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Strategic managementis a field that deals with the major intended and emergent initiatives taken by general

managerson behalf of owners, involving utilization of resources, to enhance the performance of firmsin their

external environments.[1 !t entails specifying the organization"s mission, vision and objectives, developing

policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and

then allocating resources to implement the policies and plans, projects and programs. #balanced scorecard is

often used to evaluate the overall performance of thebusinessand its progress towards objectives. $ecent studies

and leading management theorists have advocated that strategy needs to start with stakeholders expectations and

use a modified balanced scorecard which includes all stakeholders.

%trategic management is a level of managerial activity under setting goals and over &actics. %trategic

management provides overall direction to the enterprise and is closely related to the field of 'rganization %tudies.

!n the field of business administration it is useful to talk about (strategic alignment( between the organization and

its environment or (strategic consistency(. #ccording to #rieu )*++-, (there is strategic consistency when the

actions of an organization are consistent with the expectations of management, and these in turn are with the

market and the context.( %trategic management includes not only the management team but can also include the

oard of /irectors and other stakeholders of the organization. !t depends on the organizational structure.

0%trategic management is an ongoing process that evaluates and controls the business and the industries in which

the company is involved assesses its competitors and sets goals and strategies to meet all existing and potential

competitors and then reassesses each strategy annually or 2uarterly [i.e. regularly to determine how it has been

implemented and whether it has succeeded or needs replacement by a new strategy to meet changed

circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or

political environment.3

Strategy formation

%trategic formation is a combination of three main processes which are as follows4

5erforming a situation analysis, self6evaluation and competitor analysis4 both internal and external both

micro6environmental and macro6environmental.

7oncurrent with this assessment, objectives are set. &hese objectives should be parallel to a time6line

some are in the short6term and others on the long6term. &his involves crafting vision statements )long

term view of a possible future-, mission statements )the role that the organization gives itself in society-,

overall corporate objectives )both financial and strategic-, strategic business unit objectives )both

financial and strategic-, and tactical objectives.

&hese objectives should, in the light of the situation analysis, suggest a strategic plan. &he plan provides

the details of how to achieve these objectives.

Strategy evaluation

8easuring the effectiveness of the organizational strategy, it"s extremely important to conduct a %9'&

analysisto figure out the strengths, weaknesses, opportunities and threats )both internal and external- of

the entity in business. &his may re2uire taking certain precautionary measures or even changing the entire

strategy.
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!n corporate strategy, :ohnson, %choles and 9hittington present a model in which strategic options are evaluated

against three key success criteria.

%uitability )would it work;-


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Riskdeals with the probability and conse2uences of failure of a strategy )financial and non6financial-.

Stakeholder reactionsdeals with anticipating the likely reaction of stakeholders. %hareholders could

oppose the issuing of new shares, employees and unions could oppose outsourcing for fear of losing their

jobs, customers could have concerns over a merger with regards to 2uality and support.

&ools that can be used to evaluate acceptability include4

what6if analysis

stakeholdermapping

General approaches

!n general terms, there are two main approaches, which are opposite but complement each other in some ways, to

strategic management4

The Industrial Organizational Approach

o based on economic theory = deals with issues like competitive rivalry, resource allocation,

economies of scale

o assumptions = rationality, self6discipline behaviour, profit maximization

The Sociological Approach

o deals primarily with human interactions

o #ssumptions = bounded rationality, satisfying behaviour, profit sub6optimality. #n example of a

company that currently operates this way is >oogle. &he stakeholder focused approach is an

example of this modern approach to strategy.

%trategic management techni2ues can be viewed as bottom6up, top6down, or collaborative processes. !n the

bottom6up approach, employees submit proposals to their managers who, in turn, funnel the best ideas further up

the organization. &his is often accomplished by a capital budgeting process. 5roposals are assessed using

financial criteria such as return on investment or cost6benefit analysis. 7ost underestimation and benefit

overestimation are major sources of error. &he proposals that are approved form the substance of a new strategy,all of which is done without a grand strategic design or a strategic architect. &he top6down approach is the most

common by far. !n it, the 7?', possibly with the assistance of a strategic planning team, decides on the overall

direction the company should take. %ome organizations are starting to experiment with collaborative strategic

planning techni2ues that recognize the emergent nature of strategic decisions.

