Term Paper

Course title: Principles of Management

Course code: ALD-1105
Topic: The Importance of the Strategic
Management Process in the Knowledge-
Based Economy.

Submitted to:
Lecturer Sanjana Hossain

Submitted by:
Md Sheikh Shohan
Roll: 16221063
BBA (Finance & Banking)
Section: A

Date of Submission:
10 April, 2016

Bangladesh University of Professionals

 Letter of transmittal

11 April 2016

To

Lecturer Sanjana Hossain

Bangladesh University of Professionals

Mirpur Cantonment, Mirpur Dhaka

Subject: Submission of Term Paper

Mam,

I would like to draw your kind attention to the fact that I have been assigned to do a term paper
on Principles of Management. My topic was ‘Organization Management’. I have researched on
the topic and have gathered a lot of information. I have prepared the term paper using all these
information and have tried my best to make it acceptable.

I, therefore, pray and hope that you would be kind enough to assess my term paper and oblige
thereby.

Yours sincerely,

Md Sheikh Shohan

Roll: 16221063

BBA (Finance & Banking)

Section: A
 Acknowledgment

First and foremost I would like to express my gratitude to the Almighty for whose kindness I will
be able to complete the 1st semester of BBA program in Finance & Banking.

The paper on “The Importance of the Strategic Management Process in the Knowledge-Based
Economy” was given to me as a part of the curriculum this semester.

I have tried my best to present the information as detailed as possible using basic terms that I
hope will be comprehended by the widest spectrum of researchers.

I have completed this term paper under the advice of Ms. Sanjana Hossain, Lecturer,
Bangladesh University of Professionals and for that I will be grateful to her. I am gratitude for
her huge support. Without her guidance it would not be possible for me to complete the task
properly.

I will be forever indebted to my family and friends for their immense support and help.
 ExeCutive Summary

The main focus of the term paper is to show the strategic management process and how
important this is in knowledge based Economy.

In the cutting edge economy, intensity implies data and ability as opposed to capital and
physical resources. Consequently, the key procedure for any focused association is to
deliberately utilize their data assets and information resources by recollecting and applying
background.

An association's capacity to contend on the business sector is progressively seen as relying

upon the aptitudes and information of its chiefs what's more, workers, viewed as intellectual
capital, and put to great use while defining, executing and altering techniques. In the present
business environment, learning develops quickly and the valuable life range of the authoritative
aptitudes is diminishing, which implies the survival and intensity of an association is connected
to its capacity to learn and incorporate its discoveries in their key administration process.
 Table of Content

SI no. Particulars Page no.

1 Conceptual
2 Defining the Business
3 Establishing strategic objectives
4 Formulating the strategy
5 Strategy implemented and Execution
6 Process of strategic management
7 Importance of strategic management in knowledge based Economy

Conceptual
In their mission for financial achievement, supervisors have constantly seen that for some
reason, a few organizations appear to prosper evidently easy, while others, regardless of their
consistent battle, run over only misfortune. The explanation behind this distinction has been for
quite some time concentrated on, so as to comprehend which are the most imperative
administrative activities that different champs from failures. The aftereffects of these studies
can be compressed as takes after:

1. In effective associations, chiefs have a reasonable vision of the reason furthermore, heading
of the organization and don't falter to approach new bearings or to start significant changes.
The directors of unsuccessful organizations, then again, are so distracted with current issues
also, subtle elements that basically disregard to recognize any reason and heading.

2. The effective directors are the individuals who know everything about the customers' needs
and conduct, the business sector prerequisites and the opportunities gave by nature. They
regularly get their best Audit of Universal Near Administration Volume 10, Issue 1, Walk 2009
95 Unique n the present day economy, intensity implies data and ability as opposed to capital
and physical resources. Along these lines, the key procedure for any focused association is to
deliberately utilize their data assets and information resources by recollecting and applying
background. An association's capacity to contend on the business sector is progressively seen as
relying upon the aptitudes and information of its directors also, workers, viewed as intellectual
capital, and put to great use while figuring, actualizing and changing procedures. In the present
business environment, information advances quickly and the helpful life range of the
authoritative abilities is diminishing, which implies the survival and aggressiveness of an
association is connected to its capacity to learn and incorporate its discoveries in their vital
administration process. Thoughts from their customers, and their creative vision depends on
experience. These supervisors ceaselessly look for new open doors, continually following up on
those they discover all the more engaging. Different supervisors don't generally consider their
customers' needs or the business sector opportunities. They are less open to the customers'
states of mind, their nature instructing them to respond to the business sector's general course
of making it. They can likewise dismiss new thoughts out of trepidation of making a botch,
while their activities and choices are typically those as of now „tried and demonstrated fruitful".

3. The administrators of effective associations must have a vital arrangement in request to

protect a solid focused position available and along these lines accomplish the fancied result.
They trust that the upper hand is the key for acquiring a high income and a long haul
achievement. Less gainful associations are dependably those that do not have a decent system.
Their directors, engrossed with inward issues and printed material due dates, make a less than
impressive display with regards to of moving their associations into ideal aggressive positions;
they don't create viable approaches to contend all the more effectively. They frequently belittle
the strength of contenders and overestimate the capacity of their own associations to balance
the upper hand of the market pioneers.

