Professional Documents
Culture Documents
STRATEGIC MANAGEMENT
Module 1 Introduction
Evolution and Introduction of strategic management. Concept and Classification of Corporate and Business Strategy with Hierarchy definition; Purpose of Strategy Formulation: Concept of Vision, Mission and Business Definition. Importance of Stakeholders in Business
Ramesh Bagla
Strategy
Strategy is a plan of action, which is of vital, pervasive and continuing importance to an organisation as a whole. A strategy is a unified, comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organisation. - Glueck & Jausch
Strategy
Strategy is the direction and scope of an organisation over the long term which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations.
- Johnson & Scholes
Strategy
The term strategy has its origin in the Greek word Strategos which means the art of war as a noun and to command an army as a verb. The battleship concept of strategy refers to:
Future oriented preparation & readiness A winning mindset motivated to seize every opportunity for expansion/growth Deterrence capability that prevents loss to rivals Developing special expertise in areas where rivals are weak Looking beyond the specific set of objectives, deadlines, activities, functions, markets and organizational units, to develop an overall picture of time and space
Purpose of Strategy
Strategies focus on:
Organisational goals Core competencies Developing synergy Creating value for customers Competitive advantage
Strategic Management
Strategic management is that set of managerial decisions and actions that determines the long run performance of a corporation. It includes environmental scanning(both internal & external),strategy formulation(strategic planning), strategy implementation and evaluation and control.
Strategic Management
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Business Policy
A policy is a broad guideline for decision making that links the formulation of strategy with its implementation Companies use policies to make sure that employees throughout the organisation Take decisions that support the companys mission, objectives and strategies.
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Strategic Planning
Strategic planning is a process where top-level management sets long-term organizational goals and determines where an organization is going over the next year or more -typically 3 to 5 years, although some extend their vision to 10 to 20 years. Middle managers interpret these goals and develop plans for their departments that can be accomplished within one year or less. Supervisors within departments implement operational plans that are short-term and deal with the day-to-day work of their team. Short-term goals are aligned with the long-term goals and can be achieved within a month, quarter or up to one year.
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Mid-70s-mid-80s Positioning
MAIN ISSUES
Selecting sectors/markets. Positioning for leadership Industry analysis Segmentation Experience curve Portfolio analysis
Resources & Cooperative capabilities. strategy. Shareholder Complexity. value. Owning E-commerce. standards. Knowledge Management Alliances & networks Self-organiz ation & virtual organization
MANAGEMENT IMPLICATIONS
Functional / Operational Level Strategy Functional: How do we support the business level strategy? Operational: How do we support the functional level strategy? An example. Business Level Stgy Become the low cost producer Functional Level Stgy (Mfg.): Reduce manufacturing costs by 10% Operational (Plant #1): Increase worker productivity by 15%
Vision
Broad category of long-term intentions that the organisation wishes to pursue It is broad all inclusive and futuristic A dream how the organisation sees itself in future It clearly and crisply illuminates the direction in which the org is headed
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Vision Statements
Vision of NTPC: - To be one of the worlds largest and best power utilities powering Indias growth. Vision of NASA: - To improve life here; To extend life there; To find life beyond. Vision of Apple: - To make a contribution to the world by making tools for the mind that advance humankind.
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Vision
Good vision statements specify the intentions that are: Broad, all inclusive, forward thinking Aspirations for future - ends rather than the means Mental image of the future state A dream that is shared across the entire organisaion
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Vision
An ideal vision statements should be: Inspiring, motivating and challenging A Slogan it could be encapsulated in an actionable slogan Easily communicated and shared among whole organisation and its stake holders
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Vision
Broad category of long term intentions All inclusive and futuristic Aspirations that the organisation holds for future
Vision
A broader strategic intent might drive organisations and people to seek/deploy additional resources to achieve stated intent, which would have been otherwise dismissed as beyond the capabilities of the organisation Strategic intent top management is specific about the ends but leaves room for the employees with respect to the means. Good vision statement is a dream that is shared across the entire organisation
Mission
Mission statement makes the vision statement more tangible and comprehensible A mission statement clearly specifies: Why the organisation exists or Purpose What differentiates the org from others or the Identity The basic beliefs, values and philosophy of the organisation
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Mission
At the top of goal hierarchy The organizations reason for existence and often reveals corporate philosophy and purpose Mission describes organizational values, aspirations and is the basis for development for subsequent goals and plans A formal mission statement is a broadly stated definition of basic business scope and operations that distinguishes the organization from similar others Mission statement often focuses on customers, market and businesses