%trategic decisions should focus on 'utcome, &ime remaining, and current @alueApriority. &he outcome

comprises both the desired ending goal and the plan designed to reach that goal. 8anaging strategically re2uires

paying attention to the time remaining to reach a particular level or goal and adjusting the pace and options

accordingly. @alueApriority relates to the shifting, relative concept of value6add. %trategic decisions should be

based on the understanding that the value6add of whatever you are managing is a constantly changing reference

point. #n objective that begins with a high level of value6add may change due to influence of internal and

external factors. %trategic management by definition, is managing with a heads6up approach to outcome, time and

relative value, and actively making course corrections as needed.
http://en.wikipedia.org/wiki/What-if_analysishttp://en.wikipedia.org/wiki/Stakeholder_(corporate)http://en.wikipedia.org/wiki/Stakeholder_(corporate)http://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Resource_allocationhttp://en.wikipedia.org/wiki/Resource_allocationhttp://en.wikipedia.org/wiki/Economies_of_scalehttp://en.wikipedia.org/wiki/Googlehttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Cost-benefit_analysishttp://en.wikipedia.org/wiki/Cost-benefit_analysishttp://en.wikipedia.org/wiki/Cost_underestimationhttp://en.wikipedia.org/wiki/What-if_analysishttp://en.wikipedia.org/wiki/Stakeholder_(corporate)http://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Resource_allocationhttp://en.wikipedia.org/wiki/Economies_of_scalehttp://en.wikipedia.org/wiki/Googlehttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Cost-benefit_analysishttp://en.wikipedia.org/wiki/Cost_underestimation


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The strategy hierarchy

!n most )large- corporations there are several levels of management. %trategic management is the highest of these

levels in the sense that it is the broadest 6 applying to all parts of the firm 6 while also incorporating the longest

time horizon. !t gives direction to corporate values, corporate culture, corporate goals, and corporate missions.

Bnder this broad corporate strategy there are typically business6level competitive strategies and functional unit

strategies.

orporate strategyrefers to the overarching strategy of the diversified firm. %uch a corporate strategy answers

the 2uestions of (which businesses should we be in;( and (how does being in these businesses create synergy

andAor add to the competitive advantage of the corporation as a whole;( !usiness strategy refers to the

aggregated strategies of single business firm or a strategic business unit in a diversified corporation. #ccording to

8ichael 5orter,a firm must formulate a business strategy that incorporates either cost leadership, differentiation

orfocusin order to achieve a sustainable competitive advantage and long6term success in its chosen areas or

industries. #lternatively, according to 9. 7han Cim and $enDe 8auborgne, an organization can achieve high

growth and profits by creating a lue 'cean %trategy that breaks the previous value6cost trade off by

simultaneously pursuing both differentiation and low cost.

Functional strategies include marketing strategies, new product development strategies, human resource

strategies, financial strategies, legal strategies, supply6chain strategies, and information technology management

strategies. &he emphasis is on short and medium term plans and is limited to the domain of each departmentEs

functional responsibility. ?ach functional department attempts to do its part in meeting overall corporate

objectives, and hence to some extent their strategies are derived from broader corporate strategies.

8any companies feel that a functional organizational structure is not an efficient way to organize activities so

they have reengineeredaccording to processes or %Bs. # strategic business unitis a semi6autonomous unit that

is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting. #n %B

is treated as an internal profit centre by corporate head2uarters. # technology strategy, for example, although it is

focused on technology as a means of achieving an organization"s overall objective)s-, may include dimensions

that are beyond the scope of a single business unit, engineering organization or !& department.

#n additional level of strategy called operational strategywas encouraged by 5eter /ruckerin his theory of

management by objectives)8'-. !t is very narrow in focus and deals with day6to6day operational activities

such as scheduling criteria. !t must operate within a budget but is not at liberty to adjust or create that budget.

'perational level strategies are informed by business level strategies which, in turn, are informed by corporate

level strategies.

%ince the turn of the millennium, some firms have reverted to a simpler strategic structure driven by advances in

information technology. !t is felt that knowledge managementsystems should be used to share information and

create common goals. %trategic divisions are thought to hamper this process. &his notion of strategy has been

captured under the rubric of dynamic strategy, popularized by 7arpenter and %anders"s textbook [1.&his work

builds on that of rown and ?isenhart as well as 7hristensen and portrays firm strategy, both business and

corporate, as necessarily embracing ongoing strategic change, and the seamless integration of strategy

formulation and implementation. %uch change and implementation are usually built into the strategy through the

staging and pacing facets.

