STRATEGIC MANAGEMENT

Dr. A S SATHISHKUMAR
AP / MBA
“One method never suit for all”

- Vivekandha
“If you don’t have a strategy you will be . . .
part of somebody else’s strategy.”
- Alvin Toffler
DEFINITION
Strategy can be defined as an intention for a set of
actions to achieve a set of objectives in the future.

"Strategy is the direction and scope of an organization

over the long-term: which achieves advantage for the
organization through its configuration of resources
within a challenging environment, to meet the needs of
markets and to fulfil stakeholder expectations".
DEFINITION

Strategic Management is the art and science of

formulating, implementing and evaluating cross-
functional decisions that will enable an organization
to relate itself with environment to achieve its
objectives.
STEPS INVOLVED IN STRATEGIC MANAGEMENT

 The systematic identification of specifying the firm's

objectives, nurturing policies and strategies to achieve these
objectives.

 Acquiring and making available of various resources to

implement the policies and strategies to achieve the firm's
objectives
 Where does strategy come from?
The creation of strategy is an interactive process that involves
not only the Top Management Team but also feedback from
frontline managers, and customers / stakeholders ( who depend
on that particular firms)
TMT

Frontline
Customer
Managers
 Hierarchy of organizational plans
→ Mission and Purpose
→ Objectives
→ Strategies
→ Policies
→ Procedures and Rules
→ Programmes and Projects
→ Budgets
→ Quotas and Targets
 Functions
• Linkage between current and future environment
• Proactive step for future’s uncertainty
• Alignment of available resources based on current and
future environment.
• Hold up healthy competition
• Success and survival
• Sustainable competitive advantage for profit earning
 Drivers of Strategy
∞ Leadership
∞ Organizational policies & Procedures
∞ Org. Structure / Functional areas
∞ Org. Culture
∞ Working environment
∞ Resource availability
∞ Capacity to deliver
∞ Competition in market
∞ Demand / Customer needs & wants
Strategic Management Process
Levels of Strategic Management
Strategic Intent Hierarchy
VISION
Vision Statement answers the question, What do we want to
become? It is futuristic and long term.

MISSION

Mission is the reason for which the organization exists & what it
will do?
• It describes the products/services to be supplied,
• the markets to be served and
• the technology to be applied, if critical.
Vision KNOWLEDGE BUSINESS SCHOOL @ KIOT
To produce global leaders to manage enterprise in a challenging and highly
competitive world through incorporation of domain expertise coupled with
high ethical standards.

Mission
 Developing analytical, problem solving and decision-making skills for
managing change.
 Nurturing leadership traits through continuous industry interaction and
industry sponsored centers of excellence.
 Providing best management education through domestic and
international collaborations leading to better cross cultural skills.
 Facilitation by faculty who are thought leaders by their indulgence in

intensive research and industrial consultancy.

 Mission Statement Vision Statement

Mission statement talks about HOW A Vision statement outlines where

you will get to where you want to be. you want to be. Communicates both
Defines the purpose and primary the purpose and values of your
objectives. business

A mission statement talks about the A vision statement talks about your
present leading to its future. future.

Your mission statement may change , Your vision should remain intact, even
but it should still tie back to your core if the market changes dramatically,
values and vision. because it speaks to what you
represent, not just what you do.
Strategic Management Process
Process Managerial activities
• Vision, Mission and
- Policies, Values and
goals
Strategy
• Scan the environment
- Programme / Projects,
• Strategy Formulation
Budget, Procedure
• Strategy implementation
- Performance measures
• Strategy Evaluation and
control
“The essence of strategy lies in creating
tomorrow’s competitive advantage faster than
competitors mimic the ones you possess today.”

- Gary Hamel & C. K. Prahalad

 “Conscience is the inner voice that warns us
somebody may be looking.” - H. L. Mencker

“A company’s ethical conduct is something

like a big flywheel. It might have a lot of
momentum, but it will eventually slow down
and stop unless you add energy.” -

William Adams
 Corporate Governance
Corporate governance refers to the system by which
corporations are directed and controlled.

The governance structure specifies the distribution of rights and

responsibilities among different participants (Stakeholders) in
the corporation and specifies the rules and procedures for
making decisions in corporate affairs.
 Key aspects of Corporate
governance
• According to NFCG,
- Transparency of corporate structures and operations.
- The accountability of managers and the boards to
shareholders.
- Corporate responsibility towards employees, creditors,
suppliers and local communities, where the corporation
operates
 Responsibility of the board

• Setting Corporate strategy, Overall direction, Mission and

Vision

• Hiring and firing the CEO and Top management

• Controlling, monitoring top management activity

• Reviewing and approving the use of resources.

• Caring the shareholders interests.

 Responsibility of corporate
• Friedman’s Traditional view of business
• Carroll’s Four responsibilities of business
- Economic, Legal, Ethical and Discretionary
• Ethics and Strategy
- Self dealing, Anti competitive behavior,
- Opportunistic exploitation, Substandard working
condition, Environmental degradation
 Strategic Decision Making

Strategic decision making, or strategic planning, is

an ongoing process that involves creating strategies
(Course of actions) to achieve goals and altering
strategies based on observed outcomes.
 Strategy Decision Making
• Mintzberg’s modes of Strategic decision making

 Entrepreneurial mode

 Adaptive mode

 Planning mode

 Logical Incrementalism
Strategic Decision Making process
 Evaluate current performance result

 Review mission, goals and corporate governance

 Scan and asses the internal and external environment

 Analyze strategic factors

 Generate, Evaluate and select the best alternative strategy

 Implement selected strategies

 Evaluate implemented strategies

 Strategic Planning in Practice
• It is important to plan for the future competitive environment

• Scenario Planning

• Decentralized Planning

• Strategic Intent

 deals with vision, mission, business definition, business

model and objectives

 Building new resources and capabilities to create and exploit

future opportunities
 Strategic Leadership
• Strategic Leadership is a ability to lead organization in
efficient and effective way towards the achievement of
objectives.

• Leadership skills are important for successful strategic managers

• A managers key strategic role is to use knowledge, energy, and

enthusiasm to provide strategic leadership for subordinates
 Characteristics of Good Strategic
Leaders
→ Vision, Eloquence, and Consistency

→ Commitment

→ Being Well Informed

→ Willingness to Delegate and Empower

→ The Astute Use of Power

→ Emotional Intelligence
Strategic Decision Making - Pitfalls
→ Unpredictability of the real world
→ Communication
→ Commitment
→ Inflexibility of plans and planning
→ Control
→ Objectivity
→ Politics
→ Cognitive Bias
“Strategy is a choice on how to
compete.”
- Michael Porter
 What Is Corporate Social
Responsibility (CSR)?
• Corporate social responsibility (CSR) is a self-regulating
business model that helps a company be socially
accountable to itself, its stakeholders, and the public.

• CSR also called Corporate Citizenship, companies can

be conscious of the kind of impact they are having on all
aspects of society, including economic, social, and
environmental.