company. Independent directors are a type of non executive directors, are not active as executive
directors of the company.
Establish Vision,
Mission and Set Strategy Decision Delegate to
Policy Making
values Structure Making Management

Roles and Responsibilities of BOD

 Responsibilities of BOD
 Approve the corporate strategy
 Test Business model and identify key performance measures
 Identify risk areas and oversee risk management
 Plan for and select new executives
 Design executive compensation packages
 Ensure the integrity of published financial statements
 Approve major asset purchases
 Protect company assets and reputation
 Represent the interest of shareholders
 Ensure the company complies with laws and codes
 Free from conflicts that comprise judgement
 Able to take positions in opposition to management
 Represent companies view and account to public
 Leading the company properly
 Establish appropriate internal control
 Decide formal schedule of matters of the meeting
 Determine the company’s mission purpose
 Select and appoint CEO, Chairman and other board director etc.
Powers of Board of Directors
 Top Management
 Top management consists of managers who work at the highest level of hierarchy.

 It composed comparatively small group of people

 Responsible for the overall management of the organization

 Managers at this level are generally Chief Executives officers, President,

Vice Presidents, General managers, Managing directors .etc…

 Unlike other managers, top management are accountable to none other than the owners

of the resources used by the organization.

 The top level manager is dependent on the work of all of his or her subordinates to

accomplish the organization’s goals and mission

 Skills required for Top Management
Employee Delegation
Development Senior Leadership
Skills

Emotional C-Suite
Intelligence Communication &
Presentation Skills

Decision Making Change

Management Skills

Strategic Thinking Subject Matter

& Foresight Expertise
 Roles of Top Management
1. Chief Executive Officer (CEO)
2. Chief Operating Officer (COO)
3. Chief Financial Officer (CFO)
4. Chief Information Officer(CIO)
5. Chief Technology Officer (CTO)
6. Chief Human Resources Officer (CHRO)
7. Chief Marketing Officer (CMO)
8. Chief Sustainability Officer (CSO)
9. Chief Wellbeing Officer (CWBO)
10. Chief business Development Officer (CBDO)
11. Chief Risk Officer (CRO)
12. Chief AI officer (CAIO)
 Responsibilities of Top Managements
• Strategic Planning
• Decision Making
• Corporate Governance and Responsibility
• Financial Management
• Talent management and leadership development
• Crisis Management
• Balancing short term and long term goals
• Navigating Uncertainty
• Driving Innovation
• Aligning Stakeholder interests
• Sustainability and social responsibility
• Rapid Technological advancements
• Crisis Preparedness
• Globalization
• Succession Planning
 Unit II
Corporate Policy
and Planning
 Contents of Unit II
• Importance of Corporate policy and Planning in India, Around the world

• Characteristics

• Objectives

• Policy formulation and Development

• Types of Business Policies

• Implementation of Policies

• Society and Business

• Social Responsibility of Business

• Corporate Governance and Ethical Responsibility

 Corporate Policy
• Corporate policy has been defined as “Management’s expressed or implied intent to govern
action in the pursuit of the company’s objectives.”
• Corporate policy clarifies the intention of management in dealing with the various problems
faced
• It gives the managers a transparent guideline to take their decisions by being on the safe side
• Corporate policy helps the manager in identification of the solutions to the problem
• It provides the framework in which he has to take the decisions

Policy and Strategy are Process of Implementing Decisions Regarding the

Synonymous Strategy future of the organization
Policy and Strategy are Synonymous

• Corporate policy has been defined by William Glueck as

“Management policy is long range planning.
• For all Practical Purposes, Management Policy, Long Range planning,
Strategic management mean the same thing
• However, this view is quite controversial as strategy and corporate
policy do not mean the same thing
• Strategy includes awareness of the mission, purpose and objectives.
It has been defined as, “the determination of basic long term goals
and objectives of an enterprise, and the allocation of resources
necessary to carry out these goals”
• policies are statements or a commonly accepted understandings of
decision making and are thought oriented guidelines
 Process of Implementing Strategy

I. In the words of Frank I. Paine and William Naumes, “Policies guide and
channel the implementation of strategy and prescribe how processes
within the organization will function and be administered
II. he term policy refers to organization procedures, practices and
structures, concerned with implementing and executing strategy.”
III. Robert Mudric has defined corporate policy as “A policy establishes
guidelines and limits for discretionary action by individuals responsible
for implementing the overall plan.”
IV. The view represents corporate policy to be
 Restrictive
 Laying stress only on the tactical side and ignoring the strategic
dimension.
 Decisions Regarding the future of the Organization

 In this view, Robert J. Mockler defines corporate policy as, “Strategic guidelines for
action. They spell out what can and what cannot be done in all areas of a company’s
operation.”
 According to the policy manual of General Electric Company, “Policy is definition of
common purpose for organization components of the company for benefit of those
responsible for implementation, exercise discretion and good judgment in appraising
and deciding among alternative courses of action.”
 The views of different management scholars differ because of following reasons:
 There is no clear differentiation of policy from other elements of planning.
 There are different policies made at different levels of management for directing
executives.