"istorical development of strategic management

!irth of strategic management
http://en.wikipedia.org/wiki/Michael_Porterhttp://en.wikipedia.org/wiki/Michael_Porterhttp://en.wikipedia.org/wiki/Cost_leadershiphttp://en.wikipedia.org/wiki/Differentiation_(economics)http://en.wikipedia.org/wiki/Focushttp://en.wikipedia.org/wiki/Focushttp://en.wikipedia.org/wiki/Blue_Ocean_Strategyhttp://en.wikipedia.org/wiki/Marketing_strategieshttp://en.wikipedia.org/wiki/Marketing_strategieshttp://en.wikipedia.org/wiki/Reengineeringhttp://en.wikipedia.org/wiki/Reengineeringhttp://en.wikipedia.org/wiki/Technology_strategyhttp://en.wikipedia.org/wiki/Peter_Druckerhttp://en.wikipedia.org/wiki/Management_by_objectiveshttp://en.wikipedia.org/wiki/Knowledge_managementhttp://www.prenhall.com/carpenter/http://www.prenhall.com/carpenter/http://en.wikipedia.org/wiki/Michael_Porterhttp://en.wikipedia.org/wiki/Cost_leadershiphttp://en.wikipedia.org/wiki/Differentiation_(economics)http://en.wikipedia.org/wiki/Focushttp://en.wikipedia.org/wiki/Blue_Ocean_Strategyhttp://en.wikipedia.org/wiki/Marketing_strategieshttp://en.wikipedia.org/wiki/Reengineeringhttp://en.wikipedia.org/wiki/Technology_strategyhttp://en.wikipedia.org/wiki/Peter_Druckerhttp://en.wikipedia.org/wiki/Management_by_objectiveshttp://en.wikipedia.org/wiki/Knowledge_managementhttp://www.prenhall.com/carpenter/


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%trategic management as a discipline originated in the 1FG+s and H+s. #lthough there were numerous early

contributors to the literature, the most influential pioneers were #lfred /. 7handler, 5hilip %elznick, !gor #nsoff,

and 5eter /rucker.

#lfred 7handlerrecognized the importance of coordinating the various aspects of management under one all6

encompassing strategy. 5rior to this time the various functions of management were separate with little overall

coordination or strategy. !nteractions between functions or between departments were typically handled by a

boundary position, that is, there were one or two managers that relayed information back and forth between two

departments. 7handler also stressed the importance of taking a long term perspective when looking to the future.

!n his 1FH* ground6breaking work Strategy and Structure, 7handler showed that a long6term coordinated strategy

was necessary to give a company structure, direction, and focus. Ie says it concisely, 0structure follows

strategy.3[J

!n 1FG, 5hilip %elznick introduced the idea of matching the organization"s internal factors with external

environmental circumstances. &his core idea was developed into what we now call %9'& analysisby Kearned,

#ndrews, and others at the Iarvard usiness %chool >eneral 8anagement >roup. %trengths and weaknesses of

the firm are assessed in light of the opportunities and threats from the business environment.

!gor #nsoffbuilt on 7handler"s work by adding a range of strategic concepts and inventing a whole new

vocabulary. Ie developed a strategy grid that compared market penetration strategies, product development

strategies, market development strategies and horizontalandvertical integrationand diversification strategies. Ie

felt that management could use these strategies to systematically prepare for future opportunities and challenges.

!n his 1FHG classic 7orporate %trategy, he developed the gap analysis still used today in which we must

understand the gap between where we are currently and where we would like to be, then develop what he called

0gap reducing actions3

5eter /ruckerwas a prolific strategy theorist, author of dozens of management books, with a career spanning five

decades. Iis contributions to strategic management were many but two are most important.


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o Lo tracking of progress against plan

o Lo conse2uences for above


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because strategies are built on assumptions which, in the absence of perfect knowledge, will never be perfectly

correct. %trategic management is necessarily a (repetitive learning cycle [rather than a linear progression towards

a clearly defined final destination.([FJ9hile assumptions can and should be tested in advance, the ultimate test is

implementation. Oou will inevitably need to adjust corporate objectives andAor your approach to pursuing

outcomes andAor assumptions about re2uired resources. &hus a strategy will get remade during implementation

because (humans rarely can proceed satisfactorily except by learning from experience and modest probes,

serially modified on the basis of feedback, usually are the best method for such learning.( [FG

!t serves little purpose )other than to provide a false aura of certainty sometimes demanded by corporate

strategists and planners- to pretend to anticipate every possible conse2uence of a corporate decision, every

possible constraining or enabling factor, and every possible point of view. #t the end of the day, what matters for

the purposes of strategic management is having a clear view M based on the best available evidence and on

defensible assumptions M of what it seems possible to accomplish within the constraints of a given set of

circumstances. #s the situation changes, some opportunities for pursuing objectives will disappear and others

arise. %ome implementation approaches will become impossible, while others, previously impossible or

unimagined, will become viable.