4. High-performing associations are firmly comes about situated and execution cognizant. Their
administrators consider the person execution of each employee as the engine of authoritative
aggressiveness, and they decently remunerate extraordinary results. The directors of
ineffectively performing associations pardon feeble execution on the premise of wild
components, for example, a discouraged economy, slack interest, solid focused weights,
increasing expenses and unanticipated issues. For their situation, prizes are just freely fixing to
principles of prevalent execution.

5. In best performing organizations, supervisors are profoundly included in actualizing the

picked procedure and making it fill in as arranged. They comprehend the inside necessities for
fruitful system usage and they demand that watchful consideration be paid to the points of
interest required for top notch execution of the picked procedure. They by and by lead the
procedure of system usage and execution. Conversely, the directors of inadequately performing
associations are into the ruses of corporate administration; the greater part of their time is
brought up with studies, reports, gatherings, arrangement making, updates and managerial
method. They don't see efficient usage of key arrangements as their prime managerial
obligation. They spend a large portion of the workday in their workplaces, remaining to a great
extent undetectable to their representatives, utilizing quick subordinates as a course to the rest
of the association, and keeping tight control over generally choices.

These contrastant methodologies are entirely educational from the administrative perspective.
The chiefs of fruitful associations are activity situated vital scholars who make a propensity for
watching out for client needs, new opportunities and focused situating while controlling inward
operations. They know about their obligation to shape their association's long haul heading,
detail an intelligible vital activity arrange for that will deliver focused advantage and long haul
money related achievement, and organize fruitful usage of the picked methodology. These
chiefs are great strategists and business visionaries and additionally great inside pioneers.
Hence, we can presume that vital administration is the key element in accomplishing
hierarchical execution. It is generally viewed as that vital administration has five basic parts:

1. Characterizing the association's business and building up a key mission as a premise for
building up what the association does or doesn't do and where it's going.

2. Building up key destinations and execution targets.

3. Figuring a technique to accomplish the vital goals and focused on results.

4. Actualizing and executing the picked key arrangement.

5. Assessing key execution and making remedial conformities in procedure and/or how it is
being actualized in light of genuine experience, changing conditions and new thoughts and
opportunities.

Defining the Business

Defining the business as it currently is and as it will be in the future is a necessary first step in
establishing a meaningful direction and developmental path for the organization. Management’s
view of what the organization seeks to do and to become over the long-term is the organization’s
strategic mission. The strategic mission broadly charts the future course of the organization.
Since decisions about long-term direction fall squarely upon the shoulders of senior officers, the
strategic mission nearly always reflects the personal vision and thinking of top-level managers.

Establishing strategic objectives

Particular execution targets are required in all ranges influencing the survival furthermore,
achievement of an organization, and they are required at all levels of administration, from the
corporate level on down profound into the association's structure. The demonstration of
setting up formal goals not just changes over the bearing an association is headed into
particular execution focuses to be accomplished additionally makes preparations for float,
erratic movement, perplexity over what to perform and loss of reason. Both short-run and long-
run goals are required. The key goals for the association all in all ought to at the very least
determine: the business sector position Survey of Worldwide Relative Administration Volume
10, Issue 1, Walk 2009 97 also, aggressive standing the association plans to accomplish, yearly
productivity targets, key monetary and working results to be accomplished through the
association's picked exercises, and some other development by which key achievement is
measured. Since execution destinations are required here and there the association, the goal
setting undertaking of key administration includes all administrators; each must distinguish
what their zone's commitment to key achievement will be and after that set up concrete,
quantifiable execution targets.

Formulating the strategy

The General Electric meaning of procedure is "an announcement of how what assets will be
utilized to exploit which chances to minimize which dangers to create a coveted result". This
definition indicates the issues that procedure must address:

1. The most effective method to react to changing conditions particularly, what to do about
moving client needs and rising industry patterns, which new chances to seek after, how to
shield against focused weights and other remotely forced dangers, and how to fortify the blend
of the company's exercises by accomplishing a greater amount of a few things and less of
others.

2. Step by step instructions to assign assets over the association's different specialty units,
divisions, and utilitarian offices settling on choices that direct capital speculation and HR in
behind the picked vital arrangement is dependably basic; some sort of methodology strong
rules for asset assignment need to exist.

3. Step by step instructions to contend in every one of the commercial ventures in which the
association partakes choices about how to create client bid, to position the firm against
opponents, to stress a few items and de-underscore others, and to meet particular focused
dangers are constantly vital to aggressive survival and the accomplishment of a defendable
upper hand.

4. Inside of every line of business of the association, what activities and ways to deal with take
in each of the major practical territories and working divisions to make a bound together and all
the more effective key exertion all through the specialty unit.