 Corporate policy encompasses and relates to the entire process of planning.

 Features of Corporate Policy

1. General Statement of Principles - Policies are general statement of principles followed by

corporate for the attainment of organizational objectives. These principles provide a guide to
action for the executives at different levels.
2. Long Term Perspective - Corporate policies have a long life and are formulated with a long term
perspective. They provide stability to the organization.
3. Achievement of Objectives - Corporate policy is aimed at the fulfillment of organizational
objectives. They provide a framework for action and thus help the executives to work towards
the set goals.
4. Qualitative, Conditional & General Statements - Corporate policy statements are qualitative in
nature. They are conditional and defined in general manner. These statements use words as to
maintain, to follow, to provide etc. They can be specific at times but most of the times, a
corporate policy tends to be general.
 Features of Corporate Policy

5. Guide for Repetitive Operations- Corporate policies are formulated to act as a guide for
repetitive day to day operations. They are best as a guide for the activities that occur frequently or
repeatedly.
6. Hierarchy - Corporate policies have an hierarchy i.e. for each set of objectives at each level of
management there is a set of policies. The top management determines the basic overall policy,
then the divisional and / or departmental policies are determined by the middle level management
and lower level policies are more specific and have a shorter time horizon than policies at higher
levels.
7. Decision Making Process- Corporate policy is a decision making process. In formulating corporate
policy one has to make choices and the choice is influenced by the interests and attitudes of
managers engaged in making the policies.
 Features of Corporate Policy

8. Mutual Application- Corporate policies are meant for mutual application by subordinates. They
are made for some specific situation and have to be applied by the members of the organization

9. Unified Structure: Corporate policies tend to provide predetermined issues and thus avoid
repeated analysis. They provide a unified structure to other types of plans and help mangers in
delegating authority and having control over the activities.
10. Positive Declaration: Corporate policy is a positive declaration and a command to its followers.
It acts as a motivator for the people following it and thus they work towards the attainment of the
objectives efficiently and effectively. The corporate policy lays down the values which dominate
organization’s actions
 Determinants of Corporate Policy
The Corporate policy of an organization is influenced by various inter related and
interacting factors:
- INTERNAL DETERMINANTS
- EXTERNAL DETERMINANTS

Corporate Mission Resources Industry Structure Social Environment

INTERNAL EXTERNAL

Corporate Objective Management Values Political Environment Economic Environment

Technology
 Importance of Corporate Policy
The importance of Corporate policy may be well seen in following areas:
 Policies are needed to carry out the business activities in smooth manner
 They provide a clear cut course of attainment business objectives
 If a paper explicit policy has been formulated, many of the details could be conveniently handled by the subordinates
and management would not Unnecessarily waste its time and energy in doing them
 Policies provide a guide and frame work for decision making.
 Policies encourage delegation of power of decision making.
 Good policies provide a direction in which all management activities are focused.
 Policies provide stability to the action of the members of the firm.
 Policies deter the subordinates to rethink on the day to day issues and thus avoid repetitive analysis of issues.
 Policies facilitate evaluation of performance by acting as a standard.
 They help in solving the problems optimum utilization of scarce resources.
 The sound policies help in building good public image of the business.
 Policies provide the firm with clear objectives with which the managers can decide about the future course of
action.
 Corporate Policy and planning in India

Long-term orientation
Goal-driven decision making
Strategic resource allocation
Environmental scanning
Performance monitoring
Corporate governance integration
Focus on sustainability and ESG initiatives
Digital transformation strategies
 Policy Framework in India
Indian companies formulate policies based on various legal and regulatory frameworks:

Companies Act, 2013

Securities and Exchange Board of India (SEBI) Regulations

Competition Act, 2002

Foreign Exchange Management Act (FEMA), 1999

Goods and Services Tax (GST)