&he essence of being 0strategic3 thus lies in a capacity for (intelligent trial6and error( rather than linear adherenceto finally honed and detailed strategic plans. %trategic management will add little value=indeed, it may well do

harm=if organizational strategies are designed to be used as a detailed blueprints for managers. %trategy should

be seen, rather, as laying out the general path 6 but not the precise steps 6 by which an organization intends to

create value. %trategic management is a 2uestion of interpreting, and continuously reinterpreting, the possibilities

presented by shifting circumstances for advancing an organization"s objectives. /oing so re2uires strategists to

thinksimultaneouslyabout desired objectives, the best approach for achieving them, and the resources implied by

the chosen approach. !t re2uires a frame of mind that admits of no boundary between means and ends.

!t may not be as limiting as suggested in (&he linearity trap( above. %trategic thinkingA identification takes place

within the gambit of organizational capacity and !ndustry dynamics. &he two common approaches to strategic

analysis are value analysis and %9'& analysis. Oes %trategic analysis takes place within the constraints of

existingApotential organizational resources but it would not be appropriate to call it a trap.


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&he terms QobjectivesE and QgoalsE are sometimes differentiated by analysts on the basis of generality and

specificity of what an organisation seeks to achieve, to become, and to attain. #ccording to one viewpoint,

objectives are desired future positions or destinations stated in broad timeless statements, e.g., 0to ensure

consistently increasing earnings per share and to attain a satisfactory return on shareholdersE e2uity3 goals are

specific, time6based paints of measurement that the organisation wants to meet in pursuit of its objectives. >oals,

according to this view, are to be stated specifically and as 2uantitatively as possible while objectives may be

stated in 2uantitative or 2ualitative terms. &he emphasis in goals is on measurement of progress towards the

achievement of objectives.


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"o$ goals are set)*

!n practice, goals are set by way of a complicated power6play involving various individuals

and groups within and without the organisation and by reference to values which govern

behaviour in general and the specific behaviour of the relevant individuals and groups. >oal setting, in other

words, involves a process of reconciliation of diverse needs of interest groups coalitions of interests or

stakeholders in the organisation including the owners )shareholders-, employees, suppliers, customers,

>overnment and others. &he respective stakeholders often have conflicting objectives which management as the

strongest coalition of interests has to resolve. &he process of reconciliation is a continuous one, for, conflicting

group interests cannot be resolved once and for all. &he acceptable set of objectives which managements arrive at

is the result of bargaining between the various groups at a certain point of time. ut then revisions take place and

incremental changes are made the current set of objectives is derived by management so as to satisfy as far as

possible the 7urrent demands of the interest groups in the light of the existing environment and aspirations of the

management about what the objectives ought to be.

O(F&IT+eaning of onflict

&he term conflict has wide connotations. 9e often hear people saying, 0&here is conflict in his mind3, implying

thereby that an individual is in a state of dilemma and is seriously engaged in weighing the pros and cons of

possible behaviours but so far, has been unable to take a decision. !t denotes his psychological state of mind

within or without the organisation. 5eople also say, 0&hey have conflicting views3. &hat is, there exists a

difference of opinion between the two persons or groups. !t may be colleagues, superior6subordinates,

departments or labour and management. Lo less fre2uent is the phenomenon when two or more parties are

engaged in slowdowns and showdowns, each party developing

strategies to meet the challenge of the other and get polarised into warring factions. 9e

say, 0&hey are in conflict3. !n fact, this is nothing but an advanced stage of an earlier situation, 0&hey have

conflicting views3. !n any case, the party concerned is faced with the

problem of decision making. Ience, as 8arch and %imon suggest, we use the term 0conflict3 in the sense of a

breakdown in the standard mechanisms of decision6making.


