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BUSINESS POLICY AND STRATEGIC MANAGEMENT
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Strategy - Purpose
Business: Survive and Grow Non Business Organization: Effectively
discharge the purpose for which it is formed
Business Policy
Study of the functions and responsibilities of senior Management, the crucial problem that affect success in the total enterprise and the decisions that determine the direction of the organization and shape its future.
Christensen
Business Policy
Study of functions and responsibilities of the senior Management related to the organizational problems that affect the success of the organization as a whole
Future course of action Choice of purpose and defining what
needs to be done in order to mould the character and identity of the organization
Business Policy
Mobilization of resources for the attainment of goals
Strategy
The term ‘Strategy’ is derived from the Greek word ‘Strategos’ , which means generalship – the actual direction of military force.
Strategy means the art of general.
Strategy
Defined as, “Where the organization wants to go to fulfill its purpose and achieve its Mission, it provides the framework for guiding choices which determine the organization’s nature and direction and these choices related to the organization’s products or services, markets, key capabilities, growth, return on capital employed and allocation of resources.”
Strategy
Integrated set of actions aimed at securing a sustainable competitive advantage.
Hierarchy of Strategy:
Corporate Business Functional
Level Level Level
Strategy
Sustainable Competitive Advantage
Cost Leadership Differentiation Focus
Strategic Management
Dynamic process of formulation, implementation, evaluation and control of strategies to realize the organization’s strategic intent
Strategic Management
StrategicIntent
FormulationOf
Strategies
ImplementationOf
Strategies
StrategicEvaluation
Strategic Intent
Vision Mission Goals Objectives Plans
VISION
Broad category of long term intentions that the organization wishes to pursue
It is a dream, the aspirations the organization holds for its future
Ideal Vision statement Broad, all inclusive Aspirations for future A dream shared across the organization
VISION- Polyhydron Pvt Ltd.
“ We are an ethically Managed Organization. We will not exploit our customers, employees, suppliers, Government, society and nature”
VISION: AIRTEL
“ To make mobile communication a way of life and be the customers’ first choice
VISION - INDSEARCH
“Develop world-class Management professionals to meet the diverse and challenging demands of business, industry and society
VISION - NTPC
“ To be one of the world’s largest and best power utilities, powering India’s growth
NASA “ To improve life here, To extend life to
there, To find life beyond.”
MISSION
Mission statement makes the Vision statement more tangible and comprehensible
Mission statement clearly specifies: Why organization exists? What differentiates the organization? Basic beliefs, values and philosophy
MISSION- Polyhydron Pvt. Ltd.
We will create an island of Excellence through focus on Customer, Employee Empowerment and continuous improvement
MISSION - AIRTEL
“ We will meet the mobile communication needs of our customers through A] Error free service delivery B] Innovative products and services C] Cost efficiency and D] Unified messaging solutions
MISSION- IndSearch
Provide international knowledge environment that will enthuse and encourage students and faculty to develop sustainable competencies in emerging global business scenario.
CORE VALUES
Core Values of the organization represent the commonly held beliefs, mindsets and assumptions that shape how work is done in an organization.
Core Values are derived out of the MISSION of the organization.
GOALS
Goals provide the basis for actions towards the achievements of the organization’s MISSION in the form of specific milestones.
Goals are both, financial and non-financial and specify the route that the organization takes to achieve its MISSION & VISION
OBJECTIVES
Objectives are operational definitions of the organization’s Goals.
PLANS
Specific actions that will be taken by the organization in order to achieve the objectives.
Plans specify the roles to be performed by the members of the organization and resource allocation across sub units of the organization and departments along with the priorities and schedule of activities.
