introduction to strategic management

INTRODUCTION TO STRATEGIC MANAGEMENT

Develop awareness about the historical development of strategic management in India and around the world

Grasp the concept of strategy and its limitations Learn how the process of strategic decision-

making works Develop awareness about the various schools of

thought on strategy formation Gain command of how the strategic management

process operates

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Learning Objectives

The genesis of strategic management and business policy

Evolution based on managerial practices Historical perspective of evolution of strategic

management Pointers to the future

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Evolution of Strategic Management and Business Policy

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Vision andMission

Goals andObjectives

Strategy:Arenas

VehiclesDifferentiators

StagingEconomic logic

Implementation Levers and Strategic Leadership

Internal and External Strategic Analysis

Hambrick and Fredrickson Model of Strategic Management

D. C. Hambrick & J. W. Fredrickson: “Are you sure you have a strategy?” (2001). Academy of Management Executive Vol. 15, No. 4, pp. 48-59

Role of IIMs and ASCI Role of AICTE Role of AIMS Role of AIMA India-focused international studies Strategic Management Forum of India Publications

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The Indian Scenario

The term strategic is often misunderstood, misinterpreted and misused.

The literature and texts in strategic management assign a definite meaning to the term ‘strategic’.

Marketing strategy, advertising strategy or purchasing strategy and strategic procurement or strategic recruitment are commonly used terms.

Strategic means when things are done keeping in view the objectives and strategies of the organisation and is seen as something having a long-term and vital significance to the future of the organisation.

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A word of caution for the term “Strategy”

A strategy could be: a plan or course of action or a set of decision rules making a pattern

or creating a common thread; the pattern or common thread related to the organisation's activities

which are derived from the policies, objectives and goals; related to pursuing those activities which move an organisation from

its current position to a desired future state; concerned with the resources necessary for implementing a plan or

following a course of action; and connected to the strategic positioning of a firm, making trade-offs

between its different activities, and creating a fit among these activities.

the planned or actual coordination of the firm's major goals and actions, in time and space that continuously co-align the firm with its environment.

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The Concept of Strategy

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Levels at which Strategy Operates

Corporate Office

SBUA

SBUB

Finance Marketing Operations HRM Information

LEVELS OF MANAGEMENT LEVELS OF STRATEGY

CORPORATE CORPORATE-LEVEL

SBU BUSINESS-LEVEL

FUNCTIONAL

SBUC

Objectives to be achieved are determined; Alternative ways of achieving the objectives are

identified; Each alternative is evaluated in terms of its

objective-achieving ability; and The best alternative is chosen.

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Strategic Decision-Making

Problem related to objective-setting. The identification of alternatives. The objective-achieving ability of each

alternative. Choosing the best alternative is a

formidable task.

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Problems in Strategic Decision Making

Criteria for decision-making Rationality in decision-making Creativity in decision-making Variability in decision-making Person-related factors in decision-

making Individual versus group decision-

making.

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Issues in Strategic Decision-Making

The prescriptive schools The descriptive schools The integrative school

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Schools of Thought on Strategy Formation

Design school where strategy formation is a process of conception

Planning school where strategy formation is a formal process

Positioning school where strategy formation is an analytical process

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The Perspective School

Entrepreneurial school where strategy formation is a visionary process

Cognitive school where strategy formation is a mental process

Learning school where the strategy formation is an emergent process

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The Descriptive School

Power school where the strategy formation is a negotiation process

Cultural school where the strategy formation is a collective process

Environmental school process where the strategy formation is a reactive process

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The Descriptive School

Configuration school where the strategy formation is a process of transformation.

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The Integrative School

Strategic management is defined as the dynamic process of formulation, implementation, evaluation and control of strategies to realise the organization’s strategic intent.

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Strategic Management Defined

Dynamic process. Continual, evolving, iterative process. Evolving mosaic of relevant activities.

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Strategic Management is characterized as…

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Four phases in Strategic Management

Formulation of strategies

Implementation of strategies

Strategic evaluation

Strategic control

Establishment of strategic intent

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Comprehensive Model of Strategic Management

Strategy Formulation

Environmental Organisational Appraisal Appraisal

SWOT AnalysisCorporate-level StrategiesBusiness-level Strategies

Strategic analysis and choiceStrategic plan

Strategic Intent

VisionMission

Business definitionBusiness model

Objectives

Strategy Implementation

ProjectProcedural

Resource allocationStructural

BehaviouralFunctional & Operational

Implementation

Strategic control

Strategic Evaluation

Strategic evaluation and control