CHAPTER CONTENTS · STRATEGIC MANAGEMENT CHAPTER - 1 REVISION CLASS • Key Group in an...

INTRODUCTION TO STRATEGIC MANAGEMENTCHAPTER - 1

CHAPTER CONTENTS

INTRODUCTION TO STRATEGIC MANAGEMENTINTRODUCTION TO STRATEGIC MANAGEMENTINTRODUCTION TO STRATEGIC MANAGEMENT

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• BUSINESS POLICY• CONCEPT OF MANAGEMENT• STRATEGY• STRATEGIC MANAGEMENT• STRATEGIC MANAGEMENT IN GOVERNMENT AND NOT FOR PROFIT ORGANIZATION• STRATEGIC LEVELS

STRATEGIC MANAGEMENT REVISION CLASSCHAPTER - 1


Business Policy

* Stream of instruction, guidance & direction for decision & action* Future Oriented.* Formulated by top management.* Emphasize on rational-analytical aspect of SM.* Gives direction* Set of rules & regulations.

Example : Product cannibalization of Intel


• Key Group in an organization in charge of it’s affairs.

• Set of interrelated functions and process carried out by the management to achieve it's objectives

Two Senses

Peter Drucker: "Management" is a Function, a Discipline, a task to be done, Peter Drucker: "Management" is a Function, a Discipline, a task to be done, and Managers practice this discipline carry out the functions and and Managers practice this discipline carry out the functions and discharge these tasks.discharge these tasks.

Peter Drucker: "Management" is a Function, a Discipline, a task to be done, and Managers practice this discipline carry out the functions and discharge these tasks.

Peter Drucker: "Management" is a Function, a Discipline, a task to be done, and Managers practice this discipline carry out the functions and discharge these tasks.

Concept of Management



Strategy

Term derived from Greek word Strategos

was used in military setup.

• A pattern in a stream of decisions and actions

• Unified comprehensive and integrated plan of action designed to assure that objectives are achieved

Strategy is partly proactive &partly reactive

• Based on knowledge resource past trend etc. "Proactive

• In Reaction of environmental change or new learning " Reactive

Env is dynamic



(i) To create a competitive advantage

(ii) To cope with changing environment

(I) Costly

(ii) Time Taking

(iii) Complex Environment

(iv) Difficult to understand/ Estimate strategies response of rivals

Strategic Management

" Consists of analysis, decision & action" Creates Competitive Advantages." Management process of

(i) Define vision mission(ii) Set Objective (iii) Formulation strategy(iv) Implement (v) Control

Objectives of SM Limitations of SM

(i) Give direction.(ii) Makes organization Proactive.(iii) Create future and pathfinder of opportunities.(iv) Longativity of business.(v) Competitive advantage.(vi) Defense Mechanism.(vii) Framework for major decisions.

Importance of SM



MedicalInstitutions

EducationalInstitutions

• Collecting Samples door to door• Day treatment facilities• Back-end Integration• Medical search online by people• Sharing of medical tests online• Electronic monitoring at home etc

• Campus Interview.• Online Degrees.• Introduction of Technology.• Online Examinations etc.

Governmental Agencies& Departments

• Strategist operates with less strategic autonomy • Strategies usually enjoy little freedom in altering mission and redirecting objectives.• Political interference• Generally can't diversify into unrelated business or merge with other• Issued are discussed in media & legislature

Strategic Management In Government

And Not For Profit

Organization

Many Non-Profit Organization outperforms

private firms

A Non-Commercial Organization is established to

meet the needs not met by business enterprises

SM Required in all types of Org whether

commercial or non-commercial

Required to cope with mounting competitive pressure



Strategic Level Description Characteristics of Decisions

Examples of Decision.

1) Corporate Level " Consists of CEO, BOD, Senior Executives." Oversee Development of strategy for whole org." Sets strategic direction.

" Value Oriented" Less Concrete " Conceptual" Rare" Long Term" High Risk" High Cost" High Profit Potential" Maximum organization wide involvement" High Flexibility.

" Dividend Policies" Divestment of acquisitions" Deciding on long term financing" Formulating & Implementing Strategy" Launching new business etc.

2) Business Level " Include Executives at business level." Business Level mgrs" Translates general statement of direction into concrete strategies for individual business." Concerned with strategies specific to a particular business.

" Bridge between corporate & function" Periodic decision or rare " Moderate organization" Less costly" Less Risky" Mid term" Less Profit potential

" Plant Layout" Plant Capacity" Distribution network etc.

3) Functional Level " Consists of functional manager" Develop Functional Strategies." Provide info & Support to Business & Functional Level

" Usually quantifiable" Short Range" Periodical decision" Low flexibility" Risk is low" Day to day action oriented operational Issues

" Production scheduling" Inventory Management" Daily Transportation etc.


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