This document provides an overview of strategic management. It discusses key concepts like business policy, the nature and importance of business policy, limitations of business policy, and the process of formulating business policy. It also describes strategic management in terms of its beginning with a mission statement, preparation of a business portfolio, and periodic re-evaluation. The basic model of strategic management involves environmental scanning, strategy formulation and implementation, evaluation and control, and feedback. Vision, mission, objectives, strategic decision making, global strategic management, the impacts and barriers of globalization are also summarized.
2. BUSINESS POLICY
Statement dealing with acquisition of resources
with which organizational goals can be achieved
Study of roles and responsibilities of top level
management
Man made or pre-determined course of action
Long range planning
3. NATURE OF BUSINESS POLICY
Futuristic decisions
Defines goals
Overall guide
Focuses on allocation of scarce resources
Long life
Taken at top level
4. IMPORTANCE OF BUSINESS POLICY
Coordination
Quick decisions
Effective control
Minimize costs
Build a learning culture
5. LIMITATIONS OF BUSINESS POLICY
Inadequate coverage
Limited area
Static
Consistency in policies
Provides set rules
6. PROCESS OF FORMULATING
BUSINESS POLICY
1. Definition of policy area
2. Identify policy alternatives
3. Evaluation of alternatives
4. Selection of alternative business policy
5. Implementation of business policy
6. monitor
7. STRATEGIC MANAGEMENT
Begins with formulation of mission statement
Then portfolio of business model is prepared
Ends at conducting functional activities
Not a one-time process but re-evaluated and
implemented periodically
10. BASIC MODEL OF STRATEGIC
MANAGEMENT(CONTD.)
1. Environmental Scanning (study of internal and
external environment of the organization)
2. Strategy formulation (developing corporate
vision, identifying corporate mission, setting
realistic objectives, formulating strategies and
establishing policy guidelines)
3. Strategy implementation (successful execution of
selected strategy)
11. BASIC MODEL OF STRATEGIC
MANAGEMENT(CONTD.)
4. Evaluation and control (analyzing market
response)
5. Feedback (suitable and prompt feedback)
12. IMPORTANCE OF STRATEGIC
MANAGEMENT
Fulfilling responsibilities of Board members
Measuring progress
Assessing objectives
Identifies SWOT
Decision-making framework
13. LIMITATIONS OF STRATEGIC
MANAGEMENT
Time consuming
Challenging process
Absence of short term benefits
Limited to set of rules
Poor adaptability
14. VISION
Declaration of company’s goals for mid-term or
long-term future
Provide a concentrated view of organization
Provides employees with common goal and
stimulating them for conducting their routine
operations efficiently
15. FEATURES OF VISION
Mental exercise
Select target market
Realistic
Attractive
Dynamic and flexible
Reflects future plan
16. PROCESS OF DEVELOPING
STRATEGIC VISION
1. Understanding the organization
2. Conduct a vision audit
3. Target the vision
4. Set vision context
5. Develop future scenarios
6. Generate alternative visions
7. Choose the final vision
17. SIGNIFICANCE OF VISION
Establishing standard of excellence
Bridging gap between present and future
Outlining future
Helping employees in goal setting
Helps in strategy framing
Creating effectiveness
18. LIMITATIONS OF VISION
Incomplete
Not forward looking
Too broad
Not distinctive
Too reliant on superlatives
19. MISSION
Describes reason for existence of the organization
Specifies organizational culture and values
Specifies what qualities the organization will
uphold and impart to society or community
20. CHARACTERISTICS OF MISSION
Target consumers
Target region
Values
Technology
Financial objectives
Image
21. COMPONENTS OF MISSION
Customers
Products or services
Markets
Technology
Concern for survival, growth and profitability
Philosophy
Self-concept
Concern for public image
Concern for employees
23. BENEFITS OF MISSION
Inspiring employees
Improving performance
Defines basic goal
Guiding corporate decision making
Business plans
Company direction
24. OBJECTIVES
Organization’s articulated aims or responses to
address major change or improvement,
competitiveness or social issues, and business
advantages
Represent a managerial commitment to achieve
specified results in a specified period or time
26. SETTING OF OBJECTIVES
1. Classifying objectives
2. Reasonableness and consistency
3. Areas of objectives
4. Realistic and practical
5. Balancing of short-range and long-range
objectives
6. Change of adjustments
28. STRATEGIC DECISION MAKING
A decision is the act of choosing among two or
more options
Process of selecting alternatives among the
existing situation to make decisions that have
long-term implication for organization performance
29. NATURE OF STRATEGIC
DECISION MAKING
Long-term direction
Scope of organization’s activities
Operational decisions
Complex
High degree of uncertainty
Demand an integrated approach
30. MODES OF STRATEGIC DECISION
MAKING
Entrepreneurial mode
Adaptive mode
Planning mode
Logical incrementalism mode
31. STRATEGIC DECISION MAKING
PROCESS
1. Planning process
2. Programming system
3. Performing modalities
4. Profitability factor
5. Developmental growth
32. ISSUES IN STRATEGIC DECISION
MAKING
Contextual issues
Personality/style
Effect of biases
Role of values
Role of consensus
Nature of strategic decisions
33. GLOBAL STRATEGIC
MANAGEMENT
Involves analysis of internal capabilities and
external environment of a firm
Field of study effectively addressed by
interdisciplinary issues of marketing, organization
theory, business strategy and international
management and concentrates on maximizing firm
performance
34. FEATURES OF GLOBAL
STRATEGIC MANAGEMENT
Planning process
Ongoing process
Based on global environment
Part of overall corporate policy
Integrated management
35. POSITIVE IMPACT OF
GLOBALIZATION
Boost in economy
Increased rate of employment
Availability of advanced technology
Balanced development of world economies
Adaptation of foreign taste and trend
37. BARRIERS IN GLOBAL
STRATEGIC MANAGEMENT
Orientation for globalization
Emerging e-commerce and internet culture
Cut-throat competition
Diversification
Motive for CSR and ethics