\
Strategy implementation and execution
Putting the strategy into place and getting individuals and organizational subunits to go all out in
executing their part of the strategic plan successfully is essentially an administrative task. This
implies several managerial challenges, such as:
· Building an organization capable of carrying out the strategic plan;
· Developing strategy-supportive budgets and programs;
· Linking the motivation and reward structure directly to achieving the targeted results;
· Creating an organizational culture that is in tune with strategy in every success-causing respect;
· Developing an information and reporting system to track and control the progress of strategy
implementation;
· Installing policies and procedures that facilitate strategy implementation.

The administrative tasks of implementing and executing the strategy involve a process of moving
incrementally and deliberately to create a variety of “fits” that bring an organization’s conduct of
its internal operations into good alignment with strategy. A number ot fits are thus needed:
· Between strategy and the internal organizational structure;
· Between strategy and organizational skills/technical know-how /operating capabilities;
· Between strategy and the allocation of budgets and staff size;
· Between strategy and the organization’s systems of reward and
incentives;
· Between strategy and internal policies, practices and procedures;
· Between strategy and the internal organizational atmosphere (as determined by the values and
beliefs shared by managers and employees, the philosophies and decision-making styles of top
managers, and other factors that make up the organization’s personality and culture.

The process of strategic management

Because each component of strategic management entails judging whether to continue with
things as they are or to make changes, the task of managing strategy is a dynamic process – all
strategic decisions are subject to future modification. Changes in the organization's situation and
ups and downs in financial performance are constant drivers of strategic adjustments. A model of
the strategic management process is shown in Figure 1. The first three components, in
combination, give direction to the enterprise, establish the directional map for strategic action,
and, in effect, define what is called an organization's strategic plan. The fourth component is
easily the most complicated and challenging one because it involves not only deciding on but
also undertaking the administrative actions needed to convert the strategic plan into results;
indeed, orchestrating the execution of strategy is probably 5 to 10 times more time consuming
than is formulating the strategic plan. The fifth component, evaluating strategic performance and
making corrective adjustments, is both the end and the beginning of the strategic management
cycle. The march of external and internal events guarantees that the time will come for making
revisions in the four previous components. Most of the time, revisions will be of the fine-tuning
variety, but occasions for major overhaul in one or more components arise – sometimes because
of significant external developments and sometimes because of sharply sliding financial
performance.

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Defining the Setting Formulating Implementing Evaluating

business and strategic a strategy to and executing performance and
establishing objectives and achieve the the strategic reformulating the
a strategic performance target plan strategic plan
mission targets objectives and/or its
implementation

The importance of the strategic management process in the knowledge-based

economy
Each association has both a system and an inner activity motivation for executing it, however
cognizant or very much considered or defective they might be. Now and then key arrangements
are straightforwardly expressed by administration, and in some cases they stay certain in
administration choices and the association's examples of operation. Once in a while approaches
are picked after thorough investigation, and once in a while vital choices rise indiscriminately
from chance events and chronicled mischances occasioned by the encounters and identities of
past pioneers, the position of the organization in the business, and the monetary circumstances
encompassing its improvement. Then again, in maybe the most regular case, an undertaking's
menu of vital activities and methodologies is the result of numerous inner investigations and
audits, years of business sector input in regards to what worked Survey of Global Near
Administration Volume 10, Issue 1, Walk 2009 103also, what didn't, earlier vital moves and
choices, evaluations about what the future will bring, and a strong measurement of experience
and judgment, as such all the information picked up in time by an association. The benefits of
top notch vital deduction and a profound responsibility to the key administration process
incorporate the direction it gives to the whole administration chain of importance in clarifying
exactly what it is the organization is attempting to do what's more, to accomplish; the
commitment it makes to perceiving and reacting to showcase changes, new open doors, and
undermining improvements; the method of reasoning it gives for administration in assessing
contending demands for venture capital and new staff; the coordination it adds to all the system
related basic leadership done by directors over the association; and the proactive rather than
responsive stance that it provides for the association. As officially expressed, high-performing
organizations utilize their information and worldwide aptitude to intentionally attempt to affect
their objective markets with an effective procedure; they attempt to start and lead, not simply
respond and shield. In their perspective, the genuine reason and estimation of methodology is to
think of an activity arrangement that will effectively draw in purchasers, create a manageable
upper hand, help the association's business sector stature, put included aggressive weight
adversaries, and push execution to predominant levels.

References

1. Abell, A. Oxbrow, N. – Competing with knowledge, Library Association

Publishing, London, 2002
2. Barney, J.B. and Hesterly, W.S. (2006): Strategic Management and
Competitive Advantage: Concepts and Cases, Pearson Prentice Hall
3. Boisot, M. – Knowledge Assets: Securing Competitive Advantage in the
Information Economy, Oxford University Press, 1998
4. Eisenhardt, K. M.; Martin, J. A., "Dynamic Capabilities: What Are They?",
Strategic Management Journal, 2000
5. Gemünden, H. and Heydebreck, P., “The Influence of Business Strategies on
technological Network Activities,” in Research Policy, Vol. 24, 1995