Labour Codes

Environmental Protection Act

Corporate Social Responsibility (CSR) provisions

 Corporate Planning Process in India
Environmental Scanning

SWOT Analysis

Mission and Vision Development

Goal Setting

Strategy Formulation & Resource

Allocation

Implementation

Performance Evaluation& Feedback

 Characteristics of Corporate Policy
1. General Statement of Principles: Policies are general statement of principles followed by corporate
for the attainment of organizational objectives. These principles provide a guide to action for the
executives at different levels
2. Long Term Perspective: Corporate policies have a long life and are formulated with a long term
perspective. They provide stability to the organization.
3. Achievement of Objectives: Corporate policy is aimed at the fulfillment of organizational objectives.
They provide a framework for action and thus help the executives to work towards the set goals.
4. Qualitative, Conditional & General Statements: Corporate policy statements are qualitative in nature.
They are conditional and defined in general manner. These statements use words as to maintain, to
follow, to provide etc. They can be specific at times but most of the times, a corporate policy tends to
be general.
5. Guide for Repetitive Operations: Corporate policies are formulated to act as a guide for repetitive day
to day operations. They are best as a guide for the activities that occur frequently or repeatedly.
 Characteristics of Corporate Policy
6. Hierarchy: Corporate policies have an hierarchy i.e. for each set of objectives at each level
of management there is a set of policies. The top management determines the basic overall policy,
then the divisional and / or departmental policies are determined by the middle level management
and lower level policies are more specific and have a shorter time horizon than policies at higher
levels.
7. Decision Making Process: Corporate policy is a decision making process. In formulating corporate
policy one has to make choices and the choice is influenced by the interests and attitudes of
managers engaged in making the policies.
8. Mutual Application: Corporate policies are meant for mutual application by subordinates. They are
made for some specific situation and have to be applied by the members of the organization.
 Characteristics of Corporate Policy

9. Unified Structure: Corporate policies tend to provide predetermined

issues and thus avoid repeated analysis. They provide a unified
structure to other types of plans and help mangers in delegating
authority and having control over the activities.
10. Positive Declaration: Corporate policy is a positive declaration and
a command to its followers. It acts as a motivator for the people
following it and thus they work towards the attainment of the
objectives efficiently and effectively. The corporate policy lays down
the values which dominate organization’s actions.
Policy Formulation and Development

Policy formulation and development are critical for organizations

to ensure consistent, efficient, and strategically aligned
operations. Policies convert corporate strategies into actionable
rules that guide employee behavior and managerial decisions.

Policy formulation is the process of identifying needs, drafting,

approving, and communicating policies.

Policy development involves continuous refinement and updating

of policies over time as organizational needs evolve.
Policies support the execution of strategies and provide clear
guidance on permissible actions.
 Benefits of Policy Formulation
A well-structured and systematic policy process contributes heavily to effective strategy execution and
the seamless growth of the company.

Prevents confusion and interpersonal

Ensures uniform decision
conflicts through clear rules
making across departments

Supports overarching corporate

strategies by aligning policies with
business goals

Strengthens control mechanisms

Improves Efficiency in operations within the organizational hierarchy
 Steps in Policy Formulation
• Identification of Need - Recognize areas that require policies, often triggered by growth,
challenges, or operational problems (e.g., high employee turnover demanding HR retention
policies).
• Analysis of Environment - Assess internal resources, culture, beliefs, values and external factors
such as laws, government regulations, competition, market trends, and economic conditions.
• Setting Policy Objectives - Define clear, measurable goals that the policy should achieve,
directly supporting organizational objectives (e.g., reduce employee attrition by 20% within a
year).
• Development of Policy Alternatives - Generate different policy options, weighing their pros and
cons (e.g., offering higher salaries, flexible working hours, or performance bonuses).
• Evaluation and Selection - Choose the best policy alternative considering feasibility, cost,
impact, and risks (e.g., selecting flexible work incentives as the optimal solution).
 Steps in Policy Formulation
• Approval - Obtain formal consent from senior management or relevant authorities to adopt the

selected policy.

• Communication - Ensure the policy is clearly communicated throughout the organization to all

relevant stakeholders.

• Implementation - Put the policy into action effectively within the organizational processes.

• Review and Feedback - Monitor the policy’s effectiveness and revise as necessary to maintain

relevance and impact.

 Business Policy
Business policy provides a framework for decision making within
an organization. It helps align the objectives of different
departments and ensures that actions taken at all levels
contribute to the overall mission and goals of the company.
Policies define the rules and guidelines for behaviour, operational
practices, and resources allocation. Effective business policies
are essential for maintaining consistency, ensuring ethical
behaviour, and achieving corporate objectives.

Definition: Business Policy defines the scope or spheres within

which decisions can be taken by the subordinates in an
organization. It permits the lower level management to deal with
the problems and issues without consulting top level management
every time for decisions.
 Features of Business Policy
An effective business policy must have following features
1. Specific- Policy should be specific/definite. If it is uncertain, then the implementation will
become difficult.
2. Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There
should be no misunderstandings in following the policy.
3. Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the
subordinates.
4. Appropriate- Policy should be appropriate to the present organizational goal.
5. Simple- A policy should be simple and easily understood by all in the organization.
6. Inclusive/Comprehensive- In order to have a wide scope, a policy must be comprehensive.
7. Flexible- Policy should be flexible in operation/application. This does not imply that a policy
should be altered always, but it should be wide in scope so as to ensure that the line managers
use them in repetitive/routine scenarios.
8. Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in minds of
those who look into it for guidance.