M.T.
- Summary
Classical – Scientific [Link] 1900-1920 One best way of doing
Management things - mechanistic
Classical – Henry Fayol 1841-1925 Universal Principles of
Administrative theory Management – managing
people
Classical - Bureaucracy Max Weber 1864-1920 Bureaucracy – it’s all
about rules & regulations
Modern Management Peter . F. Drucker 1940 -1980 MBO, Outsourcing,
theory Knowledge management,
Decentralisation
Systems Bertalanffy 1960 Interrelated,
interdependent, interacting
– tasks have to be
modified based on
changes in the other
systems/sub-systems as
well.
Contingency Joan Woodward 1970 No one best way -
Aston Group Course of action
contingent on internal &
external situation.
Chaos Edward Lorenz & 1980 One jolt – entire system
Stephen Hawking into chaos – continual
challenge for equilibrium
Evolution of business policy as a discipline
– Paradigms (Charles Hofer)
❖ Prior to 1960: Focus of Manager’s Job was today’s decisions
for today’s world in today’s business. (First generation
planning)
• 1930s – Ad hoc policy
• 1930 – 1940s – Planned policy formulation (integration of
functional areas)
❖ After 1960s: Shift to Knowledge era, analysis of the future &
it’s impact on business. Analysis of business and the
preparation of alternative scenarios for the future. (Second
generation planning)
• 1960s - Strategy (environment)
• 1980s – Strategic Management (comprehensive alignment of
policy & strategy)
Capstone discipline
The purpose of Business Policy is three – fold :
✔ To integrate the knowledge gained in various
functional areas of management.
✔ To adopt a generalist approach to problem
solving.
✔ To understand the complex inter-linkages
operating within an organization through the
use of a systems approach to decision-making
and relating these to the changes taking place
in the external environment.
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Strategy Relates A Business To Itself and Its Competitive Environment
Competitive Environment
Industry
Environment
Technology
Finance
Mktg. Strategy Oper.
Government National/
Regulation Int’l Economies
Acctg. H.R.
Related
Other Industries
Competitors
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• Where are we now?
• How did we get here?
• Where would we like to be?
• How do we get there?
• Are we on course to achieve our targets?
• Definition of Strategy :
“ The determination of the basic long-term goals
and objectives in an enterprise and the adoption
of courses of action and the allocation of
resources necessary for carrying out these goals.”
--- Alfred D. Chandler
• Levels of Strategy:
Corporate Level Strategy (Strategic)
Business Level Strategy (Tactical)
Functional Level Strategy (Operational)
The Levels of Strategy
Corporate - General Electric
Business - Home Appliances
Functional - e.g., Production
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Strategic Planning (decision making)
Process:
•Objective setting
•Identification of all possible alternatives (Mission)
•Objective-achievement ability of each alternative (Yardsticks, SWOT))
•Decision making (Res. Availability)
Issues which impact strategic planning:
Criteria for d-making (maximizing, satisficing)
Rationality (data availability)
Creativity
Variability
Personal factors
Indiv. Vs. group
Strategic Management
“ Strategic Management is a stream of decisions and actions which lead to the
development of an effective strategy to help to achieve corporate
objectives. The Strategic Management Process is the way in which
strategies determine objectives and make strategic decisions.”
--- Lawrence and William
Dynamic process of formulation, implementation, evaluation & control of
strategies to realise the organisation’s strategic intent.
Continual, evolving, iterative
Strategic Management Process
It is the Process that involves series of
strategic decisions to achieve Organizational
goals.
The Process of Strategic Management is
depicted through a model which consists of
different phases. Each phase has a number of
elements.
Phases
•Establishment of strategic intent
•Formulation of strategies
•Implementation
•Strategic Evaluation
Strategic Management model
Elements of Strategic Management
1. Establishing Strategic Intent :
a. Creating and Communicating a Vision
( dream / image / visualization)
b. Designing a Mission Statement ( Task / Job
/ Work / Duty )
c. Defining the business
d. Adopting the business model
e. Setting Objectives
2. Strategy Formulation:
a. Performing Environmental Appraisal ( SWOT)
b. Doing Organizational Appraisal (Internal)
c. Formulating Corporate –Level Strategies
d. Formulating Business- Level Strategies
f. Undertaking Strategic Analysis
g. Exercising Strategic Choice
h. Preparing Strategic Plan
3. Implementation of Strategies:
a. Activating Strategies
b. Designing the Structure, Systems and
Processes
c. Managing Functional Implementation etc.
i.e. Allocation of resources
4. Performing Strategic Evaluation and
Control:
a. Performing Strategic Evaluation
b. Exercising Strategic Control
c. Reformulating Strategies
Stage Type of plan Management level
Strategic intent •Vision Corporate (Head office)
•Mission
•Goals
•Objectives
Formulation •Strategies •Corporate
•Policies •Business (SBU)
Implementation •Procedures •Functional/Operational
•Programs (Department/Division)
•Budgets
Strategic Intent
Identify the strategic intent of the following
companies over the last twenty years. How
has the strategic intent changed & why?
RIL
ITC
Coca Cola