Formulation of Strategies- Reliance
Acquisitions in polyester segment for increase in capacity by 25%, which is more than double of the nearest competitor
Petrochemicals second growth platform Petroleum Refining Capacity from 0.66 to 1.24
million barrels per day Eight New Discoveries during the year, 40% of
India’s total indigenous production
Reliance
Identification Of Two Growth Avenues Fostering Rural Prosperity Through
Organized Retailing Alternative Energy
Strategies- Infosys
Continuous Improvement in Global Delivery Model [GDM]
Substantial Investments In Infrastructure And Processes
Developing Sophisticated Project Management Technology For Ensuring Timely, Consistent and Accurate Delivery Of Superior Quality Solutions For High Level Customer Satisfaction
Infosys
Increase Business From Existing And New Customers
Global Presence Investment In Infrastructure & Employees Enhance Solutions Set Deep Industry Knowledge Enhance Brand Visibility Pursue Alliance and Strategic Alliance Maintain Financial Strength
Formulation of Strategies
Value Chain Analysis
Firm Infrastructure Value
Human Resource Management
Technology Development
ProcurementInbound Operations Outbound M & S Service
Logistics Logistics
Formulation of Strategy
Environmental Internal Analysis
Analysis Opportunities & Threats Strengths &
Weaknesses Fix Internal Competencies With External Opportunities
Firm’s Strategies
Environmental Analysis
It is the aggregate of all conditions, events and influences that surround an organization and affects it.
Six Mega Trends likely to shape India’ future
1. Trend of acquiring the scale
2. Spread of connectivity and awareness
Environmental Analysis
3. Growing Problems of Growth
4. Increasing the openness to the world
5. Growth of Middle Class
6. Continuing Dominance of Youth
Environmental Analysis
Characteristics of Environment
1. Complexity
2. Dynamic
3. Multi-faceted
4. Far-reaching impact
Environmental Analysis
External Environment Internal Environment
Environmental Analysis
Economic Environment International Environment Political Environment Regulatory Environment Socio-cultural Environment Supplier Environment Technological Environment
Internal Environmental Analysis
Organizational Resources + Organizational Behavior Strength and Weaknesses Synergetic Effects
Competencies Organizational Capabilities Strategic Advantage
Internal Environmental Analysis
Organizational Resources:
I] Tangible and intangible
II] Physical, human and organizational resources
III] Characteristics: Valuable
Rare
Costly to imitate
Non substitutable
Internal Environmental Analysis
Organizational Behavior: Manifestation of the various forces and influences operating in the internal environment of an organization that creates the ability for, or place constraints on the usage of resources
Internal Environmental Analysis
Strengths and Weaknesses Synergistic Effects Competencies: Special qualities
possessed by an organization that makes them withstand the pressure of competition in the market place.
Internal Environmental Analysis
Organizational Capability: It is the inherent capacity or potential of an organization to use its strengths and overcome its weaknesses in order to exploit the opportunities and fact the threats in the external environment.
Organizational Capability
Financial capability Marketing capability Personnel capability Operations capability General Management capability
Implementation of Strategies
Nature of Strategy Implementation: Action oriented Comprehensive nature Integrated process
Implementation of strategies
Barriers in implementation Managing Change Ambiguous strategies Lack of guidelines on implementation Unclear responsibility and accountability Working against the organization’s power
structure
Implementation of strategies
Forward linkages Backward linkages Mintzberg’s Model
Implementation of strategies
Strategy Plans Programs Projects Budgets Policies, procedures, rules and regulations
Case Study: Madhya Pradesh Society for Rural Livelihood Promotion
Implementing the Madhya Pradesh Rural Livelihood Project
2004-07: Target of 822 villages 2007-12: Target of 3000 villages Strategy: Strengthening resource base
: Fostering micro – enterprise that provide employment and income opportunities
Case Study
Designing organization structure Funding of the project Implementation Transparency Results
Implementation of strategies
Structural implementation Behavioral implementation Functional and Operational
implementation Procedural implementation
Evaluation of Strategies – Value Creation
Value: What does it mean? Shareholder Value Stakeholder Value Value Parameters Financial Non-Financial
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