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onflict as a %o$erful %rocess

9henever people talk of conflict or say that conflict has developed, implication is that there is something

frightening. &his notion prevails despite the fact that people know there is no

organisation which is altogether free from conflicts. ?ven non6profit and service organisations such as

educational institutions and hospitals having missionary zeal are not devoid of conflicts. !ts inevitability is

recognised by an individual only when he himself is faced with a conflict situation. !n all other cases, he refers to

it as bad and avoidable and regards it as failure of the party in conflict. &he traditionalists or classicists had based

their thinking on this common notion. &hey contemplated an organisation structure that would not permit the

appearance of conflict. &his could be achieved, according to them, through a detailed elaboration and

specification of authority, responsibility, accountability, policies, procedures, rules, etc. leaving no chance for

conflicts to develop. !f for any reason conflict still develops, it should be immediately eliminated. !ts source

should be rooted out and the evil should be nipped in the bud. &he neo6classicists emphasised the understanding

of individual psychology, informal groups, development of informal leadership, a democratic6participative

leadership style, etc. so as to avoid conflicts and establish industrial harmony. #ccording to them, the

characteristics of modern organisations are such that they militate against the goals of the individual and cause

dissatisfaction. !ndividuals are not mere ineit appendages to the machine and through the formation of informal

groups attempt to make up for the deficiencies of formal organisation. Ience, through power6e2ualisationtechni2ues, they have to be provided satisfaction on the job.

The %rocess of onflict

!n general, when conflict develops, it does not become an open conflict from the beginning. !nitially, it rests in a

difference of opinion. 9hen a particular point of view is not accepted by the part to which it has been offered as

an idea, the party offering it may not like it. &he rejection of the idea when offered again may be viewed with

scorn. Low the party offering the idea may nurse a grievance against the other party. ut if there is repeated

failure, it may cause frustration. !f the frustrated party is in a position to challenge, it may adopt a tough posture.

&hus, if not checked immediately, it may gradually get transformed into an open conflict. &he perceptions maybecome rigid and goals may get fixed. &hus, the evolution of conflict takes place slowly and passes through

certain identifiable processes.

1. Katent conflict 6 when conflict6promoting conditions tend to appear. &his may also be called as phase of

anticipation of conflict.

*. 5erceived conflict 6 when people perceive that conflictual conditions exist. !t may be

called as a phase of conscious but unexpressed differences. #t times, perceptions may

be mistaken in the event of lack of effective communication or real conflict may be

denied through defensive behaviours.

N.


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problem may arise because the facts at the disposal of the two parties differ, their goals may differ, and difference

may exist regarding methods to be used for doing a particular task or their views about what is good, bad, right or

wrong differ. &his classification may not compress all kinds of issues, but they are indicating of what generally

the problems are about. &he person who is entrusted with the responsibility of handling conflict must find out

what the conflict is about. !t is obvious that the next thing to know is why these differences between the two

parties have risen. &he underlying factors which might have prompted these differences to crop up may be

informational, perceptual, role factors and the like. #t times, the information available to the two parties is

different and therefore, they draw different conclusions. 5eople also have diverse backgrounds. &heir beliefs,attitudes, values and cultural norms differ. ecause of these background differences, the perceptions of the two

parties may differ. #n individual could also play a number of roles in different groups as he is a member in

several groups at the same time. &he roles of the same individual in different groups may clash with the role of

another individual. # superior may see the urgency of a particular job, whereas his subordinate may not do so. #

conflict may develop between the two. 'nce the problem is identified and what has caused the problem becomes

known, the stage which it has already reached can be properly understood. &he next and very important step is to

develop a strategy to deal with the situation.

I+%&'+'(TATIO( OF STRAT'G-

'nce a superior has made an assessment of the situation and is able to select a suitable conflict

handling mode, he may find that in some cases, such as absence of information at the disposal

of a particular individual, not much action is re2uired on his part. Ie is simply to furnish that

information. ut if this information is re2uired by that particular individual on a continuous

basis, the superior may have to develop some system. &hus, depending upon the situation, a

superior is faced with, he has to choose his strategy, the implementation of which may involve, according to Catz,

one or more of the three following steps4

./ +arking the system $ork 6 &he system is kept basically intact, but only some of theelements in it are modified to make the current arrangements more workable.

0/ ,eveloping additional machinery 6 #nother alternative to modifying some of the elements in the system is to

alter the system by adding or replacing elements.

1/ hanging institutional structure to eliminate the cause of the conflict 2 If even modifying the system is not

sufficient to reduce conflict, a major change may be re2uired in

the organisation.

ORGA(ISATIO(A& 3&T3R'

'rganisational 7ulture refers to a system of shared meaning held by members that distinguishes the organisationfrom other organisations. &his system of shared meaning is, in closer examination, a set of key characteristics that

the organisation values. &here are seven primary characteristics that, in aggregate, capture the essence of an

organisationEs culture.

./ Innovation and risk taking/ &he degree to which employees are encouraged to be innovative and take risks.

0/ Attention to detail/ &he degree to which employees are expected to exhibit precision,

analysis, and attention to detail. 1/ Outcome orientation/ &he degree to which management focuses on results or

outcomes rather than on the techni2ues and processes used to achieve these outcomes.

4/ %eople orientation/ &he degree to which management decisions take into consideration the effect of outcomes

on people within the organisation.


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5/ Team orientation/ &he degree to which work activities are organised around teams

rather than individuals.

6/ Aggressiveness/ &he degree to which people are aggressive and competitive rather

than easy6going.

7/ Stability/ &he degree to which organisational activities emphasizes maintaining the

status 2uo in contrast to growth. ?ach of these characteristics exists on a continuum from low to high. #ppraising

the organisation on these seven characteristics, then, gives a composite picture of the organisationEs culture. &hispicture becomes the basis for feelings of shared understanding that members have about the organisation, how

things are done in it, and the way members are supposed to behave.

Strong vs/ 8eak ultures

!t has become increasingly popular to differentiate between strong and weak cultures. &he argument here is that

strong culture have a greater impact on employeeEs behaviour and are more directly related to reduced turnover.

!n a strong culture, the organisationEs core values are both intensely held and widely shared. &he more members

who accept the core values and the greater their commitment to those values is, the stronger the culture is.

7onsistent with this definition, a strong culture will havea great influence on the behaviour of its members because the higher degree of shrewdness

and intensity creates an internal climate of high behavioural control. 'ne specific result of a

strong culture should be lower employee turnover. # strong culture demonstrates high agreement among

members about what the organisation stands for. %uch unanimity of purpose builds cohesiveness, loyalty and

organisational commitment. &hese 2ualities, in turn, lessen employeesE propensity to leave the organisation.

ulture9s Functions

7ulture performs a number of functions within an organisation.


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of these goals and so its activities are legitimate.


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remember that a whole organisation does not have to interact with another whole organisation. /ifferent parts or

groups or subsystem within the organisation interact with their relevant external environments outside the

organisation.


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do keep a watch on happenings inside the organisation. &hey are in a position to determine the occasion for a goal

decision, to participate in analysing the existing situation, to consider alternative and discuss the conse2uences

thereof. 7ooperation, thus makes still further inroads on the process of deciding goals. esides, these members

bring to bear the benefit of their knowledge to the organisation they represent. Lot only do they thereby protect

the interests of organisations they represent, but also help in avoiding decisions with undesirable conse2uences.

&his helps integrate the diverse.

4/ oalition/!t is a combination of two or more organisations who, without losing their respective identities,

work for a common purpose. >enerally it arises when it is difficult for any individual organisation to undertake a

venture, say, the construction of a dam, so that it seeks the support of another6organisation and joins hands with

it. &hus, more than one party come together, decide terms and conditions of agreement and form a coalition. #

coalition works on the basis of a minimum common programme. 9hen differences develop between members of

a coalition, even on a minimum common programme there is a threat to the existence of the coalition. 9hen

members of a coalition pull in different directions, the coalition is likely to break down. ut because there is

mutual interdependence, the fear of breakdown keeps the coalition together unless cleavages become serious. overnment. &herefore, many parties having widely differing political philosophies joinedhands and formed a >overnment on the basis of a common programme. ut soon after the formation of the

>overnment, different parties started pursuing their own philosophies and the coalition governments failed. &hus,

coalition appears to be an extreme form of the environmental conditioning of organisational goals. #s the support

of other organisations is imperative, it avoids investment of resources in fruitless ventures if an organisation is

unable to find partners. esides, a coalition re2uires a commitment for joint decision of future activities and thus,

places limits on unilateral or arbitrary decisions. ecause of interdependency, no one part can set objectives or

take decisions without consulting others.

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strategies/html

5/ http);;searchcio/techtarget/com;definition;organizational